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TMI Blog2014 (7) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... that the amount received by the assessee on assignment of rights to receive the transferable development rights ends up reducing effective cost of acquisition of the land and building in the said plot - as and when the assessee transfers the said plot, building or any portion thereof and while determining capital gains arising on such sale, the cost of acquisition may stand reduced by the amount received by the assessee on assignment of rights to receive the TDRs. What the assessee has transferred is not the plot or the building, but a right parting with which does not result in parting with land or building - The costs of obtaining BMC approval for the building plan can also not be said to be the costs of acquisition of these rights as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 22,49,203/- as consideration for sale of additional FSI/TDR in the society namely Kamaleshwar Co-Op. Hsg. Society from M/s Orbit Enterprises, a developer. The capital gain arising from this transaction was offered by the assessee to tax in his return of income filed for A.Y. 2004-05 and the same entirely claimed to be exempt u/s 54EC of the Act as a result of investment made in NABARD Tax free bonds. According to the A.O., the said capital gain arising to the assessee on sale of FSI was taxable in the year in which the assessee had entered into agreement with the developer on 19-9- 2002 and the same therefore was chargeable to tax in A.Y. 2003-04. He accordingly reopened the assessment for A.Y. 2003-04 after recording the reasons and iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 147 of the Act, appeal was preferred by the assessee before the ld. CIT(A) disputing the addition made on account of capital gain arising from sale of additional FSI/TDR and after considering the submissions made on behalf of the assessee and material available on record, the ld. CIT(A) deleted the addition made by the A.O. on account of capital gain for the following reasons given in para 5 of his impugned order:- 5. I have considered the submissions of the representative and the stand taken by the A.O. Admittedly, the appellant received ₹ 22, 49,203/- from M/s Orbit Enterprises towards sale of TDR in respect of his rights in Tagore Road Kamleshwar Co-operative Housing Society Ltd. The A.O. treated the sale of TDR as sale of tena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usal of the same shows that a similar issue involved in the said case has been decided by the Tribunal in favour of the assessee vide para 7 to 10 of its order which are reproduced hereunder:- 7. Having heard the rival contentions and having perused the material on record, we find that the issue of taxability of such a receipt is covered in favour of the assessee by decision of a co-ordinate bench in the case of Jethalal D. Mehta Vs DCIT, 2 SOT 422, wherein the Tribunal, speaking through one of us (i.e., the Accountant Member), observed as follows: 5. We may mention that as far Cadell Wvg. Mill Co. (P) Ltd. s case (supra) is concerned, the Special Bench decision of the Tribunal has since been reversed by the Hon ble Bombay high Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rights being relatable to the leasehold rights in the plot could at best be that the amount received by the assessee on assignment of rights to receive the transferable development rights ends up reducing effective cost of acquisition of the land and building in the said plot. Therefore, as and when the assessee transfers the said plot, building or any portion thereof and while determining capital gains arising on such sale, the cost of acquisition may stand reduced by the amount received by the assessee on assignment of rights to receive the TDRs. The CIT(A) s observations that this right cannot be said to be without any cost of acquisition because the TDRs have been received on surrender of reserved plot to the Government is ex facie inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies below erred in law and on facts in holding to the contrary. 8. We have no reasons to take any other view of the matter than the view so taken by the co-ordinate bench. 9. In view of the above discussion, we hold that the authorities below indeed erred in law is taxing the amount of ₹ 12,62,619/- as income of the assessment year before us. We leave it that. 10. For the reasons set out above, we direct the Assessing Officer to delete the impugned additions of ₹ 12,62,619/-. The assessee gets the relief accordingly. 6. As the issue involved in the present case as well as all the material facts relevant thereto are similar to the case of Late Smt. Jamnabai Anandji Matani, Legal heir of Shri Bhupendra Matani (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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