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Shri Chandrashekhar J. Bahirwani Versus ACIT-19 (3) , Mumbai

2015 (6) TMI 1061 - ITAT MUMBAI

Transfer of TDR - Long term capital gain OR Income from other sources - levy of capital Gains Tax on society - Held that:- The assessee cannot be burdened with the taxes which he otherwise is not liable to pay under the law. Even a duty has also been cast upon the Income Tax Authorities to charge the legitimate tax from the tax payers. They are not there to punish the tax payers for their bonafide mistakes. In view of our above observations, it is held that the assessee is not liable to pay Capi .....

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not be subjected to Capital Gains Tax . The said receipt therefore can not be taxed even under the head ‘Income from other sources’. - Decided in favour of assessee. - ITA Nos. 7810/M/2010 & 6599/M/2012 - Dated:- 17-6-2015 - SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER Assessee by : Shri Vipul Joshi, A.R. & Abhishek Tilak, A.R. Revenue by : Shri Jeetendra Kumar, D.R. O R D E R Per Sanjay Garg, Judicial Member:

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ee has taken the following grounds of appeal: 1.1 The Learned CIT (Appeals)-30 erred in dismissing the appeal of the appellant as not maintainable. 1.2 On merits, the learned CIT (Appeals) erred in confirming the action of A.O. in taxing ₹ 14,50,000/- as long term capital gain in the hands of the appellant. 1.3 Your appellant craves permission of the Honourable Appellate Tribunal to add to alter, to amend or to delete any ground of these appeals.

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hands of the assessee. The AO, however, assessed the returned income and thereby also taxed the capital gains. The assessee preferred appeal before the Ld. CIT(A). 3. It had been contended before the Ld. CIT(A) that the sum of ₹ 14,50,000/- had inadvertently been shown as long term capital gains in the return of income and the same was therefore wrongly offered for taxation. The assessee had received the said amount from his housing society namely Land Bridge Co-operative Housi .....

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onfirmed the levy of capital gains tax against the society. It was therefore claimed that the said amount was not taxable in the hands of the assessee. The Ld. CIT(A), however, observed that the assessee himself had voluntarily offered the said amount as capital gains. The AO has not noted in the assessment order that the taxation on the said capital gains was contested by the assessee. The Ld. CIT(A) thereafter observed that the assessee, if, was of the view that he had mistakenly offered the i .....

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of the CIT(A), the assessee has come in appeal before us. 4. We have heard the rival contentions. At the outset the Ld. AR of the assessee has submitted that the matter in relation to levy of capital Gains Tax on society had been taken to the Income Tax Appellate Tribunal by the society. The Tribunal vide order dated September 14, 2012 reported as (2013) 21 ITR Trib. 467 (Mum.) held that though the transferrable development right amounts to transfer of capital asset by the .....

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igh Court vide order dated 11.03.2015 passed in ITA No.334/2013 styled as CIT vs. Land Bridge Co-operative Housing Society Ltd. while relying upon the another decision of the Hon ble High Court in the case of CIT vs. Shambaji Nagar Co-operative Housing Society Ltd. 370 ITR 325 upheld the order of the Tribunal. It is pertinent to mention here that from the facts it emerges out that the compensation/consideration was paid by the builder to the society and its member on transfer of TDR, .....

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le Bombay High Court has already held in the case of the society that the said receipt in lieu of transfer of TDR rights can not be subjected to capital Gains Tax, hence, the same analogy will also apply to the case of the assessee and no different treatment can be given to the amount received by the assessee because the same was received by way of a common agreement on the basis of which the court has passed the decree determining amount receivable by the society and its members individually.

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tion will apply in the case of the assessee also. Respectfully following the decision of the Hon ble Bombay High Court, it is held that the TDR receipts in the hands of the assessee are not taxable. 5. Now coming to the finding of the Ld. CIT(A), that income cannot be assessed less than the returned income, the Ld. A.R. of the assessee has submitted before us that the action of the Ld. CIT(A) in rejecting the claim of the assessee on this ground was not justified. He has further relie .....

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or to dispose of a particular case in a particular manner as well as not to interfere with the discretion of the Commissioner in exercise of his appellate functions. It was further held that the AO, while exercising his quasi judicial powers, was not bound by the said circular and should have exercised his powers independently. The Hon ble High Court, therefore, directed the AO to make the assessment without keeping in mind the said circular. It may be further observed that the Hon ble Bombay Hi .....

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ourt in the case of Goetze (India) Limited v. CIT (2006) 157 Taxman 1, relating to the restriction of making the claim through a revised return was limited to the powers of the Assessing Authority and the said judgment does not impinge on the power or negate the powers of the appellate authorities to entertain such claim by way of additional ground. Even otherwise, the Ld. CIT(A) ought to have considered the claim of the assessee in exercise of his appellate jurisdiction under section 250 of the .....

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