The Income Tax Appellate Tribunal (ITAT), Mumbai bench, held that the date of acquisition of the property should be considered for computing capital gain. Thus, the bench deleted the addition made by the assessing officer.
The assessee, D.K. Brothers, after filing the return of income, had the case selected for scrutiny. During the scrutiny proceedings, it was noticed from AIR information that the assessee had sold immovable property on 08.02.2011 for a sale consideration of Rs.84,33,000/-.
During the proceedings, the AO, declining the contentions raised by the assessee, took the date for the transfer of the property in question as 15.09.2010 instead of 1991 when the assessee had booked the plot for the purpose of computing the capital gain. Therefore, the AO treated the capital gain as Short Term Capital Gains (STCG) only, as the assessee had held the assets for less than 36 months, thereby making the addition.
Aggrieved, the assessee filed a further appeal before the CIT(A), who confirmed the addition by dismissing the appeal. Therefore, the assessee filed another appeal before the tribunal.
Harsh Soni, Counsel for the assessee, argued that the property was purchased and allotted in F.Y. 1991-92 by making a payment of Rs.1,87,500/-. The remaining payment was made in installments up to 2009-10, and the sale was registered in favor of the assessee on 15.09.2010. Therefore, by taking the date of ownership as 28.01.1992, the assessee rightly computed the LTCG.
Ajay Singh, Counsel for Revenue, supported the order of lower authorities.
The tribunal relied upon the decision of the Bombay High Court in the case of Vembu Vaidyanathan and observed that the date of allotment of the property is the date of acquisition unless allotment is canceled or the allottee has withdrawn from the scheme.
After reviewing the facts and records, the two-member bench of Amarjit Singh (Accountant Member) and Kuldip Singh (Judicial Member) directed the AO to compute the capital gain by taking the date of acquisition of the property by the assessee as 28.01.1992.
Therefore, the bench allowed the appeal of the assessee.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
