MADHUBAN CO OP HSG. SOC LTD, MUMBAI V. ITO WD 22(2)(4), MUMBAI

CO 164/MUM/2011

• Counselvise Citation: [2014] 112 COUNSELVISE.COM (IT) 3844 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 12 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 13-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIM K MODI
• Keywords: Capital asset; Cost of acquisition; Capital receipt; Capital Gains

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL MUMBAI - B BENCH MUMBAI . . , / ! ! ! ! , BEFORE S/SH.B.R.MITTAL,JUDICIAL MEMBE R & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO. 3257/MUM/2011, ' ' ' ' # # # # / ASSESSMENT YEAR 2006-07 ITO WARD 22(2)-4 VASHI RLY. STATION COMPLEX, TOWER NO.6, 4 TH FLOOR,VASHI NAVI MUMBAI- VS. M/S MADHUBAN CHS LTD., LALA JAMNADAS GUPTA MARG, DEONAR FARM ROAD, DEONAR, MUMBAI-400088 PAN: AAATM8274G ( $% / APPELLANT ) ( &'$% / RESPONDENT) /. ITA NO. 3856/MUM/2011, ' ' ' ' # # # # / ASSESSMENT YEAR 2006-07 M/S MADHUBAN CHS LTD., LALA JAMNADAS GUPTA MARG, DEONAR FARM ROAD, DEONAR, MUMBAI-400088 VS. ITO WARD 22(2)-4 VASHI RLY. STATION COMPLEX, TOWER NO.6, 4 TH FLOOR,VASHI NAVI MUMBAI. PAN: AAATM8274G ( $ / APPELLANT) ( &'$% / RESPONDENT) &'( /. C.O. NO. 164/MUM/2011, ' ' ' ' # # # # / ASSESSMENT YEAR 2006-07 M/S MADHUBAN CHS LTD., LALA JAMNADAS GUPTA MARG, DEONAR FARM ROAD, DEONAR, MUMBAI-400088 VS. ITO WARD 22(2)-4 VASHI RLY. STATION COMPLEX, TOWER NO.6, 4 TH FLOOR,VASHI NAVI MUMBAI. PAN: AAATM8274G ( $% / APPELLANT ) ( &'$% / RESPONDENT) $% ) * / REVENUE BY : SHRI ASHIM K. MODI &'$% ) * / ASSESSEE BY : SHRI VIMAL PUNMIYA ' ) +, / DATE OF HEARING : 10 . 02 .201 4 -.# ) +, / DATE OF PRONOUNCEMENT : 26.02 .201 4 ' , 1961 ) 254 )1( +/+ 0 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1 961(ACT) PER RAJENDRA,A.M: CHALLENGING THE ORDERS DT.27.01.2011 OF THE CIT(A)- 33,MUMBAI,ASSESSING OFFICER(AO) AND ASSESSEE HAVE FILED CROSS APPEALS FOR THE YEAR UNDE R CONSIDERATION.ASSESSEE HAS ALSO FILED CROSS OBJECTIONS.GROUNDS OF APPEAL FILED BY THE AO READ A S UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD.CIT(A) ERRED IN ACCEPTING THE COST OF ACQUISITION OF THE ADDITIONAL 0.25 FSI AT RS. 35,55 ,290/- AS AGAINST THE ESTIMATED COST OF ACQUISITION AT NIL BY THE A.O. 2.ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ACCEPTING THE COST OF 2 ITA NOS.3257 & 3856 MUM 2011 & C.O. 164 MUM 2011 M/S. MADHUBAN CHS LTD. ACQUISITION AS ABOVE AND IGNORING THE TERMS OF MOU, WHEREBY THE ASSESSEE HAD RECEIVED COMPENSATION IN RESPECT OF SURRENDER OF RIGHT OF PENALTY AND THREE FLATS. 3.ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN ACCEPTING THE COST OF ACQUISITION AS ABOVE IGNORING THE FINDING OF THE AL ) WHICH WAS BASED ON THE AGREEMENT BETWEEN THE ASSESSEE AND CONTRACTOR DATED 26.06.1994. 4.THE APPELLANT PRAYS THAT THE ORDER OF LD. CIT(A) ON THE ABOVE GROUNDS HE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 5.THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY ITA/3856/M/2011: ASSESSEE HAD FILED FOLLOWING GROUNDS OF APPEAL: 1.THE LEARNED COMMISSIONER OF INCOME TAX OUGHT TO H AVE ALLOWED INDEXATION FROM THE YEAR 1990 ONWARDS, I.E. DATE FROM WHICH THE APPELLANT ENTERED INTO AGR EEMENT FOR SALE WITH OWNERS OF PLOT AND GOT THE POSSESSION OF THIS PLOT. 2.THE APPELLANT PRAYS TO ALLOW THE INDEXATION OF TH E CAPITAL GAIN FROM THE YEAR 1990 AS THE AGREEMENT FOR SALE AND POSSESSION OF THE LAND WAS WITH APPELLANT FROM THE YEAR 1990 AND RECALCULATE THE LONG TERM CAPITAL GAIN ON TRANSFER AND USE OF FSI. 3.THE APPELLANT CRAVE, LEAVE AND LATER ANY OF THE G ROUND OF APPEAL AT LATER STAGE. ASSESSEE HAS ALSO FILED ADDITIONAL GROUNDS OF APPEA L AND SAME READ AS UNDER:- 1.THE LD.CIT(A) ERRED IN CONSIDERING CAPITAL RECEIP T WHICH IS NOT CHARGEABLE UNDER THE HEAD INCOME FROM CAPITAL GAIN AS TAXABLE CONSIDERATION WHICH I S CHARGEABLE UNDER THE HEAD INCOME FROM CAPITAL GAIN. 2.THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER ALL O R ANY OF THE ABOVE GROUNDS AT ANY TIME BEFORE OR DU RING THE COURSE OF HEARING OF APPEAL. C.O. NO. 164/MUM/2011: FOLLOWING ARE THE GROUNDS OF CROSS OBJECTIONS (C.O. ) FILED BY THE ASSESSEE: THE ORDER PASSED BY COMMISSIONER OF INCOME TAX (APP EALS)-33 IS CORRECT AND THE AMOUNT SHOULD NOT BE DISALLOWED. ASSESSEE,A CO-OPERATIVE HOUSING SOCIETY,FILED ITS R ETURN OF INCOME ON 29.03.2006,DECLARING TOTAL INCOME OF RS.5,42,500/-.AO FINALISED THE ASSESSMENT ORDER U/S.143(3) OF THE ACT,ON 23.12. 2008, DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 75.44 LAKHS.EFFECTIVE GROUND OF APPEALS FILED BY THE AO AND THE ASSESSEE IS ABOUT COST OF ACQUISI TION OF THE ADDITIONAL 0.25 FSI AND TAXABILITY OF THE SAME. 2. DURING THE ASSESSMENT PROCEEDINGS,AO FOUND THAT ASS ESSEE HAD SHOWN INCOME UNDER THE HEAD CAPITAL GAINS.AFTER CONSIDERING THE SUBMISSIONS FIL ED BY THE ASSESSEE IN RESPONSE TO HIS DIRECTIONS, AO HELD THAT ASSESSEE HAD RECEIVED RS. 75 LACS FROM RELEASE OF RIGHTS IN FAVOUR OF CONTRACTORS,THAT SOCIETY HAD ENTERED INTO AN AGREEMENT WITH THE DEVE LOPER. HE DIRECTED THE SOCIETY TO FURNISH THE BASIS OF DETERMINATION OF COST OF ACQUISITION.ASSES SEE SUBMITTED THAT THE SOCIETY PERMITTED THE CONTRACTOR TO GET ADDITIONAL 0.25 FSI AND PURCHASE OF TRANSFERABLE DEVELOPMENT RIGHTS (TDR) FOR CONSTRUCTION OF EXTRA FLATS.AS PER THE AO,IN ABSENC E OF ANY DETAILS OF HOW MANY FLATS WERE CONSTRUCTED AGAINST THE FSI AND WHAT WAS THE COST L IABILITY THE SOCIETY HAD TO BEAR TOWARDS IT COST OF ACQUISITION COULD NOT BE APPORTIONED,THAT MERE G RANTING OF PERMISSION TO ALLOW USE OF TDR DOES NOT INVOLVE PAYMENT OF ANY AMOUNT,THAT MEMBER OF SOCIETY HAD BEEN GIVEN FLATS/BUNGLOWS,THAT MEMBERS HAD GIVEN ONLY PERMISSI ON FOR ALLOWING USES OF EXTRA FSI AND TDR, THAT THE ASSESSEE DID NOT BEAR ANY COST TOWARDS TDR /FSI. REFERRING TO THE AGREEMENT ENTERED IN TO BY THE ASSESSEE-SOCIETY AND THE CONTRACTOR DATED 26 .06.1994,HE FURTHER HELD THAT THERE IS NO COST BORNE BY THE ASSESSEE TOWARDS ADDITIONAL FSI AND PE RMISSION FOR USE OF THE TDR,THAT IT HAD NOT 3 ITA NOS.3257 & 3856 MUM 2011 & C.O. 164 MUM 2011 M/S. MADHUBAN CHS LTD. FURNISHED THE BASIS FOR ARRIVING AT FIGURE OF 31.35 LAKSH AS COST OF ACQUISITION, THAT FIVE PROMOTER MEMBERS WERE ALLOTTED FLATS BY THE DEVELOPER AS PER THE CONSENT TERMS DATED 08. 10.2001.HE TOOK COST OF ACQUISITION AT RS.ZERO.DETERMINING THE SALE CONSIDERATION HE STATED THAT THE ASSESSEE HAD RECEIVED RS.75 LAKHS,THAT THE RECEIPT OF SUM WAS TE RMED COMPENSATION FOR DELAY IN EXECUTING PROJECT BY THE ASSESSEE,THAT THE MOU ENTERED INTO B Y THE ASSESSEE DID NOT TALK ABOUT PAYMENT OF COMPENSATION ON ACCOUNT OF DELAY,THAT THE ASSESSEE WAS CALLING THE SUM RECEIVED PENALTY/GESTURE OF GOODWILL,THAT BOTH THE TERMS WERE CONTRADICTORY, THAT IT HAD RECEIVED RS.75 LAKHS TOWARDS SURRENDER OF RIGHTS OF.0.25 FSI AND USE OF ADDITION AL TDR,THAT IT WAS WRONGLY CLAIMING SAID SUM AS CAPITAL RECEIPT,THAT AMOUNT IN QUESTION WAS SALE CONSIDERATION ON SURRENDER OF FLATS,PERMISSION TO USE ADDITIONAL FSI AND TDR. 3. ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY(FAA).IT WAS CONTENTED BEFORE HIM THAT AMOUNT RECEIVED BY THE ASSESSEE,I.E.RS.75 LAKHS,WAS A CAPITAL RECEIPT AND SHOULD NOT HAVE BEEN TAXED.AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDER,SHE HELD THAT BY DEVELOPMENT AGREEMENT DATED 26.06.1994 THE ASSESSEE HAD ENTERED IN TO A CONTRACT TO SELL .075 FSI AVAILABLE TO IT,THAT LATER ON AVAILABLE FS I WAS 1,THAT IN LIEU OF THAT THE CONTRACTOR WAS ENTITLED TO CONSTRUCT 102 RESIDENTIAL FLATS AND GIV E RS.50 LAKHS AND 51 RESIDENTIAL FLATS TO THE EXISTING SOCIETY MEMBERS FREE,THAT AFTER RECEIVING ADDITIONAL FSI OF .025 CONTRACTOR MADE PAYMENT OF RS. 75 LAKHS TO THE ASSESSEE,THAT 0.25 FSI ALONG WITH RIGHT TO UTILISE TDR WAS SOLD AND AMOUNT WAS RECEIVED COMPLETELY IN AY.2007-08,THAT THE SOCI ETY GOT 51 FLATS AND RS.50 LAKHS IN LIEU OF ITS RIGHTS TO UTILISE 0.75 FSI ITSELF INITIALLY AVAILAB LE WHICH IN TURN RAISED TO 1 FSI LATER AND WAS SOLD BY IT,THAT AMOUNT IN QUESTION AND 51 FLATS RECEIVED BY THE ASSESSEE WERE CAPITAL ASSETS,THAT ASSESSEE HAD TO PAY CAPITAL GAIN TAX ON IT.HE REJECTED THE P LEA OF THE ASSESSEE THAT CAPITAL GAIN WAS NOT ATTRACTED IN THE CASE OF A SOCIETY BECAUSE IT WAS A CAPITAL RECEIPT.WITH REGARD TO THE ALTERNATE PLEA OF THE ASSESSEE ABOUT TAKING COST OF ACQUISITION AT RS.142.32 LAKHS,SHE HELD THAT THE INITIAL 0.75 FSI AVAILABLE ALONG WITH ADDITIONAL 0.25 FSI TOGETHER,W AS FOR 65,650 PER SQ.FT.,AND SAME WAS ACQUIRED FOR RS. 142.32 LACS,THAT THE CONVEYANCE FOR THE SAI D LAND WAS MADE IN THE NAME OF ASSESSEE VIDE CONVEYANCE DEED DATED 08.04.2003 (F.Y. 2003-04),THA T THE ASSET CAME INTO EXISTENCE IN AY. 2004- 05,THAT COST INFLATION INDEX HAD TO BE TAKEN FOR TH E YEAR 2004-05 AND NOT OF 1990 AS HAS BEEN CLAIMED BY THE ASSESSEE,THAT BY MOU DATED 27.07.2005 THE ASSESSEE HAD TO RECEIVE RS. 75 LACS, THAT OUT OF THAT RS. 50 LACS WERE RECEIVED BY THE A SSESSEE IN ASSESSMENT YEAR 2006-07 AND BALANCE RS. 25 LAC IN AY.2007-08,THAT THE TOTAL SALE CONSID ERATION OF 0.25 EXTRA FSI AND RIGHT TO UTILISE TDR WAS RS. 75 LAKHS AS THE ADDITIONAL 3 FLATS WITH PURCHASE BACK PRICE OF RS. 31.35 LACS ALONG WITH THE RIGHT TO CHARGE PENALTY WAS SURRENDERED FO R THIS AMOUNT,THAT THE TOTAL COST OF ACQUISITION OF RS.142.32 LAKHS HAD TO BE APPROPRIATED FOR 0.25 FSI I.E. 16400 SQ.FT. IN F.Y. 2003-04 RELEVANT TO AY.2004-05,THAT THE GAIN WAS SHORT TERM AS TRANS ACTION WAS COMPLETED WITHIN A PERIOD OF 36 MONTHS FROM DATE OF PURCHASE I.E. 08.04.2003.SHE WO RKED THE CAPITAL GAIN AT RS.35.14 LAKHS.HE FURTHER HELD THAT THE SHORT TERM CAPITAL GAIN(STCG) CHARGEABLE IN THE CASE WAS RS.35, 14, 697/- AS AGAINST LONG TERM CAPITAL LOSS(LTCG)CLAIMED BY T HE ASSESSEE AT RS.13,05,544/-,THAT PLEA TAKEN BY THE ASSESSEE THAT THE RECEIPT OF RS. 75 LA KHS WAS NOT TAXABLE BEING EXEMPT FROM TAX ON THE GROUND OF PRINCIPLE OF MUTUALITY WAS INFRUCTUOU S,THAT THE ASSESSEE HAD THE RIGHT TO BE A CONSENTING PARTY FOR THE BALANCE FLATS 51 FLATS CON STRUCTED BY THE CONTRACTOR WHO PURCHASED FSI FROM THE SOCIETY,THAT AS PER THE TERMS THE FLAT PUR CHASER HAD TO BE MADE MEMBER IN THE SOCIETY CONSEQUENT TO PURCHASE OF A FLAT FROM CONTRACTOR,TH AT THE AMOUNT OF RS. 75 LAKHS RECEIVED FROM THE FLAT PURCHASERS BY THE CONTRACTOR AS PREMIUM AGGREG ATING TO RS.75 LAKHS COULD NOT BE SAID AS REIMBURSEMENT MADE BY SOCIETY MEMBER AGAINST THE PA YMENT MADE BY THE CONTRACTOR AT RS.75 LAKHS AS GOODWILL GESTURE CUM COMPENSATION IN THE N AME OF CONTRIBUTION TOWARDS CORPUS FUND OF THE SOCIETY,THAT THE PAYMENTS WERE NOT MADE BY THE MEMBERS OF THE SOCIETY TO THE SOCIETY CORPUS BUT BY THE FLAT PURCHASERS TO THE CONTRACTOR,THAT I T WAS INCIDENTAL THAT THEY HAD TO BE MADE MEMBERS OF THE SOCIETY SUBSEQUENTLY,THAT IT WAS NOT IN THE NATURE OF THE AMOUNT CHARGED AS TRANSFER FEE BY THE SOCIETY FROM ITS MEMBERS. 4. BEFORE US,DEPARTMENTAL REPRESENTATIVE(DR) SUBMITTED THAT ASSESSEE HAD RECEIVED RS. 75 LACS, 4 ITA NOS.3257 & 3856 MUM 2011 & C.O. 164 MUM 2011 M/S. MADHUBAN CHS LTD. THAT THE MOU REFERRED TO BY THE ASSESSEE DID NOT TA LK ANYTHING ABOUT THE PAYMENT TOWARDS THE DELAY OF PROJECT,THAT ASSESSEE HAD MADE TWO DIFFERE NT CLAIMS ABOUT THE AMOUNT RECEIVED,THAT RS. 75 LACS WERE RECEIVED BY THE ASSESSEE SOCIETY TOWARDS SURRENDER OF RIGHTS OF 0.25 FSI AND USE OF ADDITIONAL TDR,THAT IT WAS TRYING TO TAKE BENEFIT O F GETTING ITSELF TAX UNDER THE HEAD CAPITAL RECEIPT, THAT SUM OF RS. 75 LACS WAS SALE CONSIDER ATION RECEIVED BY THE ASSESSEE, THAT AO HAD RIGHTLY TAXED THE SAID SUM AS LTCG. AUTHORISED REPRESENTATIVE(AR) SUBMITTED THAT PLOT O F LAND WAS PURCHASED IN 1983 BY MAKING A TOKEN PAYMENT OF RS.1.5 LAKHS TO RANBIR RAJ KAPOOR, THAT COST OF LAND WAS 23.56 LAKHS AND AREA OF THE PLOT WAS 4898 SQ.YARDS,THAT WIFE OF RAJ KAPOOR INHERITED THE RIGHTS OF THE PROPERTY IN 1988,IN FEB.1990 A DEVELOPMENT AGREEMENT WAS SIGNED BETWEEN THE PROPOSED SOCIETY AND WIFE OF RAJ KAPOOR,THAT IN MARCH 1994 LOCAL AUTHORITIES ISSUED COMMENCEMENT CERTIFICATE FOR DEVELOPMENT OF PLOT,THAT ON 26.06.1994 AN AGREEMENT WAS SIGNED BY THE ASSESSEE-SOCIETY AND THE DEVELOPER,THAT IN AUG. 1994 POSSESSION OF LAND WAS HANDED OVER TO THE SOCIETY,THAT DISPUTE AROSE BETWEEN THE DEVELOPER AND THE ASSESSEE AND IT CONTINUED TILL YE AR 2001,THAT IN OCT,2001 CONSENT TERMS WERE EXECUTED BETWEEN VARIOUS PARTIES IN CITY CIVIL COUR T,THAT IN YEAR 2004 DEED OF CONVEYANCE WAS SIGNED IN FAVOUR OF THE ASSESSEE,THAT ON 21.07.2005 MOU WAS SIGNED BETWEEN THE ASSESSEE AND THE DEVELOPER,THAT BECAUSE OF CHANGE IN RULES SOCIE TY GOT FSI OF 0.25 INITIALLY, THAT LATER ON FSI WAS INCREASED TO 1,THAT TDR WAS ALSO AVAILABLE TO T HE ASSESSEE, THAT FSI AND TDR HAD NO COST,THAT SAME WERE NOT TAXABLE,THAT DEVELOPER HAD PAID COMPE NSATION TO THE SOCIETY,THAT CONSIDERATION RECEIVED ON GRANT/SURRENDER OF RIGHT TO USE OF ADDI TIONAL FSI AND TDR WAS CAPITAL RECEIPT AND WAS NOT CHARGEABLE UNDER THE HEAD CAPITAL GAINS,THAT FO R ADDITIONAL TDR/FSI THE ASSESSEE HAD NOT INCURRED ANY COST,I.E.COST WAS NIL,THAT AO HAD TAKE N COST AS NIL,THAT FAA HAD DISTURBED THE COST OF ACQUISITION.AR REFERRED TO PAGE NO. 193 TO 228 OF T HE PAPER BOOK.HE RELIED UPON THE CASES OF SHRI RAM KUMAR MALHOTRA(2010TIOL512 ITAT-MUM), OM SHANTI CO-OP HSG SOCIETY(ITA/2550/ MUM/2008),MAHESHWAR PRAKASH -2CO. OP.HSG SOCIETY (1 18ITD223),NEW SHAILAJA CHS LTD. (ITA/512/MUM/2007-BCAJ AND LAND BREEZE CO-OP.HOUSIN G SOCIETY LTD.(28TAXMANN.COM) ALTERNATIVELY,IT WAS ARGUED THAT INDEXATION OF THE CAPITAL GAINS SHOULD BE TAKEN FROM THE YEAR 1990. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT RAJ KAPOOR AND THE ASSESSEE-SOCIETY,FORMED BY THE BARC AND DAE SCIENTIST,HAD ENTERED INTO AN AGREEMENT ON 04.10.1983 TO GIVE A PLOT OF LAND TO P ROPOSED SOCIETY,THAT IN JUNE 1988 RAJ KAPOOR PASSED AWAY AND HIS WIFE INHERITED THE RIGHTS TO TH E PROPERTY,THAT IN FEBRUARY 1990 AND AGREEMENT WAS SIGNED BETWEEN THE PROPOSED SOCIETY AND KRISHNA KAPOOR,WIFE OF LATE RAJ KAPOOR,THAT IN 1994 SOCIETY AND THE DEVELOPER SIGNED AN AGREEMENT, THAT THERE WAS DISPUTE BETWEEN THE SOCIETY AND THE DEVELOPER WHICH WAS RESOLVED IN THE YEAR 20 01,THAT DUE TO CHANGE IN RULES ASSESSEE WAS GRANTED FSI OF 0.25 INITIALLY AND SAME WAS FINALLY INCREASED TO FSI OF 1,THAT THE ASSESSEE WAS PAID RS. 75 LAKHS BY THE DEVELOPER FOR SURRENDER OF ADDI TIONAL FSI OF 0.25,THAT THE ASSESSEE HAD PAID TAXES ON IT AND HAD FILED RETURN REFLECTING THE SAM E AS CAPITAL GAIN,LATER ON IT WAS ARGUED THAT THE RECEIPT HAD TO TAKEN AS CAPITAL RECEIPT AND NOT TAX ABLE,THAT THE AO REJECTED THE CLAIM OF THE ASSESSEE,THAT IN APPELLATE PROCEEDINGS FAA HELD THA T THE COST OF ACQUISITION OF THE ADDITIONAL 0.25 FSI HAD TO BE TAKEN AT RS. 35,55,290/- AS AGAINST THE ESTIMATED COST OF ACQUISITION AT NIL BY THE AO,THAT FAA HELD THAT RECEIPT WAS TO ASSESSED AS ST CG.WE HAVE GONE THROUGH THE CASES RELIED UPON BY THE AR.WE FIND THAT ISSUE OF VALUATION OF COST OF ACQUISITION OF FSI AND TDR HAS BEEN DEALT WITH BY VARIOUS BENCHES OF TRIBUNAL.IT HAS B EEN HELD IN THE CASES OF OM SHANTI CO-OP HSG SOCIETY(SUPRA), MAHESHWAR PRAKASH CO. OP. HSG SOCIE TY(SUPRA) & LAND BREEZE CO-OP.HOUSING SOCIETY LTD.(SUPRA).WE FIND THAT IN THE CASE OF LAN D BREEZE CO-OP.HOUSING SOCIETY LTD.(SUPRA)IT HAS BEEN HELD THAT TDR AVAILABLE UNDER DEVELOPMENT CONTROL REGULATION OF GREATER MUMBAI,1991 AMOUNTS TO TRANSFER OF A CAPITAL ASSETS AND THAT SI NCE NO COST OF ACQUISITION CAN BE ASCRIBED TO SUCH A RIGHT COMPUTATIONAL PROVISIONS OF SECTION 48 CANN OT BE APPLIED,THAT SUCH TRANSFER CANNOT BE SUBJECTED TO TAX UNDER CAPITAL GAIN.SIMILARLY,IN TH E CASE OF NEW SHAILAJA CHS LTD.(SUPRA)IT HAS BEEN HELD THAT NO CAPITAL GAIN CAN BE CHARGED ON TR ANSFER OF ADDITIONAL FSI FOR SALE 5 ITA NOS.3257 & 3856 MUM 2011 & C.O. 164 MUM 2011 M/S. MADHUBAN CHS LTD. CONSIDERATION,AS IT HAD NO COST OF ACQUISITION.RESP ECTFULLY,FOLLOWING THE DECISIONS REFERRED AT PARA -GRAPH NO.4 WE ARE OF THE OPINION THAT IN ABSENCE O F ANY EVIDENCE THAT THE ASSESSEE-SOCIETY HAD PAID/CONTRIBUTED ANY SUM TOWARDS PURCHASE OF TDR/FS I NO AMOUNT COULD BE ATTRIBUTED TOWARDS COST OF ACQUISITION AND THAT MERE GRANTING PERMISSI ON TO ALLOW THE USE OF FSI/ TDR DID NOT INVOLVE PAYMENT OF ANY AMOUNT.THEREFORE,REVERSING THE ORDER OF THE FAA,WE DECIDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE AO AND THE EFFECTIVE GROUND O F APPEAL IN FAVOUR OF THE ASSESSEE.GROUNDS OF CROSS OBJECTION AND THE ADDITIONAL GROUNDS ARE ALLO WED FOR STATISTICAL PURPOSES,AS SAME ARE ACADEMIC IN NATURE AFTER OUR DECISION TAKEN WITH RE GARD TO THE EFFECTIVE GROUNDS,RAISED BY THE AO AND THE ASSESSEE. AS A RESULT APPEAL FILED BY THE AO STANDS DISMISSED ,WHEREAS APPEAL OF THE ASSESSEE STANDS ALLOWE.CO FILED BY THE ASSESSEE IS ALLOWED FOR STAT ISTICAL PURPOSES. 1+2 '3+ , 5 6 7+ ) + 89, ; '3+ ) < ) + 89.'3+ &'( 6>) ?@ AB < ; + 89. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH FEBRUARY, 2014. 0 ) -.# C 26 1, , 2014 . ) / . SD/- SD/- ( . . . B.R.MITTAL) ( ! ! ! ! / RAJENDRA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, ;' /DATE: 26.02.2014 SK 0 0 0 0 ) )) ) &+D &+D &+D &+D E D#+ E D#+ E D#+ E D#+ / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / $% 2. RESPONDENT / &'$% 3. THE CONCERNED CIT(A)/ F G , 4. THE CONCERNED CIT / F G 5. DR B BENCH, ITAT, MUMBAI / DH/ &+' , . . . 6. GUARD FILE/ / 1 . 'D+ &+ //TRUE COPY// 0' / BY ORDER, ? / 8 DY./ASST. REGISTRAR , /ITAT, MUMBAI.