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2013 (9) TMI 475 - AT - Income TaxCapital gain - Cost of acquisition - Additional floor space index (FSI) - Taxability in the hands of Co. Group housing society (CGHS) - DRA required the developer to pay a sum of Rs. 3.05 crore as corpus fund to the society, additional sum of Rs. 1.50 crore in lieu of additional FSI and Rs. 30 lakh as additional benefit on account of reduction in area for the reason of road widening, nallah etc. Thus, the society was to receive the total of 4.85 crore from the builder in terms of the agreement. - Assessee has argued that assessee retaining the complete control over the property and having not handed over the possession, there could not be any transfer u/s 2 (47) (v). - assessee has also argued that the capital gain that can be charged is only in respect of transfer of additional FSI to which the assessee was entitled. The assessee had not transferred nor was required to transfer the land of which the assessee was absolute owner and the building occupied by the members. The transfer could take place only in respect of additional FSI which the assessee had acquired as per the Government policy and there was no cost of acquisition involved. Therefore, it has been argued that no capital gain can be charged in such a case in view of the judgment of Maheshwar Prakash-2 Co-operative Housing Society Ltd. Versus Income-tax Officer, Ward 19(2)(4) [2008 (5) TMI 455 - ITAT MUMBAI] Held that:- The argument of assessee is supported by the decision of Mumbai bench of Tribunal in case of Jetha Lal D Mehta (2005 (1) TMI 595 - ITAT MUMBAI) and ACIT Vs. Geeta Devi Pasari (2006 (6) TMI 138 - ITAT BOMBAY-F) - the assessee retained full control over the existing building as well as the additional FSI available which had not been parted with. The assessee had received only a sum of Rs. 1.10 lakh from the developer which is stated to be reimbursement of expenses incurred by the assessee. In these circumstances we are of the view that no transfer had taken place in the year under consideration and, therefore, no capital gain can be charged in this year. The additional FSI became available to the assessee due to operation of development control regulation which did not involve any cost. - no capital gain could be charged on the ground that no cost of acquisition was involved in the additional FSI. - Decided in favor of assessee.
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