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TMI Blog2010 (11) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... he along with her husband owned a plot of land in Juhu admeasuring 1005 sq. yards. The assessee and her husband owned half share each over the said property. The aforesaid property was plot No.8, Greater Bombay CHS Limited. The assessee and her husband were leasee for 999 years and the aforesaid property having taken the property on lease in July 1972. In the year 1985, assessee and her husband had constructed a residential building over the plot of land. On 26.2.2005, the assessee and her husband entered into a development agreement with a developer for developing aforesaid property. As per the agreement, developer was to demolish the existing building and construct a new building. The Permissible FSI over the plot of land owned by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, whole arrangement between the assessee and her husband on the one hand and development was to enable developer to bring marketable TDR and utilize the same on the plot of land owned by the assessee and her husband. The developer no doubt was entitled to sell marketable TDR which he had by putting up construction over the plot of land owned by the assessee and her husband; but the developer could not convey any right, title or interest over the plot of land in favour of the third party purchaser. The Assessing Officer therefore concluded that there was no transfer within the meaning of section 45 of the I.T. Act. He therefore held that receipts by the assessee from the developer was income from other sources and he accordingly brought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- paid by the builder i.e. Rs.1,09,17,500 Less: Half share in the cost of construction of 11,835 sq.ft. at Rs.1000/- per sq. ft. Rs.59,17,500 Capital Gain Rs.50,00,000 Investment of Rs.50,00,000/- in NABARD Bonds claimed exemption u/s. 54EC of the Act. 6. According to the Revenue since the newly constructed building given to the owners of the property, namely 11,835 sq.ft., was spread over 5 floors i.e. 1st to 4th floors and 9th floor, the same cannot be said to be investment of Capital Gain in "a residential house". In this regard the Revenue has referred to the provisions of sec.54(1) in the Miscellaneous Application as under: 54.(1)Subject to the provisions of sub-section (2), where, in the case of an assessee bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been submitted that assessee has not given any proof showing that the entire area of 11835 sq.ft., allotted to it by the developer is "a residential house". It has also been submitted that since the Assessing Officer considered the entire receipt on transfer of development and rights as "Income from Other Sources" and not under the head of income "Capital Gain", he did not consider the question as to whether entire area of 11,835 sq.ft., constituted, "a residential house" entitled to exemption u/s.54 of the Act. The revenue has therefore, prayed that the order of the Tribunal should be modified and the exemption u/s.54 of the Act should be restricted to one unit/flat of assessee's choice and the balance amount should be brought to the tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le issue or an issue on which two views are possible it cannot be said that there was a mistake apparent on the face of the record within the meaning of sec.254(2) of the Act. It was also submitted that the assessee at the time of hearing had raised an issue that any receipt of money on transfer and development rights is a capital receipt not chargeable to tax and in this regard the assessee had relied on the decision of the Mumbai Bench of the Tribunal in the case of M/s. Amber Craft Cooperative Housing Society Ltd. vs. ITO, ITA No.5697/Mum/2006 Assessment Year 2002-03 wherein it was held that there can be no cost of acquisition of Transfer of Development Right (TDR) and therefore it is not possible to compute capital gain and therefore th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) found that the correct head under which the income from sale of TDR has to be assessed is Capital Gain he also found that the claim for deduction u/s.54 and 54EC as made to the assessee was correct. In the grounds filed by the Revenue before the Tribunal, the Revenue has taken a specific plea that the CIT(A) erred in allowing the deduction u/s.54 and 54EC of the Act. When the appeal was originally heard the Revenue did not raise any argument as to why the deduction u/s.54 can not be allowed to the assessee. It was for the first time by this Miscellaneous Application that the Revenue has sought to raise a plea that the conditions for allowing deduction u/s.54 were not satisfied. In our view such a stand cannot be allowed to be raised for t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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