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| The Tax Publishers2020 TaxPub(DT) 1552 (Mum-Trib) INCOME TAX ACT, 1961
Section 2(14)
Contractual right of purchaser i.e. assessee to obtain title to immovable property for a price, which right was assignable, had to be considered to be 'property' and, therefore, a 'capital asset'. As assessee retained right in asset for more than 36 month, therefore, assessee was qualified for claiming deduction under section 54 as regards resulting capital gain having arisen on cancellation of provisional booking of flat.
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Capital gains - Capital asset - Contractual right of purchaser i.e. assessee to obtain title to immovable property for a price -
Assessee had booked a flat vide allotment Letter, dated 10-4-2007. Out of the total cost of Rs. 30 lacs assessee had paid Rs. 22 lacs. On cancellation of the allotment which was after 36 months the assessee got Rs. 38 lacs and Rs. 15 lacs was surplus against surrender of assessee's right. Against this upon taking of another flat, assessee claimed deduction under section 54. AO held that provisional booking did not give rise to capital asset in the hands of assesse and hence said receipts were to be treated as 'income from other sources' and no deduction could be allowed under section 54. Held: Contractual right of purchaser i.e. assessee to obtain title to immovable property for a price, which right was assignable, had to be considered to be 'property' and, therefore, a 'capital asset'. As assessee retained right in asset for more than 36 month, therefore, assessee was qualified for claiming deduction under section 54 as regards resulting capital gain.
REFERRED : Shri Girish P. Rupani (ITA No. 1028/Mum/2018 for assessment year 2012-13) decided by the ITAT on 10-4-2019
FAVOUR : In assessee's favour
A.Y. :
IN THE ITAT, MUMBAI BENCH
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