Capital gain

This query is : Open

ASHUTOSH SAXENA (Querist)
Follow

07 December 2016 In a case, assessee purchased an immovable property in year 2005 from RFC (Rajasthan Finance Corporation) which was duly registered with name of the assessee and possession obtained but RFC allowed payment of consideration over next 5 years i.e. 2010 alongwith interest thereon.
The assessing officer wants to take date of acquisition 2010 i.e. when the last installment was paid not 2005 on which property was purchased.
Pl. comment on the above i.e. is the assessing officer correct? And also quote relevant case studies.

VIPIN GUPTA

VIPIN GUPTA (Expert)
Follow

07 December 2016 As per Sec 2(47) (1) transfer includes "sale, exchange or relinquishment of the assets".Sale is however not define in the income tax Act. Refer 57 ITR 185 (SC) Alapati Venkataramiah Vs CIT. In case of CIT Vs Geetadevi Pasari 17DTR 280 (Bom) Capital Gain on sale of immovable property was chargable to tax in theyear in which actual physical possession of the property is given to the purchaser even though the agreement is entered into at earlier date. As in your case the possession was handed over to you in 2005. Year 2005 will be your date of purchase.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now