TMI Blog2010 (4) TMI 882X X X X Extracts X X X X X X X X Extracts X X X X ..... of any other capital asset, vide his order dated 6-8-2008. 2. The facts apropos the issue are that the assessee-company is engaged primarily in the business of real estate development. The assessee-company filed return of income on 31-12-1999 for the assessment year 1999-2000 admitting total loss of Rs. 9,01,383. Initially the return was processed under section 143(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act" for short), but subsequently the Assessing Officer took action under section 147 read with section 148 of the Act. The asses-see had claimed a sum of Rs. 41,51,175 under the head "cost of acquisition of development rights". The Assessing Officer proposed to disallow this claim but to allow depreciation by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e development rights acquired by the assessee are so intrinsically linked to the stock-in-trade in the form of built-up space in the assessee s business and such development rights also get extinguished when the built-up space is sold by the assessee-company. So, he held the expenditure in question as revenue as against cost of acquisition of any other capital asset as held by the Assessing Officer. Now the revenue is aggrieved. 3. We have heard the rival submissions and have carefully gone through the record. In so far as the facts of this case are concerned, there is no dispute between the parties. The learned Departmental representative has tried to elaborate the grounds raised in the appeal but the learned authorised representative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee-company. In the decisions relied on by the Assessing Officer, the facts are entirely different. In those cases, the commercial rights acquired by the assessees were not the subject-matter of space and no part of those commercial rights were ever extinguished during the course of trading operations carried on by those assessees. The development rights do not take their colour from the terms used in section 32(1)( ii ) as has been stated above. The development rights are intrinsically linked with the stock-in-trade in the form of built-up area in the assessee s business which get extinguished when the built-up space is sold by the assessee-company. Therefore, in our opinion also, the.cost of acquisition of development rights are in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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