ITO 22(1)-4, NAVI MUMBAI V. MAYUR CHS LTD, MUMBAI

ITA 1329/MUM/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3553 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2003-2004
• Appeal Filed On: 18-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S SRIVASTAVA
• Keywords: Capital asset; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J : MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B.RAMAKOTAIAH, ACCOUNTANT MEMBER ITA. NO.1329/MUM/2010 ASSESSMENT YEAR 2003-2004 ITO 22 (1)-4 MUMBAI 400 705 VS. M/S. MAYUR JYOTI CHS LTD. MUMBAI 400 077 PAN AABTM8753F (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI R.S. SRIVASTAVA, CIT/DR FOR RESPONDENT : SHRI KIRIT SANGHAVI ORDER PER D. MANMOHAN, V.P. 1. THIS APPEAL IS FILED AT THE INSTANCE OF THE REV ENUE AND IT PERTAINS TO THE ASSESSMENT YEAR 2003-2004. FOLLOWIN G GROUNDS WERE URGED BY THE REVENUE. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.49,66,380/- MADE BY THE ASSESSING OFFICER BEING AMOUNT RECEIVED BY THE ASSESSEE FROM SALE/TRANSFER OF ADDITIONAL FSI AS LONG TERM CAPITA L GAIN. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN HOLDING THAT IF THE ASSESSEE HAD NOT INCURRED ANY COST OF ACQUISITION ON A CAPITAL ASSET AND SUCH CAPITAL ASSET DOES NOT FALL IN THE CATEGORY OF THE CAPITAL ASSETS SPECIFIED IN SECTION 55(2) THEN THE JUDGMENT OF THE HONBLE SUPREME COURT IN CIT VS. CC.SRINIVAS SHETTY (1981) 128 ITR 294 (SC) SHALL APPLY AND NO CAPITAL GAIN SHALL BE CHARGED. 2 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN HOLDING THAT THE ASSESSEE HAD BECOME ENTITLED TO FSI FREE OF COS T WHEN IN ACTUALLY, THE FSI IN THE FORM OF TDR WAS PURCHASED THROUGH DEVELOPER, M/S. SKY RISE DEVELOPERS ON BEHALF OF THE ASSESSEE. 2. FACTS IN SHORT ARE THAT THE ASSESSING OFFICER H AD CONSIDERED AN AMOUNT OF RS.49,66,875/-, RECEIVED BY THE SOCIETY IN RESPECT OF SALE/TRANSFER OF ADDITIONAL BALANCE FSI AVAILABLE BY IT, AS AN AMOUNT TAXABLE UNDER THE HEAD LONG TERM CAPITAL G AINS. SINCE THE ASSESSEE DID NOT DECLARE THIS AMOUNT AS ITS INCOME, THE ASSESSING OFFICER PROCEEDED TO MAKE AN ADDITION. AGGRIEVED, A SSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) AND BY PLACING RELIANC E UPON VARIOUS DECISIONS OF THE ITAT, MUMBAI BENCHES, IT WAS CONTE NDED THAT THE RIGHT ACQUIRED BY THE ASSESSEE DO NOT FALL WITHIN T HE AMBIT OF SECTION 45 OF THE ACT AND HENCE, THE SALE/TRANSFER OF ADDIT IONAL FSI AVAILABLE TO IT DO NOT GIVE RISE TO LONG TERM CAPITAL GAINS. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE, AND IN THE LIGHT OF DECI SION OF THE ITAT, MUMBAI BENCHES AS WELL AS THE DECISION OF THE APEX COURT, THE LEARNED CIT (A) ACCEPTED THE PLEA OF THE ASSESSEE A ND THUS, THE REVENUE IS IN APPEAL BEFORE US. 3. FACTS IN SHORT ARE THAT THE ASSESSEE, A CO-OPER ATIVE HOUSING SOCIETY, OWNED LAND AND BUILDING IN GHATKOP AR SINCE ABOUT 1960 AND THE SHAREHOLDERS ENJOYED THE RIGHT OF OCCU PATION OF APARTMENTS ALLOTTED TO THEM. WHEN THE SOCIETY BECAM E ELIGIBLE FOR PUTTING UP ADDITIONAL CONSTRUCTION IN ITS EXISTING STRUCTURE THE SAME WAS GIVEN TO A DEVELOPER AND IN RETURN SOCIETY WAS TO RECEIVE AN AGREED SUM AS CONSIDERATION FOR PERMITTING THE DEVE LOPERS TO PUT-UP ADDITIONAL CONSTRUCTION. THE AMOUNTS RECEIVED/RECEI VABLE BY THE ASSESSEE-SOCIETY FROM THE DEVELOPERS WAS SOUGHT TO BE BROUGHT TO TAX AS LONG TERM CAPITAL GAIN WHEREAS, THE CASE OF THE ASSESSEE WAS THAT THE RIGHT ACCRUED TO THE ASSESSEE-SOCIETY WITH REGA RD TO TDR DO NOT 3 HAVE ANY COST OF ACQUISITION AND THUS THE PROVISION S OF THE CAPITAL GAINS TAX ACT CANNOT BE APPLIED IN WHICH EVENT GAIN S ARISING IN RESPECT THEREOF ARE NOT TAXABLE. 4. LEARNED DR COULD NOT PLACE ANY CONTRARY DECISIO N ON RECORD TO SUPPORT ITS PLEA. 5. ON THE OTHER HAND, LEARNED COUNSEL, APPEARING O N BEHALF OF THE ASSESSEE, STRONGLY RELIED UPON THE ORDER OF THE LEARNED CIT (A). 6. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE ORDER OF THE LEARNED CIT (A) DOES NOT SUFFER FROM ANY INFIRMITY, FOR THE DETAILED REASONS GIVEN IN HIS OR DER. WE, THEREFORE, AFFIRM THE ORDER OF THE LEARNED CIT (A) AND DISMISS THE APPEAL FILED BY THE REVENUE. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS THE 22 ND DAY OF DECEMBER, 2010. SD/- SD/- (B.RAMAKOTAIAH) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATE 22 ND DECEMBER, 2010 VBP/- COPY TO 1. ITO 22 (1)-4, TOWER NO.6, ROOM NO.6, 4 TH FLOOR, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI 400 705. 2. M/S. MAYUR JYOTI CHS LTD. PLOT NO. 191, R.B. MEH TA MARG, BEHIND ODEON CINEMA, GHATKOPAR (E), MUMBAI 400 077 P AN AABTM8753F 3. CIT (A)-33, MUMBAI. 4. CIT-22, MUMBAI. 5. DR J BENCH 6. GUARD FILE. (TRUE COPY) BY ORDER ASST. REGISTRAR, ITAT, MUMBAI BENCHES MUMBAI.