Date of acquisition of capital asset is date of allotment letter

PCIT Vs Vembu Vaidyanathan (Bombay High Court)

The controversy between the assessee and the revenue revolves around the question as to when the assessee can be stated to have acquired the capital asset. The assessee argued that the residential unit in question was acquired on the date on which the allotment letter was issued by the builder which was on 31^st December, 2004. The Assessing Officer however contended that the transfer of the asset in favour of the assessee would be complete only on the date of agreement which was executed on 17^th May, 2008.

Entire issue was clarified by the CBDT in its two circulars dated 15^th October, 1986 and 16^th December, 1993. In terms of such clarifications, the date of allotment would be the date on which the purchaser of a residential unit can be stated to have acquired the property.

In that view of the matter, CIT appeals of the Tribunal correctly held that the assessee had acquired the property in question on 31^st December, 2004 on which the allotment letter was issued.

FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT

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