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TMI Blog2019 (7) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial property, when the Collaboration Agreement itself mandated the demolition of the existing structure at the expense of the buyer himself, thus leaving no residential property in existence. 2. Whether on the facts and in the circumstances of the case, the CIT(A) has erred in not appreciating the fact that as per the Collaboration Agreement what was sold was not any residential property, but at best only the right to retain the 'malba' of the old structure after demolition. 3. Whether on the facts and in the circumstances of the case, the 'malba' of the demolished structure qualifies as a long-term capital asset and a residential house within the meaning of section 54 of the Act. 4. Whether on the facts and in the circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. As per the collaboration agreement, the assessee would give a vacant possession of the property free from all encumbrances to allow the builder to demolish the existing structure and construct a building consisting of basement, stilt, ground floor, first floor, second floor and third floor with terrace. The entire cost was to be met by the builder from its own sources. The builder in turn would also pay to the assessee Rs. 5,50,00,000/- and retained entire second floor, entire third floor with terrace , proportionate share in the entire stilt area for car parking, use of common areas, facilities and services such as driveway, lift, use of staircase etc, proportionate undivided indivisible and impartible ownership rights in the plot of la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further submitted that the CIT(A) failed to appreciate the fact that even the entire second floor and the entire third floor sold by the assessee to the buyer builder in the new construction along with the proportionate share in the common areas and the plot of land would not qualify as long-term capital asset within the meaning of section 54 of the Act. The Ld. DR submitted that the CIT(A) has erred in allowing the claim of the assessee under the provisions of section 54 of the Act by completely overlooking that the case needed to be examined under the provisions of section 54F of the Act, as what was transferred was the proportionate right in the land, a long-term capital asset along with the right to 'malba', and the two newly construct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruction vide collaboration agreement dated 18.04.2012. The ld. AR further submitted that from the reading of the Clause of collaboration agreement it can be seen that what was transferred / handed over to the builder was the existing structure of the residential property. The builder demolished and redeveloped the old residential property into new residential building consisting of ground floor, 1st floor, second and third floor. What was lost was the entire existing structure it comprises residential house. The Ld. AR relied upon the decision of Hon'ble Karnataka High Court in case of Ved Prakash Rakhra [2013] 256 CTR 285 as well as the Jurisdictional High Court in the case of CIT vs. Gita Duggal [2013] 357 ITR 153 and CIT vs. Smt. K.G. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was transferred / handed over to the builder was the existing structure of the residential property. The builder demolished and redeveloped the old residential property into new residential building consisting of ground floor, 1st floor, second and third floor. Thus, the assessee lost all rights upon the entire existing structure which comprises residential house. The reliance upon the decision of Hon'ble Karnataka High Court in case of Ved Prakash Rakhra (supra) as well as Gita Duggal (supra) and CIT vs. Smt. K.G. Rukminiamma (supra) are apt in present case. By virtue of collaboration agreement, the assessee permanently lost the share beyond the 1st floor in the old residential property i.e. from 2nd floor onwards and in fact received th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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