INCOME TAX ACT, 1961

Section 2(47) Section 2(42A)

Capital gains - Transfer - Long-term or short-term - Sale agreement

Assessee acquired certain property from Building Society under a lease-cum-sale agreement dated 22-3-2001. As per terms of said agreement, assessee was to construct building on the site within two years from the date of agreement. The society by way of registered sale deed dated 31-8-2014 conveyed the property to assessee. Assessee sold the site as well as building constructed thereon under a sale deed dated 3-12-2014 and claimed that profit arising on transfer was long-term capital gain. AO considered date on which society made an absolute conveyance to assessee, i.e., 31-8-2014 as the date of acquisition of property by the assessee and accordingly, construed the capital gain on sale of property as short-term capital gain.Held: It was not in dispute that assessee had paid cost of site as early as 22-3-2001 and was in possession of property as lessee-cum-agreement holder with right to obtain conveyance of absolute interest over the land that was leased, therefore, claim of the assessee that it held property from 22-3-2001 had to be accepted and accordingly, capital gain in question had to be treated as LTCG as claimed by the assessee.

Relied:CIT v. Dr. Shakuntala [IT Appeal No.117 of 2006, dt. 19-9-2007], CIT v. Smt. Rama Rani Kalia (2013) 358 ITR 499 (All.) : 2014 TaxPub(DT) 0676 (All-HC) and Amar Nath Agarwal v. CIT (2015) 371 ITR 183 (All.) : 2015 TaxPub(DT) 0444 (All-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2015-16

INCOME TAX ACT, 1961

Section 54F

SUBSCRIBE FOR FULL CONTENT