Rajive Bhalla, J. - (1.) THE appellant challenges correctness of the order dated March 15, 1999 (annexure P -3), passed by the Income -tax Appellate Tribunal Chandigarh Bench, Chandigarh. The substantial questions of law that arise for adjudication are as follows: (i) Whether, in the facts and in the circumstances of the case, the orders, annexures P -1, P -2 and P -3, are legally sustainable? (ii) Whether, in the facts and in the circumstances of the case, the capital gains arising in the instant case is long -term capital gains or short -term capital gains? (v) Whether, in view of the correct interpretation of the provisions of section 2(29A); section 2(29B); section 2(42A); section 2(42B) and section 2(47)(ii) of the Income -tax Act, 1961, the capital gains arising in the present case can be termed as long -term capital gains? The appellant filed a return of income declaring a net taxable income at Rs. 60,830. The return was selected for scrutiny. The assessee's claim for treating Rs. 2,38,609 received from sale of flat No. 421, Sector 44A, Chandigarh, as a long -term capital gain was rejected by treating it as a short -term capital gains. The assessee filed an appeal before the Commissioner of Income -tax (Appeals), which was dismissed on August 6, 1991. An appeal filed before the Income -tax Appellate Tribunal was dismissed on March 15, 1999.
(2.) COUNSEL for the assessee submits that the flat was allotted on June 7, 1986, vide letter, conveyed on June 30, 1986. The first installment was paid on July 4, 1986. The flat was sold on July 5, 1989, i.e., after 36 months. The sale, therefore, results in long -term capital gains. It is further contended that right to hold flat came to vest in the assessee upon allotment and at the latest upon payment of Rs. 7,500 on July 4, 1986. The sale of the said flat on July 5, 1989, reveals that the assessee held the capital asset for a period exceeding 36 months. It is further submitted that identification of the flat or physical delivery of possession is irrelevant as right to hold property stands crystallized upon allotment and payment of the first installment. The allotment of a particular flat and delivery of its possession would relate back to the allotment and payment of the first installment. The appellant having held the flat from July 4, 1986, the date of payment of first installment to July 5, 1989, fulfils the parameters of a long -term capital gain, thereby rendering the impugned orders illegal and void. It is further contended that the question of law framed in the present appeal has been answered in favour of the assessee in (Vinod Kumar Jain v. CIT I.T.A. No. 140 of 2000, decided on September 24, 2010 - -since reported in : [2012] 344 ITR 501 (P & H). Counsel for the Revenue per contra submits that mere allotment and or payment of the first installment without identification of the flat or delivery of possession has been rightly held not to confer any right vis   -vis flat No. 421, Sector 44A, Chandigarh, which was allotted to the assessee, on November 30, 1988. It is further submitted that the allotment letter could be cancelled at any time and it does not confer any right in any specific unit but merely confers a right to be allotted a unit. The definition of transfer contained in section 2(47) of the Income -tax Act, 1961, has to be read against the assessee and, therefore, the appeal may be dismissed.
(3.) WE have heard counsel for the parties and perused the impugned order.;