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TMI Blog2014 (10) TMI 1078X X X X Extracts X X X X X X X X Extracts X X X X ..... extinguished and in lieu thereof the assessee has obtained a compensation of Rs. 11,00,000/- and a new flat having an area of 660 Sq.ft. Hence, in our view, the Ld CIT (A) was justified in holding that the impugned transaction is liable for Capital gains tax. We are of the view that the value of new flat and the compensation received is to be considered as the sale consideration received on giving of old flat. Against the same, the assessee is entitled to deduct the indexed cost of acquisition of old flat and the indexed cost of improvement, if any, incurred in respect of that flat in order to arrive at the Capital gain. Since the new flat is obtained on transfer of old flat, the assessee s claim for deduction u/s 54 of the Act is also just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reinafter referred to as the Act). 3. The brief facts of the case are that the assessee had been owner of a residential flat admeasuring 450 sq. ft. carpet area in a building called Sunil Niwas CHS Ltd. During the year under consideration, the assessee vide agreement dated 20.05.08, entered into a redeveloped agreement with M/s. Karnani Builders Developers whereby it was agreed that the property would be redeveloped by demolishing the existing building and constructing a new building. In lieu of surrendering his rights in the flat along with FSI rights, the assessee received an amount of Rs. 11,00,000/- as compensation, Rs. 3,28,000/- as rent compensation and additional area of 210 sq. ft. in the flat to be given to the assessee in the new ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as capital gains. He also rejected the contention of the assessee that the additional FSI rights acquired by the assessee were embedded in the cost of land and were not a separate and independent right dehores the rent and as such it could not be said that there was no cost of acquisition of the additional FSI rights. He therefore held that the total consideration received by the assessee i.e. Rs. 11,00,000/- plus monitory value of additional 210 sq. ft. area calculated at Rs. 16,05,515/- was liable for tax under the head Long term capital gains and as such directed the AO to compute the same as per ready recknor rates. Aggrieved from the order of the AO, the assessee has preferred the present appeal before us. 5. We have heard the Ld. Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the society which is the lessee of land and not the assessee and other members. Hence, it cannot be said that the assessee and other members have got the right of additional FSI. In fact, the assessee along with other owners of the flat and the society has collectively handed over the land and flats for re-development, meaning thereby, the existing right of the assessee over his flat got extinguished and in lieu thereof the assessee has obtained a compensation of Rs. 11,00,000/- and a new flat having an area of 660 Sq.ft. Hence, in our view, the Ld CIT (A) was justified in holding that the impugned transaction is liable for Capital gains tax. 7. In the case of Jethalal D Mehta (referred supra), the assessee therein was the owner of a Plot, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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