qualifying for long term capital gain .

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RASHMI SANGEKAR (Querist)
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10 October 2007 sir ,I purchase a resdential flat on 31/jan/2004 with one chq payment.I have full and final receipt of that date.as our building had not got oc builder gave temporary possesion letter for making furniture and fixture stating that he will handover possesion as he gets oc from bmc.temposray posseion letter also is dated 31/jan/2004.I started staying there from february/2004.I have only one house.there was a scheme and builder paid my stamduty on 27/february/2004 and we enter in agreement on 27/february /2004.I was unaware about registration so I didn't do it immediately. in august when I went to builder for registration he with white ink change my february date to july and we got my agreement registerd.now my agreemnt date is 27/july/2004. now in month of april 2007 I sold the flat. will my case qualify long term capital gain as temporary possesion date and full value paid date is 31/jan/2004. pls tell.

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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10 October 2007 A possession satisfying section 53A of the Transfer of Property(TP) Act is recognised as 'transfer' under the Income Tax Act.

But the point is what are the terms conditions of the 'temporory possession' you are refering to? If legally that temporory possession can not be given without the Occupation Certificate from Municipality, then the temporory occupation granted could get hit by Section 53A of the TP Act. This aspect has to be legally cleared.

S.Srinivasaraghavan

RASHMI SANGEKAR

RASHMI SANGEKAR (Querist)
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10 October 2007 sir the letter given is as follows ",since we have not receivrd the oc from bmc ,we are unable to part with the posseion and hence we are handing over temporary posseion for making furniture and fixtures . after receiving the oc we will hand over the posseion." and sir oc to our building is recieve after 2 years that is 2006.property tax was calculate by bmc from june 2004. pls tell whom to consulate

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Srinath A. N.

Srinath A. N. (Expert)
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10 October 2007 The temporary possession certificate issued by builder is not legally valid. Only proper authority can issue OC. Without obtaining OC builder cannot give possession of the property.

In case your, agreement is dated 27.07.2004 and you are not having any substantial document to prove the property has been transferred in your name before 27.07.2004. Neither the possession certificate issued by builder nor the date of payment of cheque will prove transfer of property. You also need to verify the terms of agreement. Since, Occupation and possession are having different meaning, you need to check IT Act to know whether it requires occupation or possession? because without OC you cannot occupy, but you can have possession.