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TMI Blog2024 (11) TMI 817X X X X Extracts X X X X X X X X Extracts X X X X ..... e of capital asset (old flats no. 266 and 273) for another capital assets (new flats no. 23 and 23B) as discussed as per the re-development agreement entered with the developer therefore we direct the assessing officer to allow the claim of deduction u/s 54 of the Act as directed by the ITAT in the above referred case of Shri Dilip P. Ahuja [ 2014 (10) TMI 1078 - ITAT MUMBAI] - Shri Amarjit Singh, Accountant Member And Shri Sandeep Singh Karhail, Judicial Member For the Assessee : Shri Bharat Kumar For the Revenue : Shri Bhangepatil Pushkaraj Ramesh, Sr. DR ORDER PER AMARJIT SINGH, ACCOUNTANT MEMBER: This appeal of the assessee for the assessment year 2020-21 is directed against the order dated 06.05.2024 passed by the ld. Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On query, the assessee claimed that he was in possession of flat no. 273 in the erstwhile Adarshnagar Beach Corner Co-operative Housing Society and this flat was purchased for a total consideration of Rs. 7,50,000/- on 13.02.1995/-. Subsequently, all the owners of 23 flats at the above referred Housing Society entered into a re-development agreement with M/s. Vraj Realtors for re-developing this flat after demolition the existing flats. The assessee who was having 410 sq. ft. flat in the old building was entitled for a total carpet area of 656 sq. ft. in the new building as per the terms of the agreement. The flats were handed over for demolition and re-development during the F.Y. 2015-16. Thereafter, the assessee received flat no. 23B an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flat at Rs. 23,002/- per sq. ft. The extra carpet area of (416 sq. ft. + 312 sq. ft.) 728 sq. ft. as computed as above was treated as deemed income accrued to the assessee amounting to Rs. 167,45,456/- (Rs. 23,002/- x 728 sqf) as income from other sources. 4. Aggrieved assessee filed before the ld. CIT(A). However, the ld. CIT(A) has dismissed the appeal of the assessee. Even the assessee has filed alternative ground of appeal before the ld. CIT(A) to allow claim u/s 54 for benefit of capital gain for acquisition of flat. However, the ld. CIT(A) has not allowed the alternative claim of exemption of capital gain u/s 54 of the Act. 5. During the course of appellate proceedings before us, the ld. Counsel filed paper book comprising copies of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower authorities. 7. Heard both the sides and perused the material on record. Without reiterating the fact as discussed above in this order, the assessee has ben allotted flat no. 23B and 23A in Vraj Tiara Building No. 17, Adarshnagar Beach Corner, Veer Nariman Road, Worli, Mumbai-400030 in exchange of existing flats no. 273 and 266 under the re-development project. The flat no. 234A was co-owned by the assessee along with his wife. As per the Registration Authorities, the market value of each flat was at Rs. 2,66,83,000/- and the assessee had also paid total consideration of Rs. 85,50,000/- for each flat as per the term of the agreement for purchasing additional carpet area for both the flats. The ld counsel has also submitted that when tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Government policy and further the said additional FSI had no cost of acquisition. Accordingly, the Ld A.R contended that the compensation received for transfer of additional FSI cannot be subjected to Capital gain tax, since there was no cost of acquisition. In this regard, the assessee mainly placed reliance on the decision of Mumbai bench of Tribunal rendered in the case of Jetha Lal D Mehta (2 SOT 422) and other decisions rendered by the co-ordinate benches. 6. However, a perusal of the agreement entered by the assessee with the developer, which is titled as AGREEMENT (individual member agreement) FOR PERMANENT ALTERNATE AGREEMENT would show that the Society, in which the flat owned by the assessee was located, has obtained the land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also, in our view, does not support the submissions made by the assessee, since in the instant case, the assessee has given his old flat and in turn obtained a new flat plus compensation. As stated earlier, the Society was the lessee of the plot, in which the impugned flat was located. 9. In view of the foregoing, 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 asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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