TaxTMI 
TaxTMI 
2014 (3) TMI 324
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.... Ld CIT(A) erred in accepting the cost of acquisition as above ignoring the finding of the Al) which was based on the agreement between the assessee and contractor dated 26. 06. 1994. 4. The appellant prays that the order of Ld. CIT(A) on the above grounds he reversed and that of the assessing officer be restored. 5. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary ITA/3856/M/2011: Assessee had filed following grounds of appeal: 1. The learned Commissioner of Income Tax ought to have allowed indexation from the year 1990 onwards, i. e. date from which the Appellant entered into Agreement for Sale with owners of plot and got the possession of this plot. 2. The Appellant prays to allow the indexation of the capital gain from the year 1990 as the Agreement for Sale and possession of the land was with Appellant from the year 1990 and recalculate the long term capital gain on transfer and use of FSI. 3. The Appellant crave, leave and later any of the ground of appeal at later stage. Assessee has also filed Additional grounds of appeal and same read as under:- 1. The Ld. CIT(A) erred in considering capital receipt which is not ch....
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....loper as per the consent terms dated 08. 10. 2001. He took cost of acquisition at Rs. Zero. Determining the sale consideration he stated that the assessee had received Rs. 75 lakhs, that the receipt of sum was termed compensation for delay in executing project by the assessee, that the MOU entered into by the assessee did not talk about payment of compensation on account of delay, that the assessee was calling the sum received penalty/gesture of goodwill, that both the terms were contradictory, that it had received Rs. 75 lakhs towards surrender of rights of. 0. 25 FSI and use of additional TDR, that it was wrongly claiming said sum as capital receipt, that amount in question was sale consideration on surrender of flats, permission to use additional FSI and TDR. 3. Assessee preferred an appeal before the First Appellate Authority(FAA). It was contented before him that amount received by the assessee, i. e. Rs. 75 lakhs, was a capital receipt and should not have been taxed. After considering the submissions of the assessee and the assessment order, she held that by development agreement dated 26. 06. 1994 the assessee had entered in to a contract to sell . 075 FSI available to it, ....
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....t the receipt of Rs. 75 lakhs was not taxable being exempt from tax on the ground of principle of mutuality was infructuous, that the assessee had the right to be a consenting party for the balance flats 51 flats constructed by the contractor who purchased FSI from the society, that as per the terms the flat purchaser had to be made member in the society consequent to purchase of a flat from contractor, that the amount of Rs. 75 lakhs received from the flat purchasers by the contractor as premium aggregating to Rs. 75 lakhs could not be said as reimbursement made by society member against the payment made by the contractor at Rs. 75 lakhs as goodwill gesture cum compensation in the name of contribution towards corpus fund of the society, that the payments were not made by the members of the society to the society corpus but by the flat purchasers to the contractor, that it was incidental that they had to be made members of the society subsequently, that it was not in the nature of the amount charged as transfer fee by the society from its members. 4. Before us, Departmental Representative(DR) submitted that assessee had received Rs. 75 lacs, that the MOU referred to by the assesse....
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....t was argued that indexation of the capital gains should be taken from the year 1990. 5. We have heard the rival submissions and perused the material before us. We find that Raj Kapoor and the assessee-society, formed by the BARC and DAE Scientist, had entered into an agreement on 04. 10. 1983 to give a plot of land to proposed society, that in June 1988 Raj Kapoor passed away and his wife inherited the rights to the property, that in February 1990 and agreement was signed between the proposed society and Krishna Kapoor, wife of late Raj Kapoor, that in 1994 society and the developer signed an agreement, that there was dispute between the society and the developer which was resolved in the year 2001, that due to change in rules assessee was granted FSI of 0. 25 initially and same was finally increased to FSI of 1, that the assessee was paid Rs. 75 lakhs by the developer for surrender of additional FSI of 0. 25, that the assessee had paid taxes on it and had filed return reflecting the same as capital gain, later on it was argued that the receipt had to taken as capital receipt and not taxable, that the AO rejected the claim of the assessee, that in appellate proceedings FAA held t....