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2014 (7) TMI 293 - AT - Income TaxLTCG on sale of addition FSI/TDR in the society - transfer of right – determination of cost of acquisition - Held that:- Following Late Smt. Jamnabai Anandji Matani, L/h Shri Bhupendra Matani Versus Income Tax Officer [2010 (4) TMI 1017 - ITAT MUMBAI] - the expenditure incurred on purchase of plot and construction cannot be said to be the costs for acquisition of these rights - The rights are acquired by the virtue of being owner of the plot in the specified area but that does not mean that the cost incurred on the plot is the cost of acquiring these rights - The effect of the rights being relatable to the leasehold rights in the plot could at best be that the amount received by the assessee on assignment of rights to receive the transferable development rights ends up reducing effective cost of acquisition of the land and building in the said plot - as and when the assessee transfers the said plot, building or any portion thereof and while determining capital gains arising on such sale, the cost of acquisition may stand reduced by the amount received by the assessee on assignment of rights to receive the TDRs. What the assessee has transferred is not the plot or the building, but a right parting with which does not result in parting with land or building - The costs of obtaining BMC approval for the building plan can also not be said to be the costs of acquisition of these rights as these rights do not arise by the virtue of getting these approvals but by the virtue of a legal right in dependent - when an asset has no cost of acquisition, the gains on sale or transfer of same cannot be brought to tax - the receipts on sale of assignment of rights to receive TDRs are not liable to tax – thus, the order of the CIT(A) is upheld in deleting the addition of ₹ 22,49,203/- made by the AO on account of long term capital gain arising from the sale of additional FSI/TDR – Decided against Revenue.
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