Capital gain

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inder (Querist)
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03 December 2009 In case when an assessee is paying EMIs since 1990 To Ansal for acquiring a Right of Flat. in 2007 and subsequnently in 2008 Flat is sold by the Assessee.

can a suggestion be made for the treatment of Capital Gain in Such Case.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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03 December 2009 Hon'ble Andhra Pradesh High Court in the case of M. Syamala Rao v. CIT [1998] 234 ITR 140 held that registration of a document related back to the day on which the agreement of sale was executed, hence, when the builder executed the agreement of sale in 1990, the assessee was to be deemed to be owner of property from that date and, accordingly, the capital gain was to be worked out.

In my opinion, the date of allotment is the date when the right of conveyance get vested. So, if there is difference of 36 months in this date and date of sale , then it can be considered that the said asset was a long term asset and gain on sale of such asset was "Long Term Capital Gains ". In the assessee's case , the allotment date was 1990 and as such on the date of sale , this right was held for more than 36 months.
Further the cost of acquisition is the value shown in the agreement executed in 1990 and not the amount paid in instalments.Accordingly indexation factor of 1990 can be taken.

inder

inder (Querist)
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04 December 2009 Thanks & regards !

bt please note the fact that flat was not in existence and to be built . that Flat was given the possession in only 2007 and Asset came into existence in 2007 only. whether in said case your advice can be adopted.

As I m of the same opinion that he also acquired right to get asset on specified date( ie2007) in 1990 when the contract was executed.

and in the case of K.R. Srinath Vs ACIT (2004)(Mad) it was considered as extinguishment of right. & same matter was decided in Laxmi Devi Ratani Vs CIT (2005)( M.P.)
..

Conclusivly.

In said Case Physical Possession has not been considered.Agreement Date with builder has been considered for calculation Long term and short term Period.

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