9911796707
TMI Blog2012 (8) TMI 1198X X X X Extracts X X X X X X X X Extracts X X X X ..... see became entitled to TDR. On 5.8.2005 the assessee earned a sum of ₹ 91,99,992/- on sale of the said TDR. Expenditure incurred on development of the road was shown as part of the project and the income on sale of TDR was credited to work-in-progress account which had effect of reducing the total expenditure incurred till the end of the year, on the project under development. 2. During the course of scrutiny assessment for assessment under consideration the Assessing Officer was of the opinion that the sale proceeds of the TDR is liable to be taxed under the head "capital gains". In response to the show-cause notice the assessee submitted that it had incurred a sum of ₹ 80,78,775/- towards road development which incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as business receipt. Detailed arguments were advanced before learned CIT(A) and reliance was placed upon the decision of Hon'ble Apex Court in the case of Bokaro Steel Ltd. Vs. CIT (236 ITR 315) and orders of ITAT, Mumbai & Delhi Benches to submit that the sale proceeds of TDR deserves to be reduced from work-in-progress. 5. Learned CIT(A) accepted the plea of the assessee and in this regard he observed as under :- 3.3 I have carefully considered the facts of the case. The appellant was earlier known as M/s. Jupiter Shares and Securities P. Ltd. Originally, the appellant and M/s. Patel Builders and Developers, Mr. Anand Ramchandra Naik, sole Proprietor of M/s. Anand Construction Co., Rohan papers Ltd. and M/s. Wooden-Box Man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n FSI/TDR which may be available at any time shall proportionately belong to plaintiff No. 2, defendant No. 2 (appellant) and defendant No. 3. Since the plot was belonging in the name of the Society, therefore, the Municipal Corporation allotted TDR in the name of the Society M/s. Wooden-Box Manufacturers. As per the consent Terms, the Society transferred the same to the appellant. The appellant sold the said TDR in the open market and adjusted the sale proceeds against the work-in-progress. The question for consideration is whether the sale proceeds of the said TDS were assessable separately under the head capital gains as done by the Assessing Officer or the said sale proceeds was required to be reduced from the work-in-progress as claime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital gains'' and in the alternative it is assessable under the head "profit and gains of business or profession''. A petition was also filed under rule 27 of the Appellate Tribunal Rules to support the stand taken by the assessee before learned CIT(A). 7. Learned Departmental Representative strongly relied upon the order passed by the Assessing Officer whereas learned counsel for the assessee submitted that the company followed project completion method. In the instant case, as part of the package of development of project, assessee had to develop the road and hence it has direct nexus with the main project and allotment of TDR was only on account of development of the said road which, in turn, was incidental to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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