Period of holding - capital asset - urgent

No capital gain till the land is sold out... The hodling period shall be reckoned from the date on which the previous land was bought i.e. 1/4/2007.

https://www.indiantaxupdates.com/2012/12/31/brief-note-on-taxability-of-capital-gains/

Thank you for d reply.  But can’t trace any matter on the link given which substantiates that the holding to be reckoned from the date of old land purchase. pls elaborate....

You said the first agreement was cancelled. Did you enter into a new agreement with the authority for the new land, in which the consideration was already paid in advance in 2007 ? I am guessing that the value or cost of acquisition would remain the same but the indexation would change. Since the holding period is less than 3 years, it would be a stcg. wait for others to reply.

Yes, the new agreement is entered without any further cost payable by M/s. A (firm). However, by any chance, can we claim that change in the law of development authority had caused in change in agreement/ change in land. Accordingly, the period of holding should be recognised from the date of purchase of original land. 

I understand it’s a bit stretched argument.  Has anybody come across any judgement? But that is the reason I need an opinion on the above.

Many thanks for your time.

Holding of period  should count from 01/04/2007

Since assessee get right to acquire a flat

 & if such Right is more than 36 month  then it becomes long term CG

as decided in P & H high court decision in Vinod kumar Jain V/s CIT case

The assessee was allotted a flat on 27-2-1982 on instalments under residential scheme of the DDA. The possession of the said flat was, however, given to the assessee on 15-5-1986 and the letter issued in that behalf indicated the flat number and called upon the assessee-allottee to deposit the balance amount. The assessee sold the said flat on 6-1-1989 and claimed that capital gain arising on sale of said flat was long-term capital gain. The assessee had also claimed exemption u/s.54 on account of purchase of another flat on 31-1-1989. The Assessing Officer disallowed the assessee’s claim holding that the possession of the flat was given to the assessee on 15-5-1986 and, therefore, the capital gain on sale of the flat in question was short-term capital gain governed by S. 2(42A). The Tribunal upheld the decision of the AO.

On appeal by the assessee, the Punjab and Haryana High Court reversed the decision of the Tribunal and held as under :

“(i) A conjoint reading of S. 2(14), S. 2(29A) and S. 2(42A) leads to one conclusion that a capital asset held by the assessee for 36 months would be termed as a long-term capital asset and any gain arising on account of sale thereof would constitute a long-term capital gain.

(ii) Circular No. 471, dated 15-10-1996 issued by the CBDT, on which heavy reliance had been placed by the assessee, describes the nature of right that an allottee acquires on allotment of a flat under self-financing scheme. According to it, the allottee gets title to the property on the issuance of an allotment letter and the payment of instalments is only a consequential action upon which the delivery of possession flows.

(iii) The provisions of S. 2(14), S. 2(29A) and S. 2(42A) encompass within their ambit those cases of capital assets which are held by an assessee. Once that is so, adverting to the facts of the instant case, the assessee was allotted a flat on 27-2-1982 on payment of instalments by issuance of an allotment letter and he had been making payment in terms thereof, but the specific number of the flat was allocated to the assessee and possession delivered on 15-5-1986. The right of the assessee prior to 15-5-1996 was a right in the property. In such a situation, it could not be held that prior to the said date, the assessee was not holding the flat.

(iv) Accordingly, capital gain arising on sale of flat was a long-term capital gain and the assessee was entitled to set off the same u/s.54.”

Thank you for your opinion and time.

You gave me food for thought.