Appeal Details
Counselvise Citation
[2015] 134 COUNSELVISE.COM (IT) 0865 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 11 month(s) 3 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
30-11-2015
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
A
Assessment Year
2007-2008
Appeal Filed On
27-12-2013
Judgement Text
] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , !, # $ BEFORE SHRI VIKAS AWASTHY, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NO.2230/PN/2013 ASSESSMENT YEAR : 2007-08 VANAZ ENGINEERS LIMITED, 85/1, PAUD ROAD, PUNE 411 038. PAN : AAACV6873B . APPELLANT VS. THE ADDL. COMMISSIONER OF INCOME TAX, RANGE 7, PUNE. . RESPONDENT / APPELLANT BY : SHRI RAJENDRA AGIWAL / RESPONDENT BY : SHRI DHEERAJ KUMAR JAIN / DATE OF HEARING : 19.11.2015 / DATE OF PRONOUNCEMENT: 30.11.2015 % / ORDER PER PRADIP KUMAR KEDIA, AM : THE CAPTIONED APPEAL FILED BY THE ASSESSEE IS AGAIN ST THE ORDER OF CIT(A)-III, PUNE DATED 07.10.2013 RELATING TO ASSES SMENT YEAR 2007-08 PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (I N SHORT THE ACT). 2. IN THIS APPEAL, THE ASSESSEE HAS TAKEN THE FOLLO WING GROUNDS OF APPEAL :- BASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, VANAZ ENGINEERS LIMITED (THE APPELLANT), RESPECTFULLY CRAVES LEAVE TO PREFER AN APPEAL AGAINST THE ORDER DATED 7 TH OCTOBER, 2013 PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) III [CIT(A)] (RECEIVED BY THE APPELLANT ON 6 TH NOVEMBER, 2013) UNDER SECTION 250 OF THE INCOME-TAX ACT, 1961 (ACT) ON THE FOLLOWING G ROUNDS WHICH ARE INDEPENDENT AND WITHOUT PREJUDICE TO EACH OTHER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A) HAS ERRED: DISALLOWANCE OF INDEXED COST OF ACQUISITION OF RS.1 6,20,318/- WHILE COMPUTING CAPITAL GAIN: 2 ITA NO.2230/PN/2013 1. IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSES SING OFFICER (AO') BY NON- GRANTING COST OF ACQUISITION OF RS.3,12,200/- OF TD R/ FSI RIGHTS (INDEXED COST OF ACQUISITION OF RS.16,20,318/-). 2. IN NOT APPRECIATING THE FACT THAT THE COST OF AC QUISITION OF DEVELOPMENT RIGHTS (FSI/ TDR) WAS BASED ON THE VALUERS REPORT OF PLOT AS ON 1.4.1981, AS THE PLOT WAS IN EXISTENCE PRIOR TO 1.4.1981. 3. IN NOT APPRECIATING THAT THE APPELLANT, ON TOTAL ITY BASIS, HAS RECEIVED THE PURCHASE CONSIDERATION OF RS.1,18,43,160/- WHICH IS INCLUSIVE CONSIDERATION FOR TRANSFER OF FSI/ TDR. 4. IN NOT APPRECIATING THE ARGUMENT TAKEN BY THE AP PELLANT THAT IF COST OF ACQUISITION IS NOT ASCERTAINABLE THEN IN SUCH SCENA RIO CAPITAL GAIN IS NOT APPLICABLE (REFER THE APEX COURT DECISION IN THE CA SE OF B.C. SRINIVASA SHETTY 128 ITR 294). ERRONEOUS LEVY OF INTEREST UNDER SECTION 234B: 5. IN LEVYING INTEREST UNDER SECTION 234B OF THE A CT. THE APPELLANT PRAYS THAT THE RETURNED INCOME BE RES TORED UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS PER THE LAW. ANY CONSEQUENTIAL RELIEF, TO WHICH THE APPELLANT MAY BE ENTITLED UNDER THE LAW IN PURSUANC E OF THE AFORESAID GROUNDS OF APPEAL, OR OTHERWISE, MAY THUS BE GRANTED. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, VARY, OMI T, SUBSTITUTE OR AMEND THE ABOVE GROUNDS OF APPEAL, AT ANY TIME ON OR BEFORE THE TIM E OF HEARING OF THE APPEAL, SO AS TO ENABLE THE HONBLE TRIBUNAL TO DECIDE THIS APPEA L ACCORDING TO LAW. 3. THE SUBSTANTIVE ISSUE IN CONTROVERSY IS ELIGIBIL ITY OF DEDUCTION OF ALLEGED COST OF ACQUISITION OF FSI FROM THE SALE OF DEVELOP MENT RIGHTS IN PARCEL OF LAND FOR THE PURPOSES OF DETERMINATION OF LONG TERM CAPI TAL GAIN AS CLAIMED BY THE ASSESSEE. 4. THE RELEVANT FACTS CONCERNING THE ISSUE ARE AS F OLLOWS. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF LPG VAL VES, REGULATORS, POWER GENERATION EQUIPMENTS, ETC.. DURING THE RELEVANT A SSESSMENT YEAR 2007-08, THE ASSESSEE DECLARED CAPITAL GAINS IN RESPECT OF DEVEL OPMENT AGREEMENT FOR ITS LAND AT KOTHRUD, PUNE. THE ASSESSEE IS STATED TO B E SEIZED AND POSSESSED OF LARGE PARCEL OF LAND AT SURVEY NO.85/1, PAUD ROAD, KOTHRUD, PUNE. OUT OF THE AFORESAID LARGE PARCEL OF LAND, THE ASSESSEE HAS, INTER-ALIA , ENTERED INTO A DEVELOPMENT AGREEMENT FOR LAND ADMEASURING 3337 SQ. MTRS.. ON SALE OF DEVELOPMENT RIGHTS OF THE AFORESAID 3337 SQ.MTRS. O F PLOT OF LAND TO M/S HOME DEVELOPERS, THE ASSESSEE HAS RECEIVED ACTUAL CONSID ERATION OF RS.1,18,43,160/- AS PER THE AFORESAID DEVELOPMENT AGREEMENT. HOWEVE R, THE CONSIDERATION AS PER STAMP DUTY VALUATION IN TERMS OF SECTION 50C OF THE ACT WAS DETERMINED AT 3 ITA NO.2230/PN/2013 RS.1,89,68,056/- WHICH WAS ADOPTED AS DEEMED CONSID ERATION FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS. SOME FSI WAS STAT ED TO BE AVAILABLE TO THE ASSESSEE AGAINST THE ACQUISITION OF ANOTHER PARCEL OF LAND OF THE ASSESSEE ADMEASURING 892 SQ.MTRS. BY PUNE MUNICIPAL CORPORAT ION (PMC) OUT OF ITS LARGE LAND HOLDINGS AT PAUD ROAD ACQUIRED FOR ROAD WIDENING PURPOSES. THUS, AS PER ASSESSEE, THE COST OF FSI RANKED PARI PASSU WITH THE CORRESPONDING LAND ACQUIRED BY PMC. THE ASSESSEE IS STATED TO HAVE VE STED OWNERSHIP IN THE LAND SO ACQUIRED BY PMC MUCH EARLIER TO 1981. ACCORDING LY, THE COST OF FSI PURPORTEDLY RECEIVABLE IN LIEU OF ACQUISITION WAS D ETERMINED BY THE ASSESSEE AT RS.350 PER SQ.MTRS. AS PER VALUATION REPORT FROM TH E APPROVED VALUER AS ON 01.04.1981. THE FAIR VALUE OF LAND AS ON 01.04.198 1 WAS TAKEN AS THE COST OF FSI ENTITLEMENT. THE INDEXATION BENEFIT WAS ALSO A PPLIED ON THE FAIR VALUE OF LAND SO ACQUIRED AS ON 01.04.1981. ACCORDINGLY THE TOTAL COST TOGETHER WITH INDEXATION WAS COMPUTED BY THE ASSESSEE AT RS.16,20 ,318/- WHICH WAS TAKEN AS THE COST OF THE FSI PURPORTEDLY TRANSFERRED TO M/S HOME DEVELOPERS ALONG WITH DEVELOPMENT RIGHTS AS PER DEVELOPMENT AGREEMENT. T HE ASSESSING OFFICER DENIED THE DEDUCTION OF AFORESAID COST OF ACQUISITI ON OF FSI RS.16,20,318/- WHILE ASSESSING THE CAPITAL GAINS ON TRANSFER OF DE VELOPMENT RIGHTS. THE ASSESSING OFFICER OBSERVED THAT BOOKS OF ACCOUNT DO NOT INDICATE ANY VALUE ATTRIBUTABLE TO THE COST OF THE FSI/TDR RIGHTS. IT IS ONLY IN THE CURRENT YEAR THAT COST AS PER BOOKS HAS BEEN REDUCED BY RS.2,046/-. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE ASSESSEE HAS NEVER SHOWN THE VALUE OF IMPUGNED TDR RIGHTS IN THE BOOKS OF ACCOUNT AT ANY NOTIONAL VALU E OR ANY ALLOCATED VALUE OF THE COST OF LAND. THE ASSESSING OFFICER, INTER-ALIA , OBSERVED THAT THE COST OF ACQUISITION CLAIMED BY THE ASSESSEE IS NOT PERMISSI BLE SINCE : I. THERE IS NO EVIDENCE THAT TDR RIGHTS WERE SHOWN AS ASSETS AND ANY VALUE WAS ASSIGNED TO IT. II. THE YEAR OF ACQUISITION FOR ROAD AND DETAILS WE RE NOT MADE AVAILABLE. THUS, INDEXATION ALSO CANNOT BE VERIFIED. III. NO EVIDENCE WAS AVAILABLE TO VERIFY THAT THE L AND COST CONSIDERED FOR SALE AND LEASE TRANSACTIONS OVER THE YEARS ACCOUNTED FOR ANY REDUCTION IN LAND. IV. ACCOUNTING ENTRY OF REDUCTION OF RS.2046/- IN L AND MADE ONLY THIS YEAR HAS BEEN MERELY CREATED TO CLAIM DEDUCTION FROM CAPITAL GAINS. 4 ITA NO.2230/PN/2013 THUS, THE LONG TERM CAPITAL GAIN WAS INCREASED BY R S.16,20,318/-. 5. THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 6. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE VEHEMENTLY SUBMITTED THAT THE ASSESSEE OWNS LARGE PARCEL OF LA ND AT PAUD ROAD, KOTHRUD, PUNE. HE ADVERTED OUR ATTENTION TO A LETTER DATED 04 TH DECEMBER, 1999 ISSUED BY THE PMC (PAGE NO.68 72 OF THE PAPER BOOK) AND SUBMITTED THAT FOR THE PURPOSES OF ROAD WIDENING AT PAUD ROAD, MUNICIPAL C ORPORATION HAS ACQUIRED LAND ADMEASURING 892 SQ.MTRS. (APPROX) BELONGING TO THE ASSESSEE. THE POSSESSION OF THE AFORESAID LAND WAS HANDED-OVER TO THE MUNICIPAL CORPORATION ON 03 RD MAY, 1999. IN CONSIDERATION THEREOF, THE ASSESSEE IS ENTITLED TO DEMAND THE ADDITIONAL FSI OR TDR AS PER PRESCRIBED RULES A ND THE ASSESSEE SHALL BE PAID COMPENSATION IN THE FORM OF SUM OF MONEY IF PM C IS NOT IN A POSITION TO SANCTION THE FSI/TDR AS NOTED IN THE AFORESAID LETT ER FROM THE MUNICIPAL CORPORATION. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE NEXT CONTENDED THAT THE AFORESAID RIGHT VESTED WITH THE ASSESSEE HAS BEEN TRANSFERRED TO M/S HOME DEVELOPERS TOGETHER WITH THE DEVELOPMEN T RIGHTS OF 3337 SQ.MTRS. AS PER DEVELOPMENT AGREEMENT DATED 21.04.2 006 (PAGE NO.13 34 OF THE PAPER BOOK). THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE, THEREAFTER POINTED OUT THAT THE LAND SO ACQUIRED BY THE MUNICIPAL CORPORATION WAS OWNED AND POSSESSED BY THE ASSESSEE SINCE 1965 I.E. MUCH PRIOR TO 01.04.1981. ACCORDINGLY, AS PER THE VALUATION REPO RT FROM THE APPROVED VALUER DATED 20 TH MARCH, 2007 (PAGE NO.35 41 OF THE PAPER BOOK), T HE FAIR VALUE OF THE LAND ACQUIRED AS ON 01.04.1981 HAS BEEN SUBSTIT UTED AS THE COST OF THE FSI SO TRANSFERRED AND INDEXATION TOWARDS INFLATION IN COST WAS CLAIMED AS PER THE PROVISIONS OF THE ACT AND THE COST OF THE FSI WAS D ETERMINED AT RS.16,20,318/- WHICH WAS CLAIMED AS DEDUCTION FROM THE SALE PROCEE DS OF THE DEVELOPMENT RIGHTS. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE NEXT SUBMITTED THAT THE SUITABLE DISCLOSURE RECOGNIZING THE RIGHTS BY W AY OF FSI/ TDR ARISING ON 5 ITA NO.2230/PN/2013 ACQUISITION OF LAND BY THE MUNICIPAL CORPORATION HA S BEEN MADE BY WAY OF NOTES IN THE FINANCIAL ACCOUNTS (PAGE NO.50 OF THE PAPER BOOK). ON ENQUIRY BY THE BENCH, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FOR THE ASSESSEE OBSERVED THAT IT IS ADMITTED POSITION THAT NO FSI/ TDR/ COMPENSATION, ETC. HAS BEEN GRANTED TO THE ASSESSEE SO FAR TILL D ATE COMMITTED IN TERMS OF LETTER FROM THE MUNICIPAL CORPORATION DATED 04 TH DECEMBER, 1999. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE IN THE L IGHT OF FACTS NOTED ABOVE STRONGLY CONTENDED THAT THERE IS NO JUSTIFICATION T O REJECT THE COST OF RIGHTS BY WAY OF FSI BEING EQUIVALENT TO FAIR VALUE OF LAND A CQUISITION AND INDEXATION THEREON TRANSFERRED AS PER DEVELOPMENT AGREEMENT FR OM THE SALE PROCEEDS OF THE DEVELOPMENT RIGHTS. HE, THEREFORE, PLEADED THA T ACTION OF THE REVENUE BE REVERSED BEING UNTENABLE ON FACT AND IN LAW. 8. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE, ON THE OTHER HAND, STRONGLY RELIED UPON THE OBSERVATIONS MADE BY THE ASSESSING OFFICER AND THE CIT(A) IN THEIR RESPECTIVE ORDERS WHILE DENYING THE CLAIM TOWARDS PURPORTED COST OF ACQUISITION. 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS, ORDERS OF THE AUTHORITIES BELOW AND MATERIAL PLACED ON RECORD. W E FIND THAT THE ASSESSEE STATES TO HAVE ACQUIRED CERTAIN RIGHTS BY WAY OF FS I/ TDR, ETC. IN LIEU OF ACQUISITION OF LAND OF ASSESSEE ADMEASURING 892 SQ. MTRS. BY PMC OUT OF ITS LARGE LAND HOLDINGS AT PAUD ROAD, KOTHRUD, PUNE AS EVIDENCED BY LETTER OF MUNICIPAL CORPORATION DATED 07.12.1999. THE ASSESS EE STATES TO HAVE TRANSFERRED THIS RIGHT IN FSI RECEIVABLE FROM MUNIC IPAL CORPORATION TO A DEVELOPER, NAMELY, M/S HOME DEVELOPERS ALONG WITH O THER PARCEL OF LAND ADMEASURING 3337 SQ.MTRS. AS PER DEVELOPMENT AGREEM ENT DATED 21.04.2006. THE LAND ADMEASURING 892 SQ.MTRS. SO ACQUIRED BY TH E MUNICIPAL CORPORATION IS STATED TO BE OWNED AND POSSESSED BY THE ASSESSEE MUCH PRIOR TO 1981. AS SUCH, THE ASSESSEE HAVING OBTAINED A VALUATION REPO RT FROM THE APPROVED VALUER TO DETERMINE THE VALUE OF LAND AS ON 01.04.1981 AND ADOPTED THE FAIR MARKET VALUE AS THE COST OF THE LAND AND IN TURN THAT OF F SI THEREON. THE FAIR VALUE WAS 6 ITA NO.2230/PN/2013 DETERMINED AT RS.3,12,200/-. AFTER APPLYING STATUT ORY COST INFLATION INDEX BENEFIT AS PER SECTION 48 OF THE ACT, THE ADJUSTED COST/ FAIR VALUE OF THE FSI WAS WORKED OUT AT RS.16,20,318/- WHICH WAS CLAIMED AS D EDUCTION FROM THE SALE CONSIDERATION RECEIVED ON TRANSFER OF DEVELOPMENT R IGHTS. 10. THE LIMITED ISSUE IN CONTROVERSY IS THE NON-ADM ISSION OF THIS DEEMED COST OF FSI BY THE REVENUE AMOUNTING TO RS.16,20,31 8/- REPRESENTING AND INCLUDING FAIR VALUE AS ON 01.04.1981 AND INDEXATIO N BENEFIT THEREON WHILE DETERMINING LONG TERM CAPITAL GAINS. 11. IN THE LIGHT OF THE AFORESAID FACTS AND SUBMISS IONS OF THE ASSESSEE, WE HAVE PERUSED THE CONTENTS OF LETTER DATED 04.12.199 9 ISSUED BY THE OFFICE OF THE PMC. AS PER THE AFORESAID LETTER, THE LAND AREA AD MEASURING 892 SQ.MTRS. (APPROX) OUT OF LARGE CHUNK OF LAND HOLDING OF THE ASSESSEE APPEARS TO HAVE BEEN ACQUIRED BY THE PMC FOR WIDENING OF ROAD. THIS LETTER COMMUNICATES TO THE ASSESSEE THAT IN LIEU OF THE ACQUISITION OF LAN D FOR ROAD WIDENING, THE ASSESSEE SHALL BE ENTITLED TO DEMAND ADDITIONAL FSI , ETC.. THE ENGLISH TRANSLATED COPY OF THE AFORESAID LETTER IS REPRODUC ED BELOW : ASSISTANT COMMISSIONER, PUNE CORPORATION OFFICE OF LAND & ESTATE LETTER REF NO.: LEO/4942 DATE: 4 DECEMBER 1999. TO, MR. S.K.KHANDEKAR, MD, VANAZ ENGINEERS LIMITED, KOT HRUD, S.NO.85/1 PAUD ROAD, PUNE - 411029 SUBJECT: REGARDING S.NO. 85/1, KOTHRUD - 120 SQ FT ROAD WIDENING AND CONSEQUENTIAL POSSESSION OF THE PLOT/ ROAD . REF: 1 NOTICE UNDER RULES/SECTION 213 OF CORPORATI ON 2 REQUEST LETTER FROM CORPORATION DATED 17 SEPTEMB ER 1996, UNDER REF NO. LEO2570 3 LETTER FROM VANAZ ENQINEERS LLD DATED 19 AUGUST 1 997 AS PER THE DEVELOPMENT PLAN DECLARED BY PUNE MUNICI PAL CORPORATION (PMC'), WITH REFERENCE TO ABOVE NOTICE/REQUEST LETTER, THE CORPO RATION HAS DEMANDED FOR ROAD WIDENING PURPOSE, PIECE AND PARCEL FROM YOUR PLOT A T S.NO 85/1 APPROX. 890.60 SQ MTR OF 120 SQ. FEET ROAD. ACCORDINGLY YOU HAVE HANDED OVER THE POSSESSION, AS SHOWN IN THE MAP, AREA OF 890.60 SQ MTR TO THE PUNE CORPORATION ON 3 MAY 1999 . 7 ITA NO.2230/PN/2013 AS MENTIONED ABOVE, THE PLOT ACQUIRED FOR ROAD WIDE NING PURPOSE & IN CONSIDERATION OF THE SAME, ON THE BASIS OF THE DOCU MENTS OF YOUR OWNERSHIP, YOU CAN DEMAND THE ADDITIONAL FSI AS PER THE PRESCRIBED RUL ES. THE SAID FSI WOULD BE SANCTIONED. AS MENTIONED ABOVE, ADDITIONAL FSI OR TDR, IF NOT P OSSIBLE TO SANCTION IN CONSIDERATION OF ABOVE ACQUISITION, YOU WOULD BE PA ID THE COMPENSATION IN THE FORM OF SUM OF MONEY. FOR ROAD WIDENING PURPOSE WHATEVER THE POSSESSION OF PLOT YOU HAVE HANDED OVER TO THE CORPORATION, YOU ARE REQUES TED TO GET IT MEASURED AFTER PAYING THE MEASUREMENT FEES TO THE RESPECTIVE OFFIC ER OF CITY LAND MEASUREMENT NO.1, PUNE. AND SUCH MEASUREMENT DETAILS MAY KINDLY BE SUBMITTED ON RECORD. SPECIAL OFFICER PUNE MUNICIPAL CORPORATION 12. WE HAVE ALSO PERUSED THE DEVELOPMENT AGREEMENT DATED 21.04.2006 ENTERED INTO WITH M/S HOME DEVELOPERS GIVING RISE T O THE CAPITAL GAINS. ON PERUSAL OF THE DEVELOPMENT AGREEMENT, WE FIND THAT THE ASSESSEE STATES TO HAVE TRANSFERRED PARCEL OF LAND ADMEASURING 3337 SQ.MTRS . AS PER RECITAL OF THE AGREEMENT, PROPERTY WHICH IS SUBJECT MATTER OF AGRE EMENT INCLUDES FSI AVAILABLE AGAINST THE ACQUISITION OF LAND AT PAUD R OAD ADMEASURING 892 SQ.MTRS. WE FIND THAT EXCEPT FOR THE REFERENCE MAD E TOWARDS IMPUGNED FSI/TDR IN THE RECITAL AS NOTED ABOVE, THERE IS NO FURTHER REFERENCE ON THIS FSI PURPORTED TO HAVE BEEN TRANSFERRED IN ANY OF THE OT HER PARAS OF THE AGREEMENT. THE SCHEDULE DESCRIBING THE PROPERTY ALSO DOES NOT MAKE ANY REFERENCE TO THE TRANSFER OF FSI ALLEGEDLY AVAILABLE. THE PAYMENT T ERMS ALSO DOES NOT SPECIFY ANY RELATIONSHIP TO THE AFORESAID FSI PURPORTED TO HAVE BEEN TRANSFERRED. FROM THE PERUSAL OF CLAUSE NO. 4 PROVIDING FOR PAYMENT T ERMS, IT IS EVIDENT THAT NO CONSIDERATION HAS BEEN EXCHANGED FOR THE PURPORTED FSI/ TDR. AS PER CLAUSE 6(A) OF THE DEVELOPMENT AGREEMENT, THE ASSESSEE DEC LARES TO HAVE TRANSFERRED THE PROPERTY WHICH IS FREE AND MARKETABLE. AS PER CLAUSE 6(E) OF THE DEVELOPMENT AGREEMENT, THE ASSESSEE CLAIMS TO HAVE DECLARED THAT THERE ARE NO PROCEEDINGS PENDING IN ANY COURT OR BEFORE ANY AUTH ORITY AND THE PROPERTY UNDER TRANSFER IS NOT UNDER ANY LISPENDENS . FROM THE TEXT AND TENOR OF THE DEVELOPMENT AGREEMENT, IT IS ALSO EVIDENT THAT THE DEVELOPER SHALL ACQUIRE RIGHT ON THE ADDITIONAL AND FURTHER FSI AND OTHER BENEFIT S ATTACHED TO THE LAND ADMEASURING 3337 SQ.MTRS.. ON PERUSAL OF INDEX NO. 2 DATED 21.04.2006 GENERATED BY THE COMPETENT AUTHORITY I.E. SUB-REGIS TRAR, WE FIND THAT FOR THE 8 ITA NO.2230/PN/2013 PURPOSE OF DETERMINATION OF VALUATION OF DEVELOPMEN T RIGHTS IN TRANSFER, THERE IS NO REFERENCE TO THE IMPUGNED FSI, THE COST OF WH ICH IS SOUGHT TO BE CLAIMED BY THE ASSESSEE AS DEDUCTION. THE COST OF LAND ADM EASURING 3337 SQ.MTRS. HAS BEEN DETERMINED AT RS.1,89,68,056/- FOR THE PURPOSE OF STAMP VALUATION BY THE AUTHORITY CONCERNED WITHOUT FACTORING FSI/ TDR IN T HE IMPUGNED VALUATION. IN OTHER WORDS, THE CONSIDERATION DETERMINED BY THE RE GISTERING AUTHORITY HAS NOT TAKEN COGNIZANCE OF IMPUGNED FSI AT ALL. WE ALSO WE IGH THE ISSUE FROM A DIFFERENT PERSPECTIVE. AS PER THE LETTER FROM THE PMC, THE RIGHT THAT CAN BE INFERRED TO BE VESTED UPON THE ASSESSEE IS THE RIGH T TO DEMAND THE FSI/ TDR/ COMPENSATION AGAINST THE SURRENDER OF LAND AND THE RE IS NOTHING ON RECORD TO SHOW THAT THE AFORESAID RIGHT HAS BEEN DEMANDED AND THEREUPON STANDS ACTUALLY VESTED WITH THE ASSESSEE. IN OUR VIEW, THE RIGHT A CCRUED AS PER LETTER IS TENTATIVE IN NATURE AND IS NOT CAPABLE OF BEING TRANSFERRED I N THE ABSENCE OF ANY DEFINITE VESTING OF RIGHT IN FAVOUR OF THE ASSESSEE. 13. BE THAT AS IT MAY, IN THE PRESENT CASE, THE FSI / TDR WHICH IS STATED TO HAVE BEEN GENERATED ON ACQUISITION OF 892 SQ.MTRS. OF LAND IS NOT FORMING PART AND PARCEL OF THE SALE CONSIDERATION, THEREFORE, TH E CLAIM OF DEDUCTION OF COST OF ACQUISITION BY THE ASSESSEE IS NOT SUSTAINABLE. IN THIS VIEW OF THE MATTER, WE DECLINE TO INTERFERE WITH THE ORDERS OF THE AUTHORI TIES BELOW. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED ON THIS 30 TH DAY OF NOVEMBER, 2015. SD/- SD/- ( VIKAS AWASTHY ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER # / ACCOUNTANT MEMBER PUNE ; DATED : 30 TH NOVEMBER, 2015. 9 ITA NO.2230/PN/2013 % & '( )*' / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-III, PUNE; 4) THE CIT-III, PUNE; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. %+ / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE
