In a case before it, ITAT Delhi bench held Date of issuance of allotment letter to be considered as date of acquisition of property; ITAT Delhi follows CBDT circular No. 471, dated 15.10.1996

Residential flat was allotted to assessee vide allotment letter in 12.12.2005 and beginning from financial year 2005-06 till financial year 2014-15 assessee had made payments towards purchase of flat. During relevant year assessee had sold said property and after deducting an amount towards indexed cost of acquisition under section 48, assessee offered long-term capital gain and claimed that since allotment letter was issued in favour of assessee in respect of said property in financial year 2005-06, she was entiled to claim indexed cost of acquisition based on payments made in each financial year beginning from financial year 2005-06.

Assessing Officer rejected assessee's claim of deduction of indexed cost of acquisition and on estimate basis allowed, 1/4th of sale consideration as deduction towards indexed cost of acquisition.

 Dispute Resolution Panel (DRP) found that assessee executed apartment buyers agreement with builder on 04.08.2010 falling in financial year 2010-11 and held that financial year 2010-11 was year in which assessee acquired property and directed Assessing Officer to allow deduction towards indexed cost of acquisition on payments made from financial year 2010-11 onwards.

 In Circular No. 471, dated 15.10.1996, the CBDT has clarified that in respect of flats allotted under the self-financing scheme of the Delhi Development Authority (DDA), the date of issuance of allotment letter would be considered to be the date of acquisition of the property. This is so because, the allotment is final unless it is cancelled or the allottee withdraws from the scheme. Since date of acquisition of residential flat had to be reckoned from date of allotment letter, benefit of indexed cost of acquisition should be available to assessee based on payments made beginning from financial year 2005-06 and not from execution of apartment buyers' agreement, as directed by DRP.

[In favour of assessee] (Related Assessment year : 2019-20) -  [Ms. Renu Khurana v. ACIT(International Taxation) [2023] 149 taxmann.com 160 (ITAT Delhi)]