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TMI Blog2013 (11) TMI 1714X X X X Extracts X X X X X X X X Extracts X X X X ..... ct and it was a clear case where capital gain arose on account of grant of development rights by the assessee which is evidenced by the development agreement. - Decided against assessee. Exemption claimed by the assessee u/s 54 - The Revenue challenged the Ld. CIT(A)'s decision to allow exemption u/s 54 for the cost of construction of certain floors. - HELD THAT:- Ld.CIT(A) has allowed the claim of the assessee for exemption u/s 54 of the Act by relying on the decision of the [ 2010 (8) TMI 482 - KARNATAKA HIGH COURT] wherein it has been held that residential flats constitute a residential house for the purpose of section 54 and further held that four residential flats cannot be construed as four residential houses for the purpose of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the permissible FSI. The assessee entered into a development agreement dated 16.07.2004 with the developer namely M/s. Bhawanji S. Bhadra. As per the term of the agreement, the developer agreed to construct a building Jai Sai and hand over the major part of the basement, ground floor, first, second, ninth, tenth and 11th floor premises to the assessee. Further, the developer was entitled to sell the remaining flats. The assessee had not shown any tax on the capital gains as the possession of the property was never parted by him and there was no transfer as envisaged in the provisions of capital gains. Further, the contention of the assessee was that he had sold right to load TDR and though it being a capital asset, which is not taxable sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. However, we are inclined to concur with the findings of the Ld.CIT(A) that the contentions of the assessee lack merit in view of the fact that as regards the construction relevant to the additional FSI of 11,658 sq.ft, being the flats sold by the developer on the said plot of land, the said property is sold and transferred to third parties along with possession thereof. The developer had the right to sell the said flats on account of the additional FSI by virtue of loading TDR. To that extent the rights, title and interest in the said plot of land have been transferred. Hence, it is a clear case of transfer envisaged both under Capital Gains and Transfer of Property Act. Therefore, the existing FSI as well as the additional FSI have the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Punjab Haryana High Court in the case of Pawan Arya v. CIT reported in 2011-TIOL-01-HC- P H-IT, it is pertinent to mention that the assessee, in the said case, has claimed exemption in respect of two independent residential houses situated at different locations namely one in Dilshad Colony, Delhi and the other in Faridabad and the benefit has been restricted by the court to one house since two new houses were acquired in different locations. However, the facts are distinguishable in the case of the present assessee. It is relevant to point out that the High Court of Delhi in the case of CIT Vs Gita Duggal [2013] 257 CTR 208 (Del) has held that residential house consists of several independent units cannot be permitted to act as an i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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