High Court upholds Tribunal's decision on excluding TDR/FSI value from capital gains calculation The High Court of Bombay dismissed the Revenue's appeal, affirming the Income Tax Appellate Tribunal's decision not to include Transfer of Development ...
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
High Court upholds Tribunal's decision on excluding TDR/FSI value from capital gains calculation
The High Court of Bombay dismissed the Revenue's appeal, affirming the Income Tax Appellate Tribunal's decision not to include Transfer of Development Rights (TDR) / Floor Space Index (FSI) value in the computation of capital gain. The court held that since the assessee had only transferred reversionary right in the lease land without incurring any cost of acquisition for the additional FSI, the gains derived should not be assessed as capital gains. The court emphasized the need for a specific provision to determine the cost for computing capital gains in such cases, supporting the Tribunal's decision based on legal provisions and previous analyses.
Issues: 1. Inclusion of TDR/FSI value in the computation of capital gain.
Analysis: The High Court of Bombay heard an appeal filed by the Revenue challenging the decision of the Income Tax Appellate Tribunal regarding the inclusion of TDR/FSI value in the calculation of capital gain. The main question before the court was whether the ITAT was correct in including the TDR/FSI value in the computation of capital gain when the assessee had only transferred reversionary right in the lease land. The court referred to a previous decision dated 11th December, 2014, where it was held that an asset capable of acquisition at a cost falls under the provisions of "Capital gains." In this case, the FSI/TDR was generated by the plot itself without any determined cost of acquisition, leading to the conclusion that the gains derived should not be assessed as capital gains. The court emphasized the necessity of a specific insertion to ascertain the cost for computing capital gains in such cases. The Tribunal's decision was supported by its analysis in other cases, where it was established that the additional FSI/TDR was not a sale of development rights already embedded in the land owned by the assessee. The court highlighted that the assessee did not incur any cost of acquisition regarding the additional FSI, and the legal position as per section 55(2) and the Supreme Court's judgment supported the Tribunal's conclusion. Consequently, the court dismissed the appeal, affirming the Tribunal's decision.
Full Summary is available for active users!
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
of 
TaxTMI 
