TMI Blog2020 (4) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... d constructed the building and subsequently by virtue of Regulation 33(7) of the Development Control Regulations of the Municipal Corporation of Greater Bombay, 1991 (DCR). The assessee became entitled to the additional FSI. The assessee nowhere incurred any cost for the execution of the additional FSI, therefore, the consideration nowhere considered as short/long term capital gain. This controversy has also been adjudicated by Hon ble High Court in the case of CIT-18 Vs. Sambhaji Nagar Co-operative Hsg Society Ltd [ 2014 (12) TMI 1069 - BOMBAY HIGH COURT] . Thus finding of the CIT(A) is not justifiable, therefore, we set aside the same and delete the addition - Decide issue in favour of the assessee. - I.T.A. No.2526/Mum/2019 - - - Da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details were called. On perusal of the registered sale-deed it was observed that the assessee has received the consideration of ₹ 3,18,54,500/- on transfer of development rights to the developers. The stamp duty was also paid for the consideration of fair market value of ₹ 3,19,64,000/-. The assessee has given the developing right to the housing society. The AO observed that the assessee has violated the provisions of Section 50C of the I. T. Act, 1961, therefore, notice was given and after the reply of the assessee short term capital gain in sum of ₹ 3,07,86,423/- was assessed as income of the assessee. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who partly allowed the claim of the assessee but decl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etter dated 12.09.1972 registered with the sub-registrar of Bombay. The society constructed the 36 residential flats for its members. The building became old, therefore, society wanted to re-develop the building. The assessee executed agreement dated 05.10.2010 and supplementry agreements dated 22.06.2011 and 20.10.2014 with one M/s. Hitesh Enterprises (Developers) for re-development of the existing building on the said property. According to agreement, the society had already consumed FSI 1.00 available to the Society as per the original purchase agreement in 1972. The society was entitled to additional FSI 1.00 due to change in Development Control Regulations in 1991. Regulation 33(7) of the Development Control Regulations of the Municipa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concept of TDR (Transfer Development Right), as noted by the Assessing Officer on p. 9 of the order was introduced in Mumbai in the Development Control Rules, 1991 of the Bombay Municipal Corporation. These rights are given in the form of a Development Right Certificate (DRC) which is issued by the municipal corporation. TDR means the development potential the FSI of a plot of land is separated from the plot and is allowed to be transferred. TDR can be used by the person/owner/lessee in whose favour it is granted on his land in the receiving zone. He can use it fully or partly or sell it fully or partly at will. Adverting to the facts of the case, we find that the assessee became entitled to the additional FSI of around 11,000 sq. ft. due t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brated case in CIT v. B.C. Srinivasa Setty [1981] 128 ITR 294 has held that transfer of capital asset which does not have any cost of acquisition does not result into capital gains chargeable to tax under section 45. This judgment has been followed in numerous cases. The legislature in its wisdom brought out certain categories of capital assets under section 55(2) as having cost of acquisition at Rs. nil, where such assets have not been purchased by the assessee for consideration. The effect of this sub-section is that when the assets so specified in sub-section (2) of section 55 are transferred, then the cost of acquisition has been taken at Rs. nil except where the assessee had acquired such assets by means of purchasing from the previous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that it has no cost of acquisition. Our view is fortified by the abovereferred order of the Mumbai Bench of the Tribunal in Jethalal D. Mehta ( supra) which was also cited before the learned CIT(A). No material has been brought to our notice to show that the said order has been modified or reversed by the Hon'ble High Court. Further the learned Departmental Representative could not point out any contrary decision. Respectfully following the precedent, we accept this ground of appeal. 6. The learned Authorised Representative did not press other grounds of appeal, which are hereby dismissed. 5. The facts of the present case is quite similar to the facts of the case discussed above i.e. New Shailaja Co-operative Housing Societ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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