TMI Blog2015 (10) TMI 2298X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. (20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in law, the Ld.CIT(A) erred in directing the Assessing Officer to restrict computation to the disclosed area of land and property under transfer, without considering the clause of supplementary agreement between the assessee and M/s K.Raheja Universal Pvt. Ltd. which clearly states that the owners have been allotted one of the two units on the ground floor and entire 1st, 2nd and 3rd floors of the new building constituting 50% of total super built up area. Further, in the development agreement also it is mentioned that the developer shall construct and hand over to the owners, free of cost commercial units having 50% of the super built up area. The appellant prays that the order of the CIT(A) on the grounds be set aside and matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve 50% of land and FSI and right to get the developed property from M/s.K.Raheja Universal Pvt. Ltd., to the retiring partners. Thus as per the provisions of sec.45(2), assessee offered long-term capital gains (LTCG) to tax on account of distribution of asset to retiring partners by considering 50% of the land and FSI as well as 50% share in the developed property to be received from M/s.K.Raheja Universal Pvt. Ltd. The AO recomputed the LTCG by taking into consideration super built up area and not the built up area and further AO treated the capital gain on account of 50% of the future FSI as short-term capital gain (STCG) as against LTCG offered by the assessee-firm. Apart from this, the AO also computed capital gain by considering the FS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of land under the DA. Accordingly, he directed the AO to re-compute the capital gain by allowing indexation on the cost w.e.f. 1/4/1981. The CIT(A) found that the AO was not justified in increasing area by 25% on the ground that super built up should be considered for the valuation as there was no provision in the IT Act to presume such percentage of area to be increased. Thus, the addition made by the AO was deleted. 5. Aggrieved by the impugned order of the CIT(A) the revenue has filed this appeal. 6. Before us, the learned DR has submitted that after the DA entered into between the parties, the assessee was no more the owner of the land but only having right to receive the super built up area upon the land transferred to the deve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee in computation of LTCG in respect of the land retained by the assessee along with FSI. He has specifically pointed out that only 50% of the land was transferred for development as per the DA dated 28/11/2005 and therefore, the AO was not justified in taking into consideration FSI over the entire land while computing the capital gain. He has relied upon the decision of the Hon'ble jurisdictional High Court in the case of CIT vs. Hindustan Hotels Ltd. (335 ITR 60) and CIT vs. Citibank (261 ITR 570) as well as the decision of this Tribunal in the case of ACIT vs. Jaimal K Shah (137 ITD 376)(Mum). Thus, the learned authorised representative of the assessee has submitted that only portion of the land was retained by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etained by the assessee along with available FSI was taken into consideration for the purpose of capital gain as per the provisions of sec.45(4). Thus, it is manifest from the record 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. 6.3 The Hon'ble jurisdictional High Court in the case of Citibank (supra) has held that the land is an independent and identifiable asset and it continues to r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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