S.2(29A): Long term capital asset-Capital gain- Period of holding- Letter of allotment- Period of holding of flat has to be reckoned from date of allotment letter for the purpose of computing capital gain. [S.45, 54F]

The Tribunal held that the assessee was allotted a flat in a building vide allotment letter dated 22-01-2005, by which the builders agreed to sell the flat to the assessee. After signing the said letter of allotment and paying the booking amount, the assessee acquired the right in the flat. Thus, all the rights in the flat were duly acquired by the assessee on 22-1-2005, the period of holding is to be computed with respect to the date of allotment that is 22-01-2005. Thus when the assessee sold the flat on 5-03-2009, the holding period of the right in flat with the assessee was right in flat with the assesse was more than 36 months, therefore, the assessee was right in claiming exemption under section 54F of the Act.ITA no 448/Ind/2013 dt.19-12-2013) (AY. 2009-10) ACIT .v. Sanjay Kumath (2014) The Chambers Journal April P, 81 (Indore)(Trib.)

S.2(42A): Transfer-Letter of allotment-Period of holding-Booking rights-Capital asset of booking rights accrues to buyer only on signing of agreement and not on dare of allotment application. [S.2(14), 2(29A), 45]The court held that for computing the period of holding of capital asset to be counted from the date of buyers agreement and not from the date of booking or date of allotment application. On the facts the allotment or confirmation letter states clearly that no right to provisional or final allotment accrues untill the agreement is signed between the buyer and the builder. Thus , in such a case capital asset of booking rights accrues to buyer only on date of signing buyers agreement and not on date of allotment application or confirmation letter. Gulshan Malik .v. CIT (2014) 223 Taxman 243 (Delhi)(HC) observations:- It is worthwhile to note that the Delhi High Court, in the given facts, recognised the agreement date as the date on which the rights in an immovable property accrues to the buyer, as against the date of application/confirmation letter. This was particularly driven by the fact that the application /confirmation letter specifically stated that no rights would accrue to the allottee until the agreement was signed. The Delhi High Court observed that the conveyance of a property or the doctrine of part performance are not the only ways which result in the creation of enforceable rights. In view of Explanation 2 to section 2(47) of the Act, even the right or an interest in a property could be a transferable capital assets.