Capital gains on possession

Tax queries 844 views 2 replies

AMEET KIMBAHUNE

Consultant

87 Points Joined November 2008

Dear All

one of our clients a registered partnership firm sold one of their commercial properties by executing a sale deed in Feb'2011 (A.Y.2011-12). This was registered with the Registrar. However, the actual possession and conveyance was given in June'2011(A.Y.2012-13). 90% of Sale Consideration was also received in June'2011. A conveyance deed is also executed but not registered.

I have offered the Capital Gains on the basis of possession in A.Y.2012-13; However, the learned ITO thinks otherwise viz. A.Y.2011-12.

Kindly provide case laws - HC, SC to support my viewpoint.

Replies (2)

GAUTAM SHARMA

Audit Assistant

353 Points Joined May 2010

The Contention of A.O. is correct.Please carefully raed the sec 2(47)

Z

Tax Consultation (US and India)

2970 Points Joined September 2011

If conditions of S.53A of transfer of property act are met ,though documents are not registered then property is considered as transferred.Which basically talks about giving possession

This is the exception to rule that conveyance deed should be executed and registered

Since in your case,deed was not registered till A.Y 12-13 and possession was also not handed over,there should be no cap gain in A.Y 11-12

Theres this SC judgement Alapati Venkataramiah V. CIT 1965 which also says that title to immovable property will not pass till deed is registered.

Only excpetion is satisfaction of conditions of S.53A.Since that has also not been met. There should be no Cap gain