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sajan didwania (owner)     01 October 2011

Long term capital gain on sale of apartment - reference date

Pls clarify if someone books an apartment of Unitech in Gurgaon and after construction the conveyance deed done in Dec.2008 but as he dies immediately after registry, his daughter took possession of aptt in July 2009 as per possession letter of builder. Tell me 36 month will be taken from which date to be eligible for availing LONG TERM CAPITAL GAIN on sale of this apartment. Can it be sold in January 2012 i.e 36 months after Registry date or She has to wait till July 2012 i.e 36 months from Date of possession letter from builder to him. An early views will be highly appreciated.


 10 Replies

Shailesh Kr. Shah (Advocate)     02 October 2011

The conveyance deed has been executed on Dec-2008 then possession is not material. Period would be count from the date of execution of conveyance deed.

1 Like

Anumita Sarkar (Tax Advisor/Litigator)     05 October 2011

Mr. Didwania,

Although I agree with Mr. Shailesh Shah, i would still like to refer few judgments which mite help you to cleqr your doubts.  Booking, possession of flat and registration is a part of the process of acquiring flats from builders. Hence, this had been an debatable issue. Go through the following judgments:-

1) Jitendra Mohan v. Income-tax Officer, Ward 28(2), New Delhi [2007] 11 SOT 594 (Delhi)

2) Hon’ble Bombay High Court in the case of CIT v. Vimal Lalchand Mutha [1991] 187 ITR 613

3) Punjab and Haryana High Court in the case of CIT v. Ved Parkash & Sons (HUF) [1994] 207 ITR 148

4) CIT vs Tata Teleservice Ltd 122 ITR 594

5) M. Syamala Rao v. CIT [1998] 234 ITR 140

6) Smt. Lata G. Rohra v. Deputy Commissioner of Income-tax, C.C. 39, Mumbai [2008] 21 SOT 541 (Mum.)

hope it helps !

sajan didwania (owner)     05 October 2011

Thanx...i will look into these case laws..but can u tell me these case laws are in favour of Registration date or against.

Shailesh Kr. Shah (Advocate)     06 October 2011

go to www.indiankanoon.org and see judgements.

1 Like

dhiraj aggarwal (TAXPOINT (Director) 9829551008)     09 October 2011

As per Section 49(1) read with section 2(42A) of income tax Act, period of holding should be taken from the date of possession of property in case of immoveable property

1 Like

sajan didwania (owner)     09 October 2011

Friends i don`t agree with Mr.Dheeraj Aggarwal`s answer. I beleive Possession Date is taken in cases where transfer could not be completed as Law says only by way of proper Registration Transfer of Capital Assets completes but in general practice when apartments are being bought with builders in majority case they give possession much before and REGISTRY takes place some times very late so to accomodate it Law took consideration of Possession as Part Performance of Transfer of Property as per section 53 A. But as soon as Property get transfered by way of Registry its meets requirement of Transfer of Capital Assets as per section 2 (47) (i) and when it meets need of this section why should we meet requirement of section 2 (47) (v) which state Part Performance of a contract in section 53 A of Transfer of Property Act.

Please Respond whoever agrees / disagrees with me but pls quote the LAW/Act Sections and Case Laws if possible.

Capital gain on capital asset are applicable on transfer of asset so transfer date will decide what is acquisition date and what is date of sale.so first let us talk about what is the meaning of transfer.
transfer, in relation to a capital asset, includes,
the sale, exchange or relinquishment of the asset ; or
the extinguishment of any rights therein ; or
the compulsory acquisition thereof under any law ; or
in a case where the asset is converted by the owner thereof into, or is treated by him as, stock-in-trade of a business carried on by him, such conversion or treatment or
the maturity or redemption of a zero coupon bond; or
any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A 25 of the Transfer of Property Act, 1882 (4 of 1882) ; or
any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immovable property.

As per Transfer of property act 1982 section 54 ,sale of immovable property shall be registered if property value is more than 100 other wise sale will not be effective.section 54 reproduced as under

54. "Sale" defined
"Sale" is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.
Sale how made: Such transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.

In the case of tangible immovable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.
Delivery of tangible immovable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.
Contract for sale: A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties.It does not, of itself, create any interest in or charge on such property.

so from above the transfer date of immovable property depend upon two things

date of registration
date of possession of immovable property

in general practice date of registration and date of possession is same but in some cases it may be different so if amount is paid and possession is given even registration is pending then transfer date will be date of possession by the purchaser under section 53A of transfer of Property Act as explained in definition of "transfer" under Income Tax Act

On the basis of above details in my opinion the answer of my point should be DATE OF REGISTRATION. as it is the final action denoting the Transfer of Ownership.


I will appreciate an active participation as its a point where i have seen big confusion.

and need a strong solution to conclude the answer.

Sajan Didwania


Anumita Sarkar (Tax Advisor/Litigator)     09 October 2011

Mr. Didwania,


which judgments did you refer?

1 Like

sajan didwania (owner)     09 October 2011

None....I did`nt got any judgement refering such case..if u have any in favour or against can u let me know.....


sajan didwania (owner)     09 October 2011

Hi Anumita,

The cases u reffered above are of mainly on Agreement of Purchase. I want a case where it has been discussed registry or possession date.

If you can help me i shall be obliged. As its very much confusing and different people gives different views. While there should be only one view as its a clear cut matter.



dhiraj aggarwal (TAXPOINT (Director) 9829551008)     10 October 2011



This is very clear about your query LTCG shall be calculate from the period of possession. In section 27(iiia) of income tax act it is mentioned clearly

Judgement :- Authority for advance rulings v. jasbir singh sarkaria, In re (2007) in which desicion was The purchaser has taken the possession of the property. It is enough if transferee has, by virtue of that transaction, a right to enter upon and exercise acts of possession effectively.

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