ACIT Vs Bina Batlivala (ITAT Delhi)
ITAT Holds Property as Long-Term Capital Asset Because Possession and Full Payment Were Completed Earlier; ITAT Deletes Short-Term Capital Gain Addition Because Agreement to Sell Completed Transfer Earlier; Property Sale Treated as Long-Term Capital Gain Because Full Consideration Was Paid in 2013; ITAT Allows Indexation Benefit Because Holding Period Counted From Possession Date.
The Income Tax Appellate Tribunal (ITAT) Delhi dismissed the Revenue’s appeal and upheld the order of the CIT(A) treating the property sold by the assessee as a long-term capital asset eligible for indexation benefits. The assessee, a non-resident senior citizen, had filed her return for Assessment Year 2019-20 declaring income from house property and a long-term capital loss arising from sale of a residential property located at The Belaire, Gurgaon. The Assessing Officer, however, treated the gain as short-term capital gain on the basis that the property was registered in the assessee’s name on 25.11.2016 and sold on 27.08.2018, resulting in a holding period of less than two years. The Assessing Officer accordingly disallowed the long-term capital loss claimed by the assessee and added Rs.2.03 crore as short-term capital gain.
During appellate proceedings, the assessee produced additional evidence showing that the property had originally been booked by another individual in 2007 and was transferred to the assessee through an agreement to sell dated 19.07.2013 for Rs.4.10 crore. The CIT(A) recorded findings that the entire sale consideration of Rs.4.10 crore had been paid by the assessee by 05.09.2013 and possession of the property had also been handed over during Financial Year 2013-14. Though the formal conveyance deed by the builder was executed only on 25.11.2016, the CIT(A) held that the assessee had already become the de facto owner of the property during FY 2013-14 and was enabled to enjoy the property as owner.
