Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2024 (4) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (4) TMI 988 - BOMBAY HIGH COURTLTCG - Receipt of additional amount towards Transferable Development Rights (TDR) - treatment to receipt of consideration the appellant ceased to be the owner of the property - compensation received for settlement of dispute in respect of allotment of Flat - HELD THAT:- If the Revenue had serious doubts on the genuineness of the letter or the understanding as reflected in the letter or the intention of the parties, it should have summoned the developer to confirm the same. It does not appear that the Revenue had summoned the developer or tried to find the veracity of the letter. We should also note that admittedly the letter is signed by the developer. The genuineness of the letter is also confirmed by the fact that a substantial amount has also been paid to assessee . As per the letter, the developer committed to assessee that if in future the developer was able to obtain additional TDR and load it on the property being developed, an extra compensation at Rs. 1000/- per sq. ft. of the TDR utilised for additional construction of floors will be paid to assessee. In our view, the development agreement dated 29th September 1992 and the commitment letter also dated 29th September 1992 should be read as one agreement. The amount paid should be considered as payment under the development agreement itself. Assessee’s arguments that even the Government records showed assessee to be the owner of the property and there has been no transfer of the capital asset has been dismissed by the ITAT by saying that it takes time to get names changed due to which owner continued in such official records or simply the name of assessee might have continued. The agreement reflects the intention of the parties to the agreement. Neither the developer has come forward and told the Assessing Officer nor was he called to come and depose that the intentions of the parties were different from what assessee informed the Income Tax Department. Therefore, in our view, the ITAT was not correct in confirming the view of the Assessing Officer that this amount of should be treated as income from other sources. This amount should also be treated as consideration being paid for the developmental rights entered into on 29th September 1992 and treated as LTCG to be assessed in the year the amount was received. Assessee, we are informed, has paid LTCG on this amount in Assessment Year 1997-1998.
|