Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2008 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2008 (5) TMI 455 - AT - Income TaxValidity of re-assessment proceedings under section 147 - Computation of Long-term capital gain (LTCG) u/s 48 - Cost of acquisition "Nil" - Right to construct additional floors was acquired by the assessee free of cost - Receive consideration against right acquired - Applicability of amended provisions section 55(2)(a). HELD THAT:- Assessee society acquired the right to construct the additional floors by virtue of DCR, 1991 which could not be available to assessee on expenditure of money. Prior to DCR, 1991, no society had any right to construct the additional floors. So it was not a tradable commodity. Suddenly by virtue of DCR, 1991, the right was conferred by the Government on the assessee. Such right exclusively belonged to the building owned by the society. It could not be transferred to any other building. Similarly, similar right belonging to other societies could not be purchased by assessee for the purpose of constructing additional floors in its own building. Therefore, such right had no inherent quality being available on expenditure of money and therefore, cost of such asset could not be envisaged. Hence, the view taken by us is fully justified by the decision of the Apex Court in the case of B.C. Shrinivasa Shetty [1981 (2) TMI 1 - SUPREME COURT]. Therefore, the right acquired by the assessee did not fall within the ambit of section 45 of the Act itself. The amended provisions are also not applicable since such right is not covered by any of the assets specified in section 55(2)(a) of the Act. Therefore, applying the decision of Apex Court in the case of B.C. Shrinivasa Shetty (supra) as well as the decision of the co-ordinate Bench in the case of Mehtal D. Mehta [2005 (1) TMI 595 - ITAT MUMBAI], the issue is decided in favour of the assessee. The order of the CIT(A) is, therefore, set aside and consequently, the AO is directed to delete the addition from the total income. Since the assessee succeeds on the main ground that receipt is capital receipt not chargeable to tax, we need not adjudicate the other issues raised by the assessee. In the result, appeal filed by the assessee is allowed.
|