$~44
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 18th March, 2014
+ ITA 114/2014 & CM Appl.4959/2014 (delay)
COMMISSIONER OF INCOME TAX-XVI ..... Appellant
Through Ms Suruchi Aggarwal, sr. standing
counsel
versus
K. RAMAKRISHNAN ..... Respondent
Through
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE R.V.EASWAR
S. RAVINDRA BHAT, J.: (OPEN COURT)
The revenue claims to be aggrieved by the order dated 17.5.2013 of
the Income Tax Appellate Tribunal (ITAT). The revenue's appeal
questioning the deletion of Rs.55,72,612/- by the CIT(Appeals) was
dismissed. It is urged that the findings of the Tribunal, in effect
upholding the assessee's contention that the amount sought to be taxed
was in fact a long term capital gain is not justified. The learned counsel
invited our attention to the provisions concerned i.e. section 54EC and
submitted that given the circumstance of the case especially the relevant
dates set out in para 7 of the impugned order, it could not be said that
ITA 114/2014 Page 1 of 4
the assessee had acquired interest of the kind that can enable him to say
that he "held" the asset for more than 36 months to entitle him to the
benefit of long term capital gain.
2. In this case the relevant facts relating to the acquisition of the
capital asset, i.e., the HUDA plot and its ultimate disposal of the assessee
was considered by the Tribunal and discussed as follows :
"5. The ld. counsel for the assessee, on the other hand, has
placed strong reliance on the impugned order. Besides
addressing the oral arguments, he has also placed before us
a brief written synopsis. It has been contended that the
Assessing Officer had wrongly treated the capital gain as
short-term capital gain and while doing so, had erroneously
taken the date of execution of the conveyance deed in favour
of the assessee as the relevant date, rather than the date of
allotment of the plot to the assessee by HUDA; that
undisputedly, the assessee had booked the plot in question
with the HUDA on 18.06.1986 and had deposited the earnest
money; that the plot was allotted to the assessee on
03.08.1999; that on receipt of the allotment letter, the
assessee had deposited further amounts on various dates, as
given in the chart contained in the written synopsis; that by
the expiry of the period of sixty days from the date of
allotment, i.e., by 03.10.1999, the assessee had deposited
96% of the tentative cost of the plot; that as per the terms
and conditions contained in the allotment letter, since the
assessee paid the instalment as demanded by HUDA, the
assessee was to become the beneficial owner of the
residential plot in question; that as per clause 5 of the
allotment letter, a letter of 'acceptance was to be filed by the
assessee along with an amount of Rs.10,155/-, within thirty
days, thereby having paid 25% of the total cost of the plot;
that this amount had to be deposited by the assessee in his
capacity as the owner of the plot, on allotment, which was
done, as evidenced by the receipt of payment; that as per
clause 11 of the allotment letter, the right of the assessee in
ITA 114/2014 Page 2 of 4
the allotted plot was an absolute right as owner thereof; that
this clause prohibited the assessee from transferring the plot
except with the permission of HUDA; that this clause stated
that it was till the execution of the conveyance deed, that the
assessee was not to be treated as owner of the plot; that as
per clause 12, execution of the conveyance deed was not
made subject to the handing over of the possession of the
plot; that thus, right from 1999, when the plot was allotted to
the assessee, the assessee was having absolute rights
thereon; that in 'Jitender Mohan', 11 SOT 594 (Del), it has
been held that it is the date of allotment which is relevant for
the purpose of computing a holding period and not the date
of registration of conveyance deed; that Section 47 of the
Registration Act lays down that registration of a document
operates retrospectively; that in 'Gurbax Singh vs. Kartar
Singh', 254 ITR 112 (SC), it has been held that registration
of a document would relate back to the date of its execution;
that in 'Hamda Amla V. Avadiappa (1991), 1 SCC 715 and
'Syamla Rao vs. CIT', 234 ITR 140 (A), it has been held
likewise; that therefore, the Ld.CIT (A) has correctly decided
the issue in favour of the assessee; and that as such, there
being no merit therein, the appeal of the Department be
ordered to be dismissed."
3. In this case the assessee acquired possession of the plot on
12.12.2005 and sold through a registered sale deed dated 9.1.2008. This
Court is of the opinion that having regard to the findings recorded by the
Tribunal, the assessee had acquired beneficial interest to the property at
least 96% of the amount was paid i.e. by 3.10.1999. This Court is
supported in its findings by a Division Bench ruling of the Punjab and
Haryana High Court in Madhu Kaul vs. CIT, (ITA 89/1999 decided on
17.1.2014).
In view of the reasons the Courts is satisfied that the Tribunal's
ITA 114/2014 Page 3 of 4
impugned order does not disclose any error calling for interference.
The appeal is accordingly dismissed.
S. RAVINDRA BHAT
(JUDGE)
R.V. EASWAR
(JUDGE)
MARCH 18, 2014
vld
ITA 114/2014 Page 4 of 4
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