2008 (12) TMI 442

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....e learned CIT(A) has erred in confirming the view of the learned Assessing Officer that no cost no capital gains theory is not applicable to the applicant's case." 3. Briefly stated, the facts of the case are that the assessee is co-operative housing society and had acquired land in the year 1972 along with building thereon constructed by use of FSI of approx. 11,000 sq. ft. By virtue of enactment of the Development Control Regulations Act, 1991, the assessee became entitled to an additional FSI of around 11,000 sq. ft. The assessee sold such entitlement right to M/s. D.K. Builders for a consideration of Rs. 48,96,225. The Assessing Officer called upon the assessee to show cause as to why the income on TDR should not be treated as advent....

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....y 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 to its land holding. The assessee transferred this entitlement for a consideration of Rs. 48.96 lakhs to M/s. D.K. Builders. Before the authorities it was contended on behalf of....

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....le 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 owner and the computation of the capital gains would be done accordingly. There is a difference in the situation when cost of acquisition is Rs. nil and where the cost of acquisition canno....