×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
This appeal by the assessee is against the order dated 24.08.2018 of the CIT(Appeals)-V, Bengaluru, relating to assessment year 2015-16.
2. There are basically 3 issues that arise for consideration in this appeal. The first issue is with regard to the computation of capital gain on sale of a property viz., Site No.513 (PII), R.R. Nagar, Bangalore by the assessee [hereinafter referred to as the RR property]. It is not in dispute that the assessee acquired the RR property from Ideal Homes Co-op. Building Society Ltd., Bangalore, under a lease-cum-sale agreement dated 22.3.2001. As per the terms of lease-cum-sale agreement, the assessee paid a sum of Rs.60,000 towards the value of site on the date of agreement for lease-cum-sale. As per the further terms of this agreement, the assessee has to construct the building on the site within two years from the date of agreement. The assessee should not alienate the site for a period of 10 years. The assessee took possession of the property and constructed a building. As per the agreement, for 10 years the assessee has to pay annual lease charges and at the end of 10 years period, the property will be conveyed to the assessee. It is not in dispute that the assessee complied with the aforesaid terms of lease-cum-sale agreement and was in possession of the property and put up construction on the site on the date of agreement and subsequently.
3. The society by registered sale deed dated 31.08.2014 conveyed the property to the assessee. The fact that the assessee was allotted the site as per the terms of lease-cum-sale agreement dated 22.3.2001 and the fact that assessee complied with all the conditions in the said lease-cumsale agreement have been acknowledged in the sale deed.
4. The assessee so d the site as well as the building constructed thereon under a Sale Deed dated 03.12.2014. The assessee computed long term capital ga n on the sale of this property by taking the date of lease-cum-sale agreement viz., 22.03.2001 as the date of acquisition of the property. Since the property was held by the assessee for more than 3 years, the assessee claimed that the capital gain arising on transfer was a long term capital gain.
5. The AO, however, construed the date of acquisition of property by the assessee as 31.08.2014, the date on which the society made an absolute conveyance to the assessee. Since the assessee sold the property on 03.12.2014, the AO treated the date of acquisition of property as 31.08.2014 and the date of sale being less than 36 months, the AO construed the capital gain on sale of property as a short term capital gain. The assessee had claimed deduction u/s. 54F of the Act by investing the capital gain in acquisition of another property. Since the gain in question was construed as a short term capital gain, the deduction claimed u/s. 54F of the Act was not allowed by the AO.
6. On appeal by the assessee, the CIT(Appeals) confirmed the order of AO.
7. Aggrieved by the order of CIT(Appeals), the assessee has preferred the present appeal before the Tribunal and the relevan grounds of appeal raised by the assessee in this regard are contained in ground Nos.1 to 4.
8. We have heard the rival submissions. The dispute between theAssessee and the Revenue is as to whether the gain on sale of the RR Property which was obtained originally on 22.03.2001 on lease from the society which was subsequently conveyed absolutely by the society to the Assessee by a registered sale deed dated 31.08.2014 can be said to be a LTCG.
9. Sec.2(29B) of the Act defines Long term capital gain as follows:- "long-term capital gain" means capital gain arising from the transfer of a long-term capital asset; Sec.2(29A) of the Act defines Long term Capital asset as follows:- "long-term capital asset" means a capital asset which is not a short-term capital asset ; Sec.2(42A) of the Act defines Short Term Capital asset as follows:- “(42A) "short-term capital asset" means a capital asset held by an assessee for not more than thirty-six months immediately preceding the date of its transfer :