Sumit Export Vs ACIT (ITAT Mumbai)
ITAT Mumbai held that the date of acquisition of the property under consideration was to be reckoned from the date of the allotment letter and capital gain will be calculated accordingly.
Facts-
During the assessment proceedings, Assessing Officer observed that vide Sale Deed dated 19.05.2012 assessee entered with M/s. Veer Gems and sold the office premises
AO observed that as per the working submitted by the assessee, assessee has shown acquisition of property in Financial Year 1998-99 and in subsequent few years assessee has carried out improvement in the property. However, he observed that when pursing the sale agreement, he observed that the assessee had received allotment of the above said premises only on 29.07.2010 as such the asset so transferred becomes short term capital asset on the date of transfer i.e.,19.05.2012. Therefore, the capital gain on sale of this asset would constitute short term capital gain. Accordingly, the assessee was asked to why the premises so transferred should not be treated as short term capital gain. AO rejected the reply of the assessee and confirmed the addition.
CIT(A) dismissed the appeal filed by the assessee. Being aggrieved, the present appeal is filed.
Conclusion-
Referring to the clarification issued by the CBDT, vide its Circular No. 672, dated 16.12.1993, it was observed by the Hon’ble High Court, that the Board had clarified that if the terms of the schemes of allotment and construction of flats/houses by the co-operative societies or other institutions were similar to the terms of allotment and construction by D.D.A, then on the same basis the acquisition of the property was to be related to the date on which the allotment letter was issued. On the basis of its aforesaid observations, the Hon’ble High Court had dismissed the appeal of the revenue. In the backdrop of our aforesaid deliberations, we are of the considered view that as no infirmity emerges from the order of the CIT(A), who we find had rightly concluded that the date of acquisition of the property under consideration was to be reckoned from the date of the allotment letter i.e 03.12.1999, therefore, we uphold his order.
Respectfully following the above said decision, since the issue is exactly similar and facts are also identical, we are of the view that date of acquisition of the property was to be reckoned from the date of the allotment i.e in the F.Y. 1998-99. Respectfully following the above decision, we allow the ground raised by the assessee.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
1. This appeal is filed by the assessee against order of the Learned Commissioner of Income Tax, National Faceless Appeal Centre, Delhi [hereinafter in short “Ld.CIT(A)”] dated 11.03.2022 for the A.Y. 2013-14.
2. Brief facts of the case are, assessee filed its return of income on 28.09.2013 declaring total income of ₹.1,67,34,250/-. The return was processed u/s. 143(1) of Income-tax Act, 1961 (in short “Act”). Subsequently case was selected for scrutiny under CASS and notice u/s.143(2) and 142(1) of the Act were issued and served on the assessee. In response AR of the assessee attended and submitted the relevant information as called for.
3. Assessee is engaged in the business of manufacturing and trading in Cut and polished diamonds. During the assessment proceedings, Assessing Officer observed that vide Sale Deed dated 19.05.2012 assessee entered with M/s. Veer Gems and sold the office premises bearing No. BC4021 in Bharat Diamond Bourse, Bandra Kurla Complex for a consideration of ₹.1.93 crores. He observed that assessee has declared the computation of income under the head Capital gain relating to above sale transaction as under: –
