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TMI Blog2015 (12) TMI 447X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee has raised the common issue of disallowance of exemption claimed on amount received from developer towards transfer of development rights (in short "TDR"). 4. Briefly the facts relating to this issue are, the assessee an individual, filed his return of income for the assessment year under consideration on 30th September 2009, declaring total income of Rs. 15,23,090. During the assessment proceedings, the Assessing Officer, while verifying the return of income filed by the assessee, noticed that the assessee has claimed exemption of the amount received by him on account of transfer of development rights which amounts to Rs. 2.97 crores. Being of the opinion that the amount received by the assessee attracts long term capital g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not acceptable. In this context, he relied upon the decision of the Tribunal, Mumbai Bench, in Chiranjeev Lal Khanna v/s ITO, [2011] 132 ITD 474 (Mum.). Having held so, the learned Commissioner (Appeals) proceeded to enhance the assessment by estimating the market value of the flats received by the assessee as well as restricting exemption under section 54 of the Act. Against this order of the learned Commissioner (Appeals), the assessee preferred appeal before the Tribunal. The Tribunal, vide order dated 11th August 2014, set aside the order of the learned Commissioner (Appeals) with a direction to decide the matter afresh. In pursuance of such direction of the Tribunal, the impugned order has been passed by the learned Commissioner (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... far as reliance placed by the learned Commissioner (Appeals) on the decision of the Tribunal, Mumbai Bench, in Chiranjilal Khanna (supra), the learned counsel submitted that the appeal preferred by the assessee in that case has been admitted by the Hon'ble Jurisdictional High Court and still pending adjudication. 7. The learned Departmental Representative, on the other hand, relying upon the findings of the learned Commissioner (Appeals), submitted before us that the assessee having himself shown cost of acquisition in the computation of long term capital gain submitted in the course of assessment proceedings his claim that there is no cost of acquisition cannot be accepted. He, therefore, submitted that the claim of exemption by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rights accrued to the assessee under the Development Control Rules, 1991. It is further evident, instead of utilising the TDR rights himself, the assessee decided to transfer such rights to the developer for construction. However, there is no two opinion with regard to the fact that as far as the acquisition of development rights under Development Control Rules, 1991, is concerned, there is no cost to the assessee. Therefore, the issue to be decided is whether capital gain can be computed in respect of capital asset which has no cost of acquisition. The Hon'ble Jurisdictional High Court in Sambhaji Nagar Co-operative Housing Society Ltd. (supra) while considering identical nature of dispute relating to computation of capital gain on sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e be necessary so as to ascertain its cost for computing the capital gains. Therefore, the Tribunal was in no error in concluding that the TDR which was generated by the plot/property/land and came to be transferred under a document in favour of the purchaser would not result in the gains being assessed to capital gains. The factual backdrop is noted by the Tribunal in para 3 and thereafter the rival contentions. The Tribunal concluded and relying upon its order passed in two other cases that what the Assessee sold was TDR received as additional FSI as per the D. C. Regulations. It was not a case of sale of development rights already embedded in the land acquired and owned by the Assessee. The Tribunal's conclusion and further to be fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Co-operative Housing Society Ltd. (supra), following its own decision in Sambhaji Nagar Co-operative Housing Society Ltd. (supra) dismissed the Departmental appeal expressing same view. Respectfully following the aforesaid binding precedent of the Hon'ble Jurisdictional High Court, we hold that the amount received by the assessee towards compensation on sale of TDR cannot be subjected to long term capital gain as there is no cost of acquisition to the assessee for acquiring such rights. Accordingly, accepting the assessee's claim, we allow the grounds raised by the assessee." 10. As in the preceding paragraph, we have held that compensation received on account of sale of TDR rights is not taxable, the other issues raised by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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