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TMI Blog2008 (6) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer in bringing to tax a sum of Rs. 4,76,400 as capital gains. 3. The brief facts of the case are that the assessee derived income from salaries, dividend etc. During the assessment proceedings, the Assessing Officer noted that the assessee had received a sum of Rs. 80,000 as compensation from the committee constituted by Jai Temple View Co.op. Hsg. Society. The aforesaid amount was not offered to tax by the assessee. The assessee is the member of that housing society. 4. There is an agreement dated 13-3-1995 between the developer M/s. Hetali Estate and Properties (P.) Ltd., and the members of Jai Temple View Co-op. Hsg. Society. From the agreement, the Assessing Officer noted that the society had given permission to the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he developer and this constituted an adventure in the nature of trade. 5. Before the Ld. CIT(A) it was contended by the assessee that no T.D.R. has been transferred to the developer by the assessee. According to the assessee, neither the assessee nor the society transferred the T.D.R. In respect of the transfer of capital asset is concerned, the CIT(A) noted that the society or the members had not technically transferred the T.D.R., in the sense of a legal authorization, but it has to be borne in mind that the amount paid by the assessee and the other members of the society towards the purchase of the land/flat was also for acquiring a bundle of rights in the said land and building including the right to grant permission for additional con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement. The Assessing Officer considered 1/3rd of the value of flat as the 'right of development' inherent in the value of the flat and thus adopted the sum at Rs. 40,000. The Assessing Officer has rightly adopted the indexed cost of the same at Rs. 1,03,600. The CIT(A) accordingly confirmed the action of the Assessing Officer. 7. The Ld. AR submitted that the assessee had not transferred any rights in or with respect to the flat owned by the assessee in the society and accordingly there was no transfer of any capital asset. The assessee did not possess any other rights in or with respect to the building owned by the society and/or the transferable development rights and/or the voluntary consent given does not constitute any rights or capit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gain under section 45 is clearly applicable. The ld. DR in support of his above contention relied upon the decision of ITAT Gauhati Bench in the case of ITO v. Md. Nasser Ahmed [2004] 2 SOT 389 and submitted that on identical set of facts whether the assessee having transferred his capital asset or extinguished any rights therein in favour of three purchasers vide registered sale deeds on which the assessee had also paid stamp duty at the prevailing market rate, it was held that the assessee had sold his valuable rights in the immovable property which is liable to capital gain. He further submitted that the facts of the case decided by the ITAT Mumbai Bench relied upon by the Ld. AR are distinguishable on the facts. 11. We have heard the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed to be the income of the year in which transfer took place.In order to tax on capital gains, subject-matter of transfer should be capital asset. The term "capital asset" has been defined in section 2(14), same reads as under :- "Capital asset" means property of any kind held by an assessee whether or not connected with his business or profession, but does not include- (i)any stock-in-trade, consumable stores or raw materials held for the purposes of his 'business or profession' (ii)Personal effects, that is to say movable property (including wearing apparel and furniture, but excluding jewellery) held for personal use by the assessee or any member of his family dependent on him." 12. The definition of capital asset given in secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er once the society decided to give its consent. The members of the society had paid for the purchase of the flat, which confers very limited rights in terms of the regulations of the society and 'right to grant permission for additional construction', as such does not form part of any rights; but it arises on account of the volition or voluntary desire of a person. Such permission cannot be obtained by enforcing any rights or obligation arising from the agreement to purchase the flat and/or the regulations of the society. Accordingly, the voluntary consent given cannot constitute or form part of the bundle of rights which are owned or possessed by the member in or with respect to the tenure of the flat granted to the member by the society. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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