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TMI Blog2019 (4) TMI 1487X X X X Extracts X X X X X X X X Extracts X X X X ..... OMBAY HIGH COURT] as held Tribunal was justified in holding that while computing the capital gains arising on transfer of a capital asset acquired by the assessee under a gift, the indexed cost of acquisition has to be computed with reference to the year in which the previous owner first held the asset and not the year in which the assessee became the owner of the asset. Exemption u/s 54 - housing complex in the present case is situated on a piece of land which is occupied by the Cooperative Housing Society under a long term lease - Revenue argued that Assessee has to sell a capital asset in the nature of building and land appurtenant thereto to claim exemption - HELD THAT:- In the context of our case, what is important is that there sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NO.416 OF 2017 - - - Dated:- 18-4-2019 - AKIL KURESHI SARANG V. KOTWAL, JJ. Mr. P. C. Chottaray for Appellant. P.C. : 1. This Appeal is filed by the Revenue to challenge the Judgment of the Income Tax Appellate Tribunal. Following questions are presented for our consideration. (A) Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in accepting the claim of the Assessee and holding that the cost of acquisition of the property would be taken as the market value of the property as on 1st April 1981 and the indexation will be applied from 1st April 1981 with this base ? (B) Whether on the facts and in the circumstances of the case and in law, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... father. The flat complex was owned by a Cooperative Housing Society on a piece of land which was granted under a long term lease. Father of the Assessee was a member of the Cooperative Housing Society and owned the said flat. After his death, the Assessee received half share, other half going to his mother. These co-owners sold the flat under a registered deed dated 18/07/2008 for a sale consideration of ₹ 23 Crores. The Assessee, after sale of the flat, had invested a part of the sale consideration of ₹ 2.89 Crores (rounded of) in purchase of a new residential unit. In the return of income that he filed for the Assessment Year 20092010, he had shown the sale consideration of ₹ 11.50 Crores which was his share of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal, by the impugned Judgment, dismissed the Revenue's appeal upon which the present appeal has been filed. 7. Learned Counsel Mr. Chhotaray appearing for the Department argued that for availing benefit of Section 54 of the Act, the Assessee has to sell a capital asset in the nature of building and land appurtenant thereto. In the present case, the complex was situated on the land which itself was granted on lease. The Cooperative Housing Society was therefore not the owner of the land. What the Assessee therefore transferred under a registered sale deed was mere building and not land appurtenant thereto. In support of his contention that in the context of Section 54 of the Act, the word 'or' should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, one residential house in India, then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say, (i) if the amount of the capital gain is greater than the cost of the residential house so purchased or constructed (hereafter in this section referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtenant thereto. Firstly, there is no such prescription under Section 54(1) of the Act. Secondly, such a rigid interpretation would disallow every claim in case of transfer of a residential unit in a Cooperative Housing Society. The very concept of Cooperative Housing Society is that the society is the owner of the land and continues to be so irrespective of the incomings and outgoings of its members. A member of Cooperative Housing Societies has possessory right over the plot of land which is allotted to him. In case of a constructed building of a Cooperative Housing Society, the member owns the constructed property and along with other members enjoys the possessory rights over the land on which such building is situate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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