Ashish Vs ACIT (ITAT Delhi)
Conclusion: Where an asset is acquired by gift, the period of long-term capital asset shall be reckoned from the date when the previous owner acquired such asset and the indexation shall be allowed accordingly from the year of acquisition by the previous owner thus, date of acquisition of property had to be reckoned from the date of allotment.
Held: Assessee, a resident of USA, filed his return claiming refund of Rs.58,57,820/-. During assessment year, assessee had sold two properties for consideration of Rs.1,95,00,0000/- and Rs.72,36,552/- respectively. The assessment was completed whereby the long-term capital loss (LTCL) declared by assessee amounting to Rs.70,19,601 was recomputed as short-term capital gain of Rs.1,22,72,900, thereby assessing the income at Rs.1,75,18,505. In computing the same, AO did not allow credit of certain payment towards cost of acquisition and considered the sale value as Fair Market Value (FMV) computed by the DVO instead of the actual consideration received by assessee. On appeal, CIT(A) granted partial relief to assessee in terms of allowing the benefit of payments not considered by AO towards cost of acquisition as well considering the actual sale value instead of the FMV (since the sale consideration was as per the stamp duty value and also the variation with FMV was less than 10%). However, CIT (A) upheld the action of the AO in treating the LTCL as STCG. It was held that Pureearth, was a successor in interest of Ansal-DCM properties and the builder-buyer agreement dated 10.2018 as executed was not a fresh agreement of allotment or an exchange deed, but, the assessee as a vendee and the Pureearth and Basant as promoters had only redefined and fortified their respective rights and corresponding liablites, arising from the booking of a flat initiated with Ansal-DCM properties in the year 1989. CIT(A) had fallen in error in considering the acquisition of flat T10-412 as an exchange without appreciating that for a transaction to fall into the category of exchange, there should be in existence properties which was not established and further builder-buyer agreement specifically mentioned that due to change in the area and location, the consideration amount was increased and the amount already paid for erstwhile units were adjusted. So, the transaction was not at all of nature of exchange. Thus, date of acquisition of property had to be reckoned from the date of allotment by Ansal-DCM properties in the year. Thus, the tax authorities had fallen in error in considering the income as short-term capital gain.
