Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 2298 - AT - Income TaxTransfer of the property by way of distribution of assets on retirement of two partners - LTCG or STCG - assessee contended that what has been transferred to the retiring partner is 50% of the FSI retained by the assessee firm which would naturally result into a LTCG to the firm - Held that:- What was available with the assessee after transfer of land under DA is only 50% of the land along with FSI available on the said 50% of the land. Accordingly, we find that the AO was not justified in considering FSI available on the entire land comprising of 50% portion which was already transferred under the DA and has already been subjected to capital gains for the assessment year 2006-07. As decided in the case of Citibank (2003 (4) TMI 92 - BOMBAY High Court) the land is an independent and identifiable asset and it continues to remain so even after construction of the building thereupon. Therefore, the land even if it is owned by the assessee for more than 36 months, it will be a long term capital asset and the gain arising there-from it will be a LTCG. Thus, the Hon’ble High Court has held that if there is a construction on the land which is a depreciable asset then the land and building has to be bifurcated and the super structure has to be treated as STCG and the land will be treated as LTCG. Similar view has been taken in the case of Hindustan Hotel Ltd. (2010 (10) TMI 16 - Bombay High Court). Accordingly, in view of the above facts and circumstances as well as the judgments of the Hon'ble jurisdictional High Court, we do not find any error or illegality in the order of the CIT(A) in allowing the claim of the assessee regarding capital gain as long term capital gain u/s 45(4) arising from the land retained by the assessee which was purchased in the year 1960. - Decided against revenue.
|