TMI Blog2008 (12) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... - We find that the assessee became entitled to the additional FSI of around 11,000 sq. ft. due to its land holding. The assessee transferred this entitlement for a consideration to M/s. D.K. Builders. The items of capital assets specified in section 55(2) are those for which the cost of acquisition shall be taken at Rs. nil for computing capital gains. However if the assessee had not incurred any cost of acquisition on a capital asset and such capital asset does not fall in the category of the capital assets specified in section 55(2) then the judgment of the Hon ble Supreme Court in B.C. Srinivasa Setty [ 1981 (2) TMI 1 - SUPREME COURT] shall apply and no capital gains would be charged. It is abundantly clear that the assessee had no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has been argued by the learned Authorised Representative reads as under : "On facts and circumstances of the case and in law the learned CIT(A) has erred in confirming the view of the learned Assessing Officer that no cost no capital gains theory is not applicable to the applicant s case." 3. Briefly stated, the facts of the case are that the assessee is co-operative housing society and had acquired land in the year 1972 along with building thereon constructed by use of FSI of approx. 11,000 sq. ft. By virtue of enactment of the Development Control Regulations Act, 1991, the assessee became entitled to an additional FSI of around 11,000 sq. ft. The assessee sold such entitlement right to M/s. D.K. Builders for a consideration o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opment Right), as noted by the Assessing Officer on p. 9 of the order was introduced in Mumbai in the Development Control Rules, 1991 of the Bombay Municipal Corporation. These rights are given in the form of a Development Right Certificate (DRC) which is issued by the municipal corporation. TDR means the development potential the FSI of a plot of land is separated from the plot and is allowed to be transferred. TDR can be used by the person/owner/lessee in whose favour it is granted on his land in the receiving zone. He can use it fully or partly or sell it fully or partly at will. Adverting to the facts of the case, we find that the assessee became entitled to the additional FSI of around 11,000 sq. ft. due to its land holding. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty [1981] 128 ITR 294 has held that transfer of capital asset which does not have any cost of acquisition does not result into capital gains chargeable to tax under section 45. This judgment has been followed in numerous cases. The legislature in its wisdom brought out certain categories of capital assets under section 55(2) as having cost of acquisition at Rs. nil, where such assets have not been purchased by the assessee for consideration. The effect of this sub-section is that when the assets so specified in sub-section (2) of section 55 are transferred, then the cost of acquisition has been taken at Rs. nil except where the assessee had acquired such assets by means of purchasing from the previous owner and the computation of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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