TMI Blog2003 (1) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee along with his father Sri Salchuddin Ahmed owned a land and building at Fancy Bazar, Hem Baruah Road, Guwahati, with 50 per cent share each. The area of the plot of land is 1456 sq.ft. and the floor area of the three storeyed building is 1165 sq.ft. The assessee along with his father had sold out the right to construct 3rd, 4th and 5th floors to different parties and during the year they have received total sale proceeds of Rs. 2,40,000 the assessee has offered Rs. 1,20,000 being 50 per cent of the sale-proceed of his share for taxation as long term capital gain treating the cost of acquisition of the asset so transferred at Nil. The Assessing Officer after examining the deeds of sale of height has come to the conclusion th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of a land or building allowed some other person to share the investment in the construction, the investor will enjoy the benefit of ownership of the building in proportionate to his investment. Accordingly the Assessing Officer was of the opinion that the amount received by the assessee is not the sale-proceeds of transfer of any asset but the consideration in money worth for the permission allowed to those parties to construct flats on the existing building and to enjoy the ownership of those flats with some conditions/limitations and accordingly the Assessing Officer declined to accept the assessee s claim of receipt of Rs. 1,20,000 as long term capital gain and added the same as income from other sources. 3. On appeal, the CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ten submissions : "1. That Sir, assessee had sold his right to construct 3rd, 4th 5th floors on 6-7-1995. It may be noted that the floors were note constructed and only the right to construct the same was transferred. 2. That Sir, it is not possible to conceive the cost of acquisition of the right to construct the floors and as such the same is not ascertainable. This is for the simple reason that the cost is incurred only after the floor is constructed, prior to that it is only a right for which cost cannot be conceived, what was sold is a vaccum and cost of vaccum cannot be conceived. 3. That Sir, while computing the "income from other sources" Assessing Officer is supposed to allow expenses incurred for earning the income from ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T [1985] 156 ITR 412 (SC); (4.1) B.C. Srinivasa Setty s case ( supra ) and has also drawn our attention towards page 251 of Chaturbedi Pithisaria, Vol.1, 4th edition. He, therefore, submitted that the order of the CIT(A) should be upheld. 7. We have carefully considered the submissions of the rival parties and perused the material available on record and the decisions relied on by the learned A/R of the assessee. We find that in this case the assessee and his father have transferred the capital assets including the extinguishment of rights therein to construct 3rd, 4th and 5th floors on the existing building for a sum of Rs. 2,40,000 of which the assessee was 50 per cent share-holder vide separate registered deeds of sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or not connected with his business or profession, but does not include - ( i )any stock-in-trade, consumable stores or raw materials held for the purposes of his business or profession; ( ii )personal effects, that is to say, movable (including wearing apparel and furniture, but excluding jewellery) held for personal use by the assessee or any member of his family dependent on him. ( iii )agricultural land in India with certain exceptions. From the combined reading of the above definitions of the capital asset and transfer we find that the assessee has transferred his capital asset or extinguished any rights therein in favour of the three purchasers vide registered sale deeds on which the assessee has also paid stamp duty at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the definition of capital asset it was held that the property of any kind held by the assessee is of such wide amplitude as to take in a intangible asset of this kind. Therefore, the view taken by the Hon ble Kerala High Court supports the Revenue s case. 11. In the case of Ahmed G.H. Ariff ( supra ) the expression "property" has been considered and it was held that the property is a term of Wide connotation. This also supports the Revenue s case. 12. The case in Prabhu Dayal ( supra ) is on compensation, therefore, it is not applicable to the assessee s case. 13. The case in Dr. K. George Thomas ( supra ) is on the burden, therefore the same is also not applicable here. 14. The case in B.C. Srinivasa Setty ( supra ) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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