BHATIA NAGAR PREMISES CO OPERATIVE SOCIETY LTD, MUMBAI V. ITO WD 25(3)(1), MUMBAI

ITA 7789/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3574 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 31-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S D SRIVASTAVA
• Assessee Lawyers: KETAN L VAJANI
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition
• Section: 50C

Judgement Text

ITA NO. 7789/MUM/2012 BHATIA NAGAR PREMISES CO-OPERATIVE SOCIETY LTD. PAGE 1 OF 12 IN THE INCOME TAX APPELLATE TRIBUNAL 'J' BENCH, MUMBAI BEFORE SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO. 7789/MUM/2012 (ASSESSMENT YEAR 2009-10 ) DATE OF HEARING: 5/6/2013 DATE OF PRONOUNCEMENT: 21 /6/2013 O R D E R PER RAJENDRA SINGH THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 29.10.2012 OF CIT (A) FOR THE ASSESSMENT YEAR 2009-10. THOUGH ASSESSE E HAS RAISED SEVERAL GROUNDS OF APPEAL, THE ONLY EFFECTIVE GROUND IS REGARDING TAX ABILITY OF CAPITAL GAIN OF ` . 538629592 ON ACCOUNT OF DEVELOPMENT RIGHTS AGREEMENT (DRA). 2. THE FACTS IN BRIEF ARE THAT ASSESSEE IS A COOPER ATING HOUSING SOCIETY REGISTERED UNDER THE MAHARASHTRA COOPERATIVE SOCIETY ACT 1986. THE A SSESSEE SOCIETY IS ABSOLUTE OWNER OF LAND/PLOT SITUATED AND LYING AT CTS SURVEY NO. 337/ 1, 337/2, 337/3, 337/4, 337/5, 337/6, 337/7, 337/7, 337/8, 337/9, 337/10, AT SHANTILAL MO DI ROAD, KANDIVALI (WEST), MUMBAI 400 064 AD MEASURING ABOUT 2803.60 SQUARE METER. ON THE SAID LAND, BUILDING CONSISTING OF THREE BLOCKS WAS CONSTRUCTED IN THE YEAR 1967-68 AND ALLO TTED TO 59 MEMBERS INCLUDING STATE BANK OF INDIA. THE TOTAL CARPET AREA OF ALL THE FLA TS TAKEN TOGETHER WAS 29666 SQUARE FEET. FLATS HAVE BEEN ALLOTTED TO THE SHARE HOLDERS WHO A RE THE MEMBERS OF SOCIETY AND IN BHATIA NAGAR PREMISES, CO-OPERATIVE SOCIETY LTD. SHANTILAL MODI ROAD, KANDIVALI (WEST), MUMBAI 400 067. PAN:- AAAAB3609D INCOME TAX OFFICER, WARD 24 (3)(1), PRATYAKSHA BHAVAN, C-11, ROOM NO. 307, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI 400051. APPELLANT RESPONDENT DEPARTMENT BY. SHRI S.D. SRIVASTAVA ASSESSEE BY: SHRI KETAN L. VAJANI. ITA NO. 7789/MUM/2012 BHATIA NAGAR PREMISES CO-OPERATIVE SOCIETY LTD. PAGE 2 OF 12 OCCUPATION OF THE RESPECTIVE FLATS. THE SOCIETY IN THE SPECIAL GENERAL MEETING ON 4.11.2007 PASSED A RESOLUTION, FOR RE-DEVELOPMENT OF THE SOCI ETY PROPERTY AND IN PURSUANCE OF THE SAID RESOLUTION ENTERED INTO A DEVELOPMENT RIGHTS AGREEM ENT (DRA) WITH M/S ANKUR REALITY PVT. LTD., WHICH WAS APPROVED BY THE SOCIETY MEMBERS AND THE DRA WAS REGISTERED ON 12.2.2009 BY THE DEVELOPER WHO HAD PAID THE DESIRED STAMP DUTY. 2.1 THE PROPERTY WAS HAVING FLOOR SPACE INDEX (FSI) OF 2803.60 SQUARE METER AND ADDITIONAL FSI OF 2803.60 SQ. METER IN THE FORM OF TDR. FURTHER, FSI OF 33% WAS ALSO AVAILABLE ON ACCOUNT OF NEW NOTIFICATION OF THE STA TE GOVERNMENT. IN TERMS OF THE DRA, M/S ANKUR REALITY WAS AUTHORIZED TO DEMOLISH AND RE CONSTRUCT THE EXISTING RESIDENTIAL BUILDING AND RECONSTRUCT THE ADDITIONAL BUILDING HA VING GROUND PLUS OF 9 FLOORS ALONG WITH BASEMENT FOR STORAGE. THE DEVELOPER WAS REQUIRED TO PROVIDE RESIDENTIAL UNITS WITH AN ADDITIONAL 28% CARPET AREA TO THE EXISTING MEMBERS. THE DEVELOPER WAS ALSO AUTHORIZED TO CONSTRUCT NEW BUILDING ON THE ADDITIONAL FSI AVAILA BLE TO THE SOCIETY AFTER OBTAINING THE NECESSARY TDR CERTIFICATES, DRA REQUIRED THE DEVELO PER TO PAY A SUM OF ` . 3.05 CRORE AS CORPUS FUND TO THE SOCIETY, ADDITIONAL SUM OF ` . 1.50 CRORE IN LIEU OF ADDITIONAL FSI AND ` . 30 LAKH AS ADDITIONAL BENEFIT ON ACCOUNT OF REDUCTI ON IN AREA FOR THE REASON OF ROAD WIDENING, NALLAH ETC. THUS, THE SOCIETY WAS TO REC EIVE THE TOTAL OF 4.85 CRORE FROM THE BUILDER IN TERMS OF THE AGREEMENT. 2.2 THE AGREEMENT FURTHER PROVIDED THAT IN CASE THE DEVELOPER IS NOT IN A POSITION TO OBTAIN INTIMATION OF DISAPPROVAL (IOD) AND COMMENCI NG CERTIFICATE (CC) WITHIN THE SIX MONTH OF THE AGREEMENT, THE AGREEMENT SHALL BE TERM INATED WITHOUT ANY FURTHER NOTICE. IT ALSO PROVIDED THAT EVEN IF IOD AND CC HAD BEEN OBTA INED IN TIME BUT THE DEVELOPER IS NOT IN A POSITION TO COMPLETE THE WORK OF CONSTRUCTION OF THE NEW BUILDING WITHIN A PERIOD OF 36 MONTHS ON ACCOUNT OF HIS DELIBERATE ACTS AND OMISSI ONS THE SOCIETY WOULD BE ENTITLED TO TERMINATE THE AGREEMENT BY GIVING ONE MONTH NOTICE TO THE DEVELOPER. AS THE DEVELOPER COULD NOT OBTAINED THE IOD AND CC WITHIN THE PRESCR IBED TIME LIMIT THE SOCIETY AS PER THE RESOLUTION DATED 26.9.2010 PASSED IN THE AGM DECIDE D TO CANCEL THE DRA, AND IN RESPONSE TO THE CANCELLATION NOTICE PUBLISHED IN NEWS PAPERS THE DEVELOPER FILED ARBITRATION PETITION BEFORE THE HON'BLE BOMBAY HIGH COURT. SUBSEQUENTLY, CONSENT TERMS WERE AGREED BETWEEN THE SOCIETY AND THE DEVELOPER DATED 26.10.2011 WHI CH WERE SIGNED UNDER THE SEAL OF THE HIGH COURT. IN THE CONSENT TERMS, THE MAIN TERMS AN D CONDITIONS OF THE DRA WERE RETAINED ITA NO. 7789/MUM/2012 BHATIA NAGAR PREMISES CO-OPERATIVE SOCIETY LTD. PAGE 3 OF 12 AND THE VARIATIONS WERE ONLY IN RELATION TO THE DEA DLINE FOR SUBMISSION OF PLANS AND ITS APPROVAL BY THE SOCIETY, COMPLETION OF LEGAL PROCES SES ETC. THE CONSENT TERMS ALSO PROVIDED THAT THE DEVELOPER WILL PAY RENT TO THE MEMBERS AT THE RATE OF 40/- PER SQUARE FEET FOR THE PERIOD OF FIRST 12 MONTHS, AT THE RATE OF 45 SQUARE FEET FOR THE PERIOD OF NEXT 12 MONTHS AND THE RATE OF 50/- PER SQUARE FEET IN CASE OF DELAY O F PROJECTS FOR THE THIRD YEAR AND IN CASE OF FURTHER DELAY THE DEVELOPER WAS TO PAY INCREMENTAL OF 10% IN EVERY TERM TILL POSSESSION. THE DEVELOPER WAS ALSO REQUIRED TO ALLOCATE 22 CAR PARKING SPACE TO SOCIETY WITHOUT ANY COST. 50% OF THE BALANCE CAR PARKING ON THE OPEN C AR PARKING SHALL BELONG TO THE SOCIETY AND THE DEVELOPER WAS ALSO REQUIRED TO PAY ` . 1000/- PER SQUARE FEET TO THE SOCIETY MEMBERS INDIVIDUALLY. THE CLAUSE (17) OF THE CONSENT TERMS ALSO PROVIDED THAT THE DEVELOPER SHALL PAY TO THE ASSESSEE THE LEGAL COST INCLUDING IT MAT TERS, PROFESSIONAL TAX AND SOLICITOR TAX IF ANY INCURRED BY ASSESSEE. 2.3 IN THE BACKDROP OF ABOVE FACTUAL POSITION THE I SSUE WHICH REQUIRED CONSIDERATION AT THE LEVEL OF AO WAS WHETHER ASSESSEE WAS ENTITLED T O DECLARE CAPITAL GAIN ON ACCOUNT OF DEVELOPMENT RIGHTS AGREEMENT (DRA). AO NOTED THAT A SSESSEE IN THE RETURN OF INCOME FILED FOR ASSESSMENT YEAR 2009-10 HAD NOT DECLARE A NY CAPITAL GAIN. AO ASKED THE ASSESSEE AS TO WHY CAPITAL GAIN SHOULD NOT BE TAXED IN RESPE CT OF DEVELOPMENT AGREEMENT. ASSESSEE SUBMITTED THAT IT HAD CLAIMED LONG TERM CAPITAL LOS S OF ` . 2,02,92,400/- IN ITS RETURN OF INCOME. AO HOWEVER, NOTED THAT THE ASSESSEE HAD NO T DECLARED ANY LONG TERM CAPITAL LOSS IN THE RETURN OF INCOME AND IT WAS ONLY THE AUDITOR WHO IN THE NOTES ON ACCOUNT HAD STATED THAT ASSESSEE HAD INCURRED LONG TERM CAPITAL LOSS O F ` . 2, 02,92,400/- ON TRANSACTIONS WITH THE DEVELOPER. THE SAID LOSS HAD BEEN COMPUTED AFT ER DEDUCTING THE INDEXED COST OF ACQUISITION OF LAND AND BUILDING FROM THE CONSIDERA TION RECEIVABLE OF ` . 4.85 CRORE. THE AUDITOR ALSO MENTIONED THAT ASSESSEE HAD FILED PETI TION CHALLENGING THE CONSTITUTIONAL VALIDITY OF SECTION 50 C. AO FURTHER NOTED THAT AS SESSEE HAD FILED THE WRIT PETITION CONSEQUENT TO THE ADVICE GIVEN BY THE TAX CONSULTA NT SHRI PRAFUL L. VORA, IN WHICH SHRI VORA OPINED THAT SINCE THE DRA HAD BEEN REGISTERED AT THE STAMP DUTY VALUE OF ` . 15,50,00,000/-, THERE WILL BE LONG TERM CAPITAL GAI N OF ` . 8,64,44,000/- BY VIRTUE OF THE PROVISIONS OF SECTION 50C. THE SAID CAPITAL GAIN HA D BEEN COMPUTED BASED ON THE COST OF LAND AND BUILDING AS ON 1.4.1981 AT ` . 1,18,20,000/- AND THE INDEXED AT ` . 6,85,56,000/-. ITA NO. 7789/MUM/2012 BHATIA NAGAR PREMISES CO-OPERATIVE SOCIETY LTD. PAGE 4 OF 12 2.4. AO OBSERVED THAT THE SOCIETY WAS ABSOLUTE OWNE R OF THE LAND ON WHICH THE BUILDING HAD BEEN CONSTRUCTED. THE SOCIETY HAD A SEPARATE ID ENTITY DIFFERENT FROM THE MEMBERS AND IT HAD ENTERED INTO AGREEMENT WITH BUILDER AS A SOCIET Y. THE SOCIETY, THEREFORE, ITSELF WAS RESPONSIBLE FOR ANY TAX RESPONSIBILITY ARISING OUT OF DEVELOPMENT RIGHTS AGREEMENT. THE SOCIETY HAD RECEIVED ADVANCED OF ` . 1.10 LAKH FROM THE DEVELOPER WHICH WAS DULY DECLA RED IN THE BALANCE SHEET AS ON 31.3.2009. HE REFERRED T O THE PROVISIONS OF SECTION 2 (47) (V) AS PER WHICH ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANC E OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, IT WAS DEEMED TO BE A TRANSFER. SINCE ASSESSEE HAD TAKEN ADVANCE IN THE RELEVANT YEAR THE ASSESSEE WAS LIABLE TO PAY TAX ON CAPITAL GAIN ARISING OUT OF DEVELOPMENT RIGHTS AGREEMENT. AO POI NTED OUT THAT ASSESSEE ITSELF IN THE LETTER DATED 4.10.2010 STATED THAT IT HAD DECLARED LONG TERM CAPITAL LOSS OF ` . 2,02,92,400/- IN THE RETURN OF INCOME. MR. PRAFUL L. VORA, THE TA X CONSULTANT HAD ALSO GIVEN ADVICE TO THE ASSESSEE THAT IT WOULD BE LIABLE TO LONG TERM CAPIT AL GAIN OF ` . 8,64,44,000/- ON THE BASIS OF STAMP DUTY VALUE OF ` . 15,50,00,000/-. AO, THEREFORE, HELD THAT ASSESSE E WAS LIABLE FOR LONG TERM CAPITAL GAIN IN ASSESSMENT YEAR 2009-10. 2.5 IN REGARD TO THE COMPUTATION OF LONG TERM CAPI TAL GAIN, AO NOTED THAT IN TERMS OF THE DRA, THE DEVELOPER WAS REQUIRED TO GIVE TOTAL CARP ET AREA OF 38127.36 SQ. FT. TO THE SOCIETY WHICH WAS REQUIRED TO BE DISTRIBUTED TO THE EXISTIN G MEMBERS. IT WAS ALSO MENTIONED IN THE DRA THAT IN CASE A MEMBER WANTED TO SELL THE FLAT T O THE DEVELOPER, IT WILL BE BOUGHT BY THE DEVELOPER AT THE RATE OF 10,200/- PER SQUARE FEET. THEREFORE, AO COMPUTED THE MARKET VALUE OF THE AREA CONSTRUCTED BY DEVELOPER FOR MEMBERS AT ` . 38,88,99,072(38127.36 X10,200) IN ADDITION, THE SOCIETY WAS ENTITLED TO RECEIVE ` . 4.85 CRORE AND ALSO ENTITLED TO GET ADDITIONAL PARKING SPACE WHICH WAS ESTIMATED BY AO AT ` . 50,00,000/-. THUS THE TOTAL CONSIDERATION WAS COMPUTED AT ` . 44,23,99,072/-. AO ALSO NOTED THAT AS PER THE CON SENT TERMS, THE COST RELATING TO THE INCOME TAX MATTERS WAS TO BE BORNE BY THE DEVELOPER. INCOME TAX LIABILITY WAS COMPUTED BY AO AT ` . 16,47,86,520/-. THUS HE COMPUTED THE LONG TERM CA PITAL GAIN AT ` . 538629592/- AFTER DEDUCTING THE INDEXED COST OF A CQUISITION OF ` . 6,85,56,000/- (4,42,39,99,072-6,85,56,000+ 16,47,86,520). AO ALSO OBSERVED THAT LONG TERM CAPITAL HAD BEEN COMPUTED WITHOUT PREJUDICE TO THE APPLICATION OF SECTION 50C WHICH IF IN FUTURE IS FOUND TO BE APPLICABLE, THE CAPITAL GAIN WOULD HAVE TO BE COMPUTED ON THE BASIS OF STAMP DUTY VALUE. ITA NO. 7789/MUM/2012 BHATIA NAGAR PREMISES CO-OPERATIVE SOCIETY LTD. PAGE 5 OF 12 3. ASSESSEE DISPUTED THE DECISION OF AO AND SUBMITT ED BEFORE CIT (A) THAT IN TERMS OF THE DRA IT WAS THE MEMBERS WHO HAD THE ENTITLEMENT FOR ACCOMMODATION IN THE NEW BUILDING. A SUM OF ` . 4.85 CRORE RECEIVED BY THE SOCIETY WAS ALSO REQUI RED TO BE DISTRIBUTED TO THE MEMBERS ONLY. THE RENT FOR TEMPORARY RENTED ACCOMMODATION WAS ALSO REQUIRED TO BE GIVEN BY THE DEVELOPER TO THE MEMBERS ALONG WITH RE IMBURSEMENT OF SHIFTING EXPENSES ETC. THEREFORE CONSIDERATION RECEIVED OR RECEIVABLE IN T ERMS OF THE DRA CANNOT BE TAXED IN THE HAND OF THE SOCIETY. IT WAS ALSO POINTED OUT EVEN I F THE CAPITAL GAIN IS CONSIDERED IN THE HANDS OF SOCIETY, NO TRANSFER HAD TAKEN PLACE DURIN G THE YEAR WHICH WAS NECESSARY FOR CHARGING OF CAPITAL GAIN. ASSESSEE HAD ONLY RECEIVE D A SUM OF ` . 1.10 LAKH BY WAY OF EARNEST MONEY. ASSESSEE SOCIETY HAD NOT GIVEN POSS ESSION OF THE PREMISES OCCUPIED BY THE MEMBERS FOR RE-DEVELOPMENT NO POSSESSION HAS BEEN G IVEN EVEN TILL DATE. ASSESSEE REFERRED TO THE DECISION OF TRIBUNAL IN CASE OF ACIT VS. GEE TA DEVI PASARI (44 SOT 64) IN WHICH IT WAS HELD THAT TRANSFER WAS NOT COMPLETE UNDER SECTI ON 2(47)(V) WITHOUT HANDING OVER THE POSSESSION. THE SAME VIEW HAD BEEN TAKEN BY THE TRI BUNAL IN CASE OF MAGJI MANGAL DAS VS. JCIT ( 75 ITD 523). THUS EVEN IF CAPITAL GAIN COULD BE CHARGED, THE SAME COULD NOT BE DONE IN THIS YEAR AS THERE WERE NO TRANSFER. ASSESSEE AL SO POINTED OUT THAT WRIT PETITION FILED BY ASSESSEE CHALLENGING THE CONSTITUTIONAL VALIDITY OF SECTION 50C HAS BEEN DISMISSED BY THE HON'BLE HIGH COURT AND, THEREFORE, THE CAPITAL GAIN IF ANY WAS REQUIRED TO BE COMPUTED ON THE BASIS OF STAMP DUTY VALUE. IN SUCH A CASE THE A SSESSEE HAD RIGHT TO OBJECT TO SUCH STAMP DUTY VALUATION DURING THE ASSESSMENT PROCEEDINGS WH ICH HAS TO BE REFERRED TO DEPARTMENTAL VALUATION OFFICER. 3.1 CIT (A) DID NOT ACCEPT THE CONTENTIONS RAISED B Y ASSESSEE. IT WAS OBSERVED BY HIM THAT EVEN THOUGH THE ASSESSEE HAD CANCELLED THE DRA , THE SAME HAD BEEN CHALLENGED BY THE DEVELOPER AND SUBSEQUENTLY CONSENT TERMS HAD BEEN S IGNED AND THAT IN THE CONSENT TERMS BOTH THE PARTIES HAD AGREED AND DECLARED THAT THE D EVELOPMENT RIGHTS AGREEMENT DATED 2.6.2008 WAS VALID, BINDING AND ENFORCEABLE. THEREF ORE, INCOME ACCRUING AS PER THE DRA WAS TAXABLE. THE CIT (A) DID ACCEPT THE PLEA OF ASS ESSEE THAT ANY CONSIDERATION RECEIVED OR RECEIVABLE BELONGED TO THE MEMBERS. IT WAS OBSERVED BY HIM THAT LAND AND BUILDING IN QUESTION BELONGED TO THE ASSESSEE WHO WAS THE ABSOL UTE OWNER AND THE INCOME ARISING OUT OF THAT HAD TO BE TAXED IN CASE OF ASSESSEE. IN FAC T, ASSESSEE ITSELF HAD AGREED THAT INCOME WAS TAXABLE IN CASE OF ASSESSEE WHICH WAS CLEAR FRO M THE FACT THAT IT HAD ITSELF ADMITTED ITA NO. 7789/MUM/2012 BHATIA NAGAR PREMISES CO-OPERATIVE SOCIETY LTD. PAGE 6 OF 12 CAPITAL LOSS ON THE TRANSACTION AND ALSO FILED THE OPINION OF TAX CONSULTANT SHRI PRAFUL L. VORA AS PER WHOM LONG TERM CAPITAL GAIN WAS CHARGEA BLE AT ` . 8,64,44,000/- ON THE BASIS OF STAMP DUTY VALUE WHICH HAD BEEN ACCEPTED BY ASSESSE E BEFORE THE HON'BLE HIGH COURT OF BOMBAY DURING THE WRIT PROCEEDINGS. AS REGARDS THE YEAR OF TAXABILITY, CIT (A) OBSERVED THAT ASSESSEE HAD RECEIVED THE PART OF CONSIDERATIO N OF ` . 1.10 LAKH ON 2.6.2008 AND, THEREFORE IN TERMS OF THE PROVISIONS OF SECTION 2(4 7) (V) LONG TERM CAPITAL GAIN WAS TAXABLE IN THIS YEAR IN RESPECT OF THE DEVELOPMENTS RIGHT A GREEMENT. CIT (A) ALSO UPHELD THE COMPUTATION OF LONG TERM OR THE GAIN MADE BY AO AT ` . 53,86,29,592/- AND OBSERVED THAT IN CASE IT WAS FOUND THAT PROVISIONS OF SECTION 50C, THE CAPITAL GAIN WOULD HAVE TO BE COMPUTED UNDER THAT SECTION, AGGRIEVED BY THE DECIS ION OF CIT (A) ASSESSEE IS IN APPEAL BEFORE TRIBUNAL. 4. BEFORE US, LEARNED AR FOR ASSESSEE GIVING THE BACKGROUND OF THE CASE SUBMITTED THAT THE SOCIETY BUILDING HAD BEEN CONSTRUCTED IN THE YE AR 1967-68 AND THE FLATS HAD BEEN ALLOTTED TO THE MEMBERS AND THE LAND HAD BEEN CONVE YED TO THE SOCIETY IN FEBRUARY 1969. IT WAS FURTHER SUBMITTED THAT IN THE YEAR 1991 THE DEV ELOPMENT CONTROL REGULATIONS (DCR) WERE RELAXED AS PER WHICH THE SOCIETY BECAME ENTITL ED FOR ADDITIONAL FSI ON WHICH FURTHER CONSTRUCTION COULD BE DONE AFTER OBTAINING TDRS. TH E ASSESSEE SOCIETY HAD THEREFORE, ENTERED INTO THE DEVELOPMENT RIGHTS AGREEMENT WITH THE DEVELOPER FOR TRANSFER OF THIS ADDITIONAL FSI TO THE BUILDER IN LIEU OF THE RECONS TRUCTION OF THE OLD BUILDING AND FURTHER CONSIDERATION OF ` . 4.85 CRORE HAD TO BE RECEIVED FROM THE BUILDER. I T WAS POINTED OUT THAT ADDITIONAL FSI HAD BEEN RECEIVED BY ASSESSEE IN VIE W OF THE GOVERNMENT REGULATIONS AND THERE WAS NO COST INCURRED BY ASSESSEE AND SINCE TH ERE WAS NO COST OF ACQUISITION INVOLVED, NO CAPITAL COULD BE CHARGED IN VIEW OF THE JUDGMENT OF HON'BLE SUPREME COURT IN CASE OF B.C. SHRINIVAS SHETTY(128 ITR 294). RELIANCE WAS AL SO PLACED ON THE DECISION OF TRIBUNAL IN CASE OF JETHA LAL D MEHTA ( 2 SOT 422) AND ANOTH ER DECISION OF MUMBAI BENCH OF TRIBUNAL IN CASE OF MAHESHWARI HOUSING PROPERTY LTD (118 ITD 223) IN WHICH FOLLOWING THE JUDGMENT OF HON'BLE SUPREME COURT IN CASE OF B .C. SRINIVAS SHETTY ( SUPRA ), THE CAPITAL HAS BEEN FOUND NOT LEVIABLE IN A CASE WHEN THE COST OF ACQUISITION WAS NIL. 4.1 IT WAS ALSO SUBMITTED THAT THE CAPITAL G AIN COULD NOT BE TAXED IN THIS CASE IN THE YEAR UNDER CONSIDERATION AS THERE WAS NO TRANSFER OF CAP ITAL ASSET IN THE YEAR. IT WAS SUBMITTED THAT THE SOCIETY HAD NOT GIVEN POSSESSION OF THE BU ILDING TO THE BUILDER FOR REDEVELOPMENT ITA NO. 7789/MUM/2012 BHATIA NAGAR PREMISES CO-OPERATIVE SOCIETY LTD. PAGE 7 OF 12 NOR ANY IOD AND CC HAD BEEN OBTAINED BY THE DEVELOP ER TILL DATE. HE REFERRED TO CLAUSE (J) OF DRA AS PER WHICH DEVELOPER WAS AUTHORIZED TO DEM OLISH AND RECONSTRUCT THE BUILDING AND SIMULTANEOUSLY HE WAS AUTHORIZED TO DEVELOP THE REMAINING PROPERTY BY CONSUMING THE PRINCIPAL FSI OF THE PLOT AND BY BUYING AND THE ADD ITIONAL TDR AS PER DC REGULATIONS. THUS THE TRANSFER OF FSI TO THE BUILDER CAN TAKE PLACE O NLY AFTER OBTAINING IOD AND CC FOR RECONSTRUCTION OF NEW BUILDING. IN THIS CASE THE DE VELOPER HAD NOT OBTAINED APPROVAL OF BUILDING PLAN AND CC AND THE OLD BUILDING WAS STILL IN OCCUPATION OF THE EXISTING MEMBERS. THEREFORE, IT WAS CLEAR THAT NO POSSESSION HAD BEEN HANDED OVER TO THE BUILDER AND NO TRANSFER HAD THUS TAKEN PLACE. IN SUCH A SITUATION, IT WAS ARGUED THAT THE CAPITAL GAIN COULD NOT BE CHARGED IN ASSESSMENT YEAR 2009-10. 4.2 IT WAS ALSO POINTED OUT THAT ASSESSEE HA D NOT RECEIVED ANY PART OF THE CONSIDERATION. THE ASSESSEE HAD RECEIVED ONLY THE EARNEST MONEY OF 1.10 LAKH WHICH WAS NOTHING BUT REIMBURSEMENT OF EXPENSES INCURRED BY ASSESSEE WHIC H WERE AT ` . 1,21,276/- AS PER DETAILS GIVEN AT PAGE 106 OF THE PAPER BOOK. ASSESSEE NEITH ER HAVING RECEIVED ANY SUBSTANTIAL PART OF THE CONSIDERATION NOR THE POSSESSION OF THE PROP ERTY, HAVING NOT BEEN PARTED WITH THE PROVISIONS OF SECTION 4 (47) (V) COULD NOT BE APPLI ED AND NO CAPITAL GAIN COULD BE CHARGED. RELIANCE WAS PLACED ON THE DECISION OF TRIBUNAL IN CASE OF GEETA DEVI PASARI ( 104 TTJ 375) WHICH IT WAS POINTED OUT HAS BEEN HELD BY THE HON'BLE HIGH COURT OF BOMBAY IN THE SAME CASE AS REPORTED IN (17 DTR 280). RELIANCE WAS ALSO PLACED ON THE DECISION OF TRIBUNAL IN CASE OF MEGJI MATHURA DAS VS. JCIT ( 75 ITD 2) AND ANOTHER DECISION OF TRIBUNAL IN CASE OF LAND BREEZ COOP. HOUSING SOCIET Y LTD.(55 SOT 103). 5. LEANED DR APPEARING FOR THE REVENUE ON THE OTHER HAND STRONGLY SUPPORTED THE ORDERS OF AUTHORITIES BELOW. IT WAS ARGUED THAT THE DATE OF DEVELOPMENT AGREEMENT IS THE DATE TRANSFER FOR THE PURPOSE OF APPLICATION OF SEC TION 2(47) (V). RELIANCE WAS PLACED ON THE JUDGMENT OF HON'BLE HIGH COURT OF BOMBAY IN CASE OF CHATURBHUJ DWARKA DAS KAPADIA VS. CIT ( 260 ITR 491). AS REGARDS THE COST ACQUISI TION OF FSI IT WAS SUBMITTED THAT SAME COULD NOT BE CONSIDERED AS NIL, AS THE ENTITLEMENT TO ABOVE FSI WAS BECAUSE OF THE LAND ON THIS GROUND IT COULD NOT BE ARGUED THAT NO CAPITAL GAIN COULD BE TAXED. RELIANCE WAS PLACED ON THE DECISION OF TRIBUNAL IN CASE OF CHIRANJIV LA L KHANNA VS. INCOME TAX OFFICER (132 ITD 474). ITA NO. 7789/MUM/2012 BHATIA NAGAR PREMISES CO-OPERATIVE SOCIETY LTD. PAGE 8 OF 12 6. IN REPLY, LEARNED AR FOR ASSESSEE SUBMITTED THA T THE JUDGMENT OF HON'BLE HIGH COURT OF BOMBAY IN CASE OF CHATURBHUJ DWARKA DAS KA PADIA ( SUPRA ) HAD BEEN CONSIDERED BY THE TRIBUNAL IN CASE OF GEETA DEVI PASARI ( 104 TTJ 375) AND ALSO BY THE HON'BLE HIGH COURT IN THE SAID CASE. IT WAS POINTED OUT EVEN TH E HON'BLE HIGH COURT IN CASE OF CHATURBHUJ DWARKA DAS KAPADIA ( SUPRA ) HAD HELD THAT THERE COULD BE TRANSFER ONLY ON PARTING OF THE SUBSTANTIAL CONTROL OVER THE PROPERT Y. IN THIS CASE THE SOCIETY DURING THE YEAR RETAINED THE FULL CONTROL OVER THE BUILDING AND, TH EREFORE, THERE WAS NO QUESTION OF TRANSFER IN THAT YEAR. 7. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING TAXABILITY OF CAPITAL GAIN ON ACCOUNT OF DEVELOPMENT RIGHTS AGREEMENT ENTERED INTO BY THE ASSESSEE WITH THE DEV ELOPER I.E. M/S ANKUR REALITY PVT. LTD. THE ASSESSEE SOCIETY WAS THE OWNER OF THE PLOTS ON WHICH BUILDING CONSISTING OF THREE BLOCKS HAD BEEN CONSTRUCTED DURING THE YEAR 1967-68 . THE FLATS IN THE BUILDINGS WERE ALLOTTED TO 59 MEMBERS OF SOCIETY INCLUDING STATE B ANK OF INDIA. THE ASSESSEE SOCIETY IN THE YEAR 2008-09 ENTERED INTO DRA WITH THE DEVELOPER FO R REDEVELOPMENT OF THE PROPERTY AND THE AGREEMENT WAS REGISTERED ON 12.2.2009. THE PROP ERTY WAS HAVING FSI OF 2803.60 SQ. METER AND ADDITIONAL FSI OF 2803.60 METER ALSO BECO ME AVAILABLE IN VIEW OF THE AMENDMENTS IN THE DCR. FURTHER FSI OF 33% WAS ALSO AVAILABLE ON ACCOUNT OF NEW NOTIFICATION OF THE STATE GOVERNMENT. THE DEVELOPER WAS AUTHORIZED TO DEMOLISH AND RECONSTRUCT THE EXISTING RESIDENTIAL BUILDING AND T O PROVIDE RESIDENTIAL UNITS WITH AN ADDITIONAL 28% CARPET AREA TO THE EXISTING MEMBERS . HE WAS ALSO REQUIRED TO PAY TO THE SOCIETY A SUM OF ` . 4.85 CRORE IN INSTALLMENTS. IN RETURN, THE DEVEL OPER WAS AUTHORIZED TO CONSTRUCT NEW BUILDINGS ON ADDITIONAL FSI AVAILABLE TO THE SOCIETY AFTER OBTAINING TDR CERTIFICATES. AS THE DEVELOPER COULD NOT OBTAIN IOD AND CC WITHIN THE PRESCRIBED TIME LIMIT AS PER THE TERMS AND CONDITIONS OF DRA THE SOCIETY VIDE RESOLUTION DATED 26.9.2010 DECIDED TO CANCEL THE DRA. IN RESPONSE TO WHICH THE DEVELOP ER FILED ARBITRATION PETITION BEFORE THE BOMBAY HIGH COURT. SUBSEQUENTLY, CONSENT TERMS WERE ARRIVED AT BETWEEN THE TWO PARTIES DATED 26.10.2011 UNDER THE SEAL OF THE HIGH COURT. THE MAIN TERMS AND CONDITION OF DRA WERE RETAINED IN CONSENT TERMS IN WHICH THERE WAS A DDITIONAL PROVISION FOR PROVIDING COMPENSATION FOR ALTERNATE ACCOMMODATION TO THE MEM BERS, TO ALLOCATE 22 CAR PARKING SPACE TO THE SOCIETY WITHOUT ANY COST AND TO REIMBU RSE THE LEGAL COST INCLUDING THE INCOME TAX MATTERS, PROFESSIONAL FEE AND SOLICITOR FEE IF ANY INCURRED BY THE SOCIETY. THE DEVELOPER ITA NO. 7789/MUM/2012 BHATIA NAGAR PREMISES CO-OPERATIVE SOCIETY LTD. PAGE 9 OF 12 HOWEVER HAS STILL NOT OBTAINED IOD AND CC NOR THE O LD BUILDING HAD BEEN DEMOLISHED TILL DATE. THE ISSUE IS WHETHER ON THE FACTS OF THE CASE CAPITAL GAIN CAN BE CHARGED ON ACCOUNT OF DEVELOPMENT RIGHTS AGREEMENT IN THE ASSESSMENT YEAR 2009-10 AND, IN CASE, CAPITAL GAIN IS CHARGEABLE WHAT WOULD BE THE QUANTUM OF THE CAPITAL GAIN. 8. THE AUTHORITIES BELOW APPLIED THE PROVISIONS OF SECTION 2 (47) (V) AS PER WHICH ANY TRANSACTION INVOLVING ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE N ATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT 1882 WILL CONSTITUTE TRANS FER. SINCE THE DRA WAS REGISTERED ON 12.2.2009 AND ASSESSEE HAD RECEIVED A SUM OF ` . 1.10 LAKH FROM THE DEVELOPER THE AUTHORITIES BELOW HAVE CONCLUDED THAT THERE WAS TRA NSFER DURING THE ASSESSMENT YEAR 2009- 10 IN VIEW OF THE PROVISIONS OF SECTION 2 (47)(V) MENTIONED ABOVE. ASSESSEE HAS HOWEVER ARGUED THAT ASSESSEE RETAINING THE COMPLETE CONTROL OVER THE PROPERTY AND HAVING NOT HANDED OVER THE POSSESSION, THERE COULD NOT BE ANY TRANSFER U/S 2 (47) (V). WE FIND SUBSTANCE IN THE ARGUMENT ADVANCED BY THE LEARNED A UTHORIZED REPRESENTATIVE FOR THE ASSESSEE. THE ASSESSEE IN THIS CASE HAS NOT TRANSFE RRED THE LAND AND THE BUILDING. THE ASSESSEE HAS ONLY TRANSFERRED ITS ENTITLEMENT TO AD DITIONAL FSI TO THE DEVELOPER FOR RECONSTRUCTION OF BUILDING. THE DEVELOPER IS REQUIR ED TO DEMOLISH AND RECONSTRUCT THE OLD BUILDING WITH AN ADDITIONAL 28% CARPET AREA AND HAN D OVER THE SAME TO THE EXISTING MEMBERS. THE TRANSFER IS ONLY OF ADDITIONAL FSI AVA ILABLE TO ASSESSEE IN RESPECT TO THE EXISTING LAND FOR THE PURPOSE OF CONSTRUCTION OF AD DITIONAL BUILDINGS WHICH WOULD BE OWNED BY THE DEVELOPER. THEREFORE, THE REAL ISSUE IS WHET HER ASSESSEE HAS TRANSFERRED ITS RIGHTS IN THE ADDITIONAL FSI DURING THE YEAR. 9. THE CLAUSE (J) OF DRA CLEARLY PROVIDED THAT THE DEVELOPER WAS AUTHORIZED TO DEMOLISH AND RECONSTRUCT THE OLD BUILDING AND SIMUL TANEOUSLY HE WAS AUTHORIZED TO DEVELOP THE REMAINING PROPERTY CONSUMING THE PRINCIPAL FSI OF THE PLOT AND BY BUYING AND UTILIZING ADDITIONAL TDR AS PER DC REGULATIONS. THEREFORE, AS SESSEE COULD TRANSFER THE ADDITIONAL FSI ONLY ON DEMOLITION OF OLD BUILDING WHICH HAS NOT TA KEN PLACE EVEN TILL NOW. THE DEVELOPER HAS NOT BEEN ABLE TO OBTAIN EVEN THE IOD AND CC IN RESPECT OF THE RECONSTRUCTION OF THE OLD BUILDING AS WAS REQUIRED TO BE DONE UNDER THE DRA. THE OLD BUILDING HAS NOT BEEN DEMOLISHED TILL DATE AND THE MEMBERS CONTINUE TO OC CUPY THEIR FLATS IN THE OLD BUILDINGS. IN ITA NO. 7789/MUM/2012 BHATIA NAGAR PREMISES CO-OPERATIVE SOCIETY LTD. PAGE 10 OF 12 SUCH A SITUATION IT COULD NOT BE SAID THAT THE ASSE SSEE HAD TRANSFERRED ITS RIGHTS OVER THE FSI TO THE DEVELOPER IN ASSESSMENT YEAR 2009-10. 10. THE CASE OF THE ASSESSEE IS SUPPORTED BY THE DE CISION OF TRIBUNAL IN CASE OF ACIT VS. GEETA DEVI PASARI ( SUPRA ) IN WHICH IT HAS BEEN HELD THAT TRANSFER OF PROPER TY UNDER THE DEVELOPMENT RIGHTS AGREEMENT COULD BE SAID TO HAVE TAKEN PLACE WHEN THE POSSESSION WAS HANDED OVER TO THE DEVELOPER AND NOT ON THE DATE OF AGREEMENT WHEN ONLY A SMALL PORTION OF THE CONSIDERATION HAD BEEN RECEIVED AS EARNEST MONE Y DEPOSIT. THE SAID DECISION OF TRIBUNAL HAS BEEN UPHELD BY HON'BLE HIGH COURT OF B OMBAY AS REPORTED IN (17 DTR 280). THE ARGUMENT RAISED ON BEHALF OF THE DEPARTMENT IS THAT THE DATE OF DEVELOPMENT AGREEMENT ITSELF CONSTITUTE TRANSFER DATE. REVENUE HAS RELIED UPON THE JUDGMENT OF HON'BLE HIGH COURT OF BOMBAY IN CASE OF CHATURBHUJ DWARKA DAS KAPADIA VS. CIT ( 260 ITR 491). WE HAVE CAREFULLY GONE THROUGH THE SAID JUDGMENT. IN THAT C ASE THE ASSESSEE HAD AGREED TO SELL HIS SHARE OF PROPERTY FOR A SUM OF ` . 1.85 CRORE. THE ASSESSEE AGREED IN CLAUSE (8) TO EXECUTE LIMITED POWER OF ATTORNEY AUTHORIZING THE BUILDER T O DEAL WITH THE PROPERTY AND ALSO TO OBTAIN PERMISSION AND APPROVAL OF AUTHORITIES FOR C ONSTRUCTION OF BUILDING. THE CLAUSE (9) OF THE AGREEMENT PROVIDED THAT AFTER OBTAINING NECESSA RY PERMISSION AND APPROVAL BY THE BUILDER AND UPON RECEIPT OF NO OBJECTION CERTIFICAT E FROM THE INCOME TAX DEPARTMENT THE ASSESSEE COULD GRANT AN IRREVERSIBLE LICENSE TO THE BUILDER TO ENTER THE PROPERTY. BY MARCH 1996, THE BUILDER HAD PAID ALMOST THE ENTIRE CONSID ERATION EXCEPT A SUM OF ` . 9,98,000/-. THE DEPARTMENT TOOK THE VIEW THAT THE CAPITAL GAIN WAS CHARGEABLE IN THE ASSESSMENT YEAR 1996-97. HON'BLE HIGH COURT NOTED FROM THE ORDER O F THE TRIBUNAL THAT THE BUILDER CAME INTO POSSESSION OF PROPERTY ON THE DATE NEXT TO 31. 3.1996 I.E. 1.4.1996. THEREFORE THE POSSESSION WAS GIVEN ONLY IN ASSESSMENT YEAR 1997-9 8. THE HIGH COURT OBSERVED THAT THE DATE OF AGREEMENT I.E. 18.8.1994 ON WHICH THE ASSES SEE HAD AGREED TO EXECUTE POWER OF ATTORNEY TO THE BUILDER WAS RELEVANT DATE FOR DETER MINING THE DATE OF TRANSFER. FURTHER THE HIGH COURT ALSO NOTED THAT THE POWER OF ATTORNEY HA D BEEN EXECUTED ONLY ON 12.3.1999. THE HIGH COURT, THEREFORE, HELD THAT IN EITHER CASE THE CAPITAL GAIN COULD NOT BE CHARGEABLE IN ASSESSMENT YEAR 1996-97. THE JUDGMENT IN CASE OF CH ATURBHUJ DWARKA DAS KAPADIA VS. CIT ( SUPRA ) HAD ALSO CAME UP FOR CONSIDERATION BEFORE THE HON 'BLE HIGH COURT OF BOMBAY IN CASE OF CIT VS. GEETA DEVI PASARI ( 17 DTR 280). THE HON'BLE HIGH COURT FOLLOWING THE SAID JUDGMENT HAD HELD THAT CAPITAL GAIN COULD BE TAXABLE ONLY IN THE ASSESSMENT YEAR IN WHICH THE PURCHASER WAS PHYSICALLY PUT INTO THE POS SESSION OF THE PROPERTY. THUS EVEN AFTER ITA NO. 7789/MUM/2012 BHATIA NAGAR PREMISES CO-OPERATIVE SOCIETY LTD. PAGE 11 OF 12 CONSIDERING THE JUDGMENT IN CASE OF CHATURBHUJ DWAR KA DAS KAPADIA ( SUPRA ) IT HAS BEEN HELD BY THE HON'BLE HIGH COURT THAT THERE WILL BE T RANSFER ONLY IN THE YEAR OF HANDING OVER THE POSSESSION OF THE PROPERTY U/S 2(47)(V) AS PAR T PERFORMANCE OF THE CONTRACT. THE SAME VIEW HAS BEEN FOLLOWED BY THE MUMBAI BENCH OF TRIBU NAL IN CASE OF MEGJI MATHURA DAS VS. JCIT ( 75 ITD 2). 11. IN THE PRESENT CASE AS WE HAVE MENTIONED EARLI ER THE ASSESSEE RETAINED FULL CONTROL OVER THE EXISTING BUILDING AS WELL AS THE ADDITIONA L FSI AVAILABLE WHICH HAD NOT BEEN PARTED WITH. THE ASSESSEE HAD RECEIVED ONLY A SUM OF ` . 1.10 LAKH FROM THE DEVELOPER WHICH IS STATED TO BE REIMBURSEMENT OF EXPENSES INCURRED BY THE ASSESSEE. IN THESE CIRCUMSTANCES WE ARE OF THE VIEW THAT NO TRANSFER HAD TAKEN PLACE IN THE YEAR UNDER CONSIDERATION AND, THEREFORE, NO CAPITAL GAIN CAN BE CHARGED IN THIS Y EAR. 12. LEARNED AR FOR ASSESSEE HAS ALSO ARGUED THAT TH E CAPITAL GAIN THAT CAN BE CHARGED IS ONLY IN RESPECT OF TRANSFER OF ADDITIONAL FSI TO WH ICH THE ASSESSEE WAS ENTITLED. THE ASSESSEE HAD NOT TRANSFERRED NOR WAS REQUIRED TO TR ANSFER THE LAND OF WHICH THE ASSESSEE WAS ABSOLUTE OWNER AND THE BUILDING OCCUPIED BY THE MEM BERS. THE TRANSFER COULD TAKE PLACE ONLY IN RESPECT OF ADDITIONAL FSI WHICH THE ASSESSE E HAD ACQUIRED AS PER THE GOVERNMENT POLICY AND THERE WAS NO COST OF ACQUISITION INVOLVE D. THEREFORE, IT HAS BEEN ARGUED THAT NO CAPITAL GAIN CAN BE CHARGED IN SUCH A CASE IN VIEW OF THE JUDGMENT OF HON'BLE SUPREME COURT IN CASE OF B.C. SHRINIVAS SHETTY ( SUPRA ). THE ARGUMENT OF ASSESSEE IS SUPPORTED BY THE DECISION OF MUMBAI BENCH OF TRIBUNAL IN CASE OF JETHA LAL D MEHTA ( 2 SOT 422). THE RELIANCE HAS ALSO BEEN PLACED ON THE DECISION OF MU MBAI BENCH OF TRIBUNAL IN CASE OF MAHESHWARI HOUSING PROPERTY LTD (118 ITD 223). IN T HAT CASE ALSO, THE ISSUE WAS CHARGEABILITY OF CAPITAL GAIN ON ACCOUNT OF ADDITIO NAL FSI AVAILABLE TO THE ASSESSEE RELATED TO THE OLD BUILDING. THE TRIBUNAL OBSERVED THAT EN TIRE FSI OF THE LAND HAVING BEEN EXHAUSTED THERE WAS NO RIGHT OF ADDITIONAL CONSTRUC TION EMBEDDED INTO THE LAND. THE ADDITIONAL FSI BECAME AVAILABLE TO THE ASSESSEE DUE TO OPERATION OF DEVELOPMENT CONTROL REGULATION WHICH DID NOT INVOLVE ANY COST. IT HAD B EEN ARGUED BEFORE THE TRIBUNAL THAT ADDITIONAL FSI WAS AVAILABLE ONLY BECAUSE OF OWNERS HIP OF THE LAND AND, THEREFORE THE COST OF LAND HAD TO BE SPREAD OVER THE ORIGINAL FSI AND ADDITIONAL FSI AS IS DONE IN THE CASE OF BONUS SHARE AND THUS THE ADDITIONAL FSI DID HAVE CO ST ATTACHED TO IT. THE TRIBUNAL HOWEVER DID NOT ACCEPT THE CONTENTIONS RAISED. IT WAS OBSER VED THAT THE CONCEPT OF ACQUISITION OF ITA NO. 7789/MUM/2012 BHATIA NAGAR PREMISES CO-OPERATIVE SOCIETY LTD. PAGE 12 OF 12 BONUS SHARES COULD NOT BE IMPORTED AS BONUS SHARES WERE ISSUED TO THE DETRIMENT OF ORIGINAL SHARES BUT IN THIS CASE THERE WAS NO DETRIMENT TO T HE COST OF LAND RATHER THE SAME HAD INCREASED. NO CONTRARY DECISION OF ANY HIGH COURT O R APEX COURT HAS BEEN BROUGHT TO OUR NOTICE. THEREFORE, FOLLOWING THE DECISION OF TRIBUN AL MENTIONED ABOVE NO CAPITAL GAIN COULD BE CHARGED ON THE GROUND THAT NO COST OF ACQU ISITION WAS INVOLVED IN THE ADDITIONAL FSI. 10. IN VIEW OF THE FOREGOING DISCUSSION AND FOR THE REASONS GIVEN EARLIER, WE ARE OF THE VIEW THAT CHARGE OF CAPITAL GAIN BY THE AUTHORITIES BELOW IN THE RELEVANT YEAR WAS NOT JUSTIFIED. THE ORDER OF CIT (A) UPHOLDING THE ORDER OF AO IS, THEREFORE, SET ASIDE. AS WE HAVE SET ASIDE THE ORDER OF CIT (A) ON THE LEGAL GR OUNDS, IT IS NOT NECESSARY FOR US TO GO INTO THE DISPUTE RELATING TO COMPUTATION OF THE CAPITAL GAIN. 14. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED ON 21 ST JUNE 2013. SD/- SD/- (SANJAY GARG ) (RAJENDRA SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 21 ST JUNE, 2013. SK SR. P.S. COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, J BENCH, ITAT, MUMBAI 6. BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI