9911796707
TMI Blog2009 (8) TMI 1267X X X X Extracts X X X X X X X X Extracts X X X X ..... a narrow compass. The assessee-society - a registered Cooperative Housing Society - is not engaged in any business activity. According to the assessee, the members owned a piece of land out of which 12 flats were constructed as per the maximum PSI available to them and formed themselves into a society. Since the assessee had no right to construct further structure on it, there was no question of exploiting any of its available right so as to earn income out of it. However, on 15-12-1998 M/s. Prime Property Developers Pvt. Ltd. approached the society to seek permission to construct two floors and 8 flats on the existing building by exploiting the TDR/FSI available with it and in return the assessee-society was offered a lumpsum amount of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence it cannot be said to be a transfer of any right in respect of the land or part thereof. Thus the amount received by the assessee-society cannot be brought to tax. 4. The Assessing Officer observed that the assessee having entered into an agreement with M/s. Prime Property Developers Pvt. Ltd. for construction of additional floors on the existing structure there was performance on part of the assessee also which can be equated to transfer by way of relinquishment of right i.e., "to load TDR and construct additional floors". On transfer of such right the amount received by the assessee has to be offered to tax under the head "Long term capital gains". Since there is no cost of acquisition, in the absence of details, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of additional space available with it. M/s. Prime Property Developers Pvt. Ltd. is an independent entity which acquired TDR/FSI and thus became eligible to construct two floors on any existing building and in turn, requested the assessee-society and its members to permit him to construct additional two floors and for the inconvenience caused to the parties, it had agreed to pay ₹ 32 lakhs to the society and ₹ 48 lakhs to the Members by virtue of first agreement. But, thereafter, the agreement was revised whereby, payment to the Members was enhanced @ ₹ 5.50 lakhs per head totaling to ₹ 66 lakhs and ₹ 26 lakhs was agreed to be paid to the society. The entire sum of ₹ 92 lakhs was paid to the society and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the nature of trade or as capital gain. The Bench agreed with the contention of the assessee that it was not assessable to tax as capital gains since there was no cost of acquisition in obtaining the development rights certificate. Similarly in the case of Deepak Shah, a society entered into an agreement with the developer whereby it granted permission to the developer for construction of additional floors since the developer was in possession of transferable development rights (TDR). The amount received" by the individual member was sought to be taxed by the Assessing Officer whereas the assessee (individual member) contended that he was not holding a capital asset so as to consider the receipt as relatable to transfer of such asset. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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