Minaxi Mahesh Pawani (Deceased) through Legal Heir Pratik Mahesh Pawani (ITAT Mumbai)
For Capital Gain and for Indexation holding period shall be computed from the date of the allotment letter and not the date of registration of sale agreement
In the case of Minaxi Mahesh Pawani (deceased), represented by her legal heir Pratik Mahesh Pawani, the ITAT Mumbai ruled that the holding period for computing capital gains should commence from the date of the property allotment letter, not the registration date of the sale agreement. The appeal challenged the treatment of long-term capital gains as short-term capital gains by the assessing officer, who based his computation on the agreement registration date. The assessee was allotted a flat on February 15, 2010, and paid an advance, but the sale agreement was registered on May 13, 2014. When the flat was sold while still under construction, the officer considered the gains short-term, thus denying exemptions under Section 54F. The ITAT held that the right to own the property was established upon issuance of the allotment letter, making the holding period exceed 36 months and qualifying the gains as long-term. The Tribunal also addressed the issue of claiming deductions under Section 54F without a revised return, supporting the assessee’s claim based on Supreme Court precedents. The order emphasizes the importance of the allotment letter in determining the holding period for capital gains tax purposes.
