TaxTMI 
TaxTMI 
TaxTMI 
2019 (8) TMI 615
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....deed of transfer' of TDR rights was in the nature of capital receipt not liable to income Tax. e. The capital asset transferred did not have any cost of acquisition and accordingly the gain arising on transfer of TDR was not assessable U/S. 45 of the Act. WITHOUT PREJUDICE TO THE ABOVE 2. The learned Commissioner of income Tax (Appeals) erred in riot assessing the income arising on receipt of consideration under the 'Deed of Transfer' dated 14.6.2004 as income under the head 'Long Term Capital Gains' 3. The learned Commissioner of income Tax (Appeals) erred in not granting deduction u/s. 54EC of the Act for the consideration Invested by the appellant In NABARD Capital gains Bonds 4. The learned Commissioner of Income Tax (Appeals) erred In charging Interest u/s. 234A, 234B, 234C and 2340 of the Act and having regard to the facts and circumstances of the case and In law the appellant denies his liability for payment of interest under the aforesaid sections. 2. At the time of hearing, the Ld. AR for the assessee, submitted that there is a delay of 658 days in filing appeal before the Tribunal, for which necessary petition for condonation in delay ....
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....ase of Ummer Vs. Pottengal Subida and others (supra), where in paragraph 17, the Hon'ble Supreme Court categorically held that the Hon'ble High Court should have taken liberal view in the matter and held the cause shown by the appellant as sufficient cause within the meaning of section 5 of the Limitation Act, and accordingly should be condoned, the delay in filing of the appeal. Therefore, considering facts and circumstances of this case and also taken support from the decision of Hon'ble Supreme Court in the case discussed hereinabove, we condoned delay in filing appeal and admit appeal for hearing. 5. The brief facts of the case are that the assessee is a individual, filed his return of income for AY 2005-06 on 20/07/2005 declaring total income at Rs. 1,04,510/-. The case was selected for scrutiny and during the course of assessment proceedings, the AO noticed that during the year under consideration, the assessee has computed Long Term Capital Gain from sale of TDR and accordingly, called upon the assessee to file necessary evidences including details of assets sold, cost of acquisition and proof for investment in NABARD Bonds to claim exemption u/s 54EC of the I.T.Act, 1961.....
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....ed from sale of TDR does not fall under the head capital gains, the question of giving benefit u/s 54EC of the I.T.Act,1961, for the said amount does not arise. The relevant findings of the Ld. CIT(A) are as under:- 2.3 I have considered the submissions of the Appellant and the asstt. order. It is an undisputed fact that the Transferable Development Rights (TDR) was not inexistence when the MOU dt 17.8*96 was made and also on the date when the subsequent transfer was made on 14.6.04. As such there was no capital asset on the date of the said MOU and the subsequent transfer made. The purported TDR which were transacted upon were never allotted by concerned Authorities. The Appellant had also not filed any materials to evidence that it had made a claim for allotment of TDR or that Its proposal is under active consideration of the concerned the paper book filed for the Appellant it could be seen that the Govt. has only allowed TDRs in respect of Slum Redevelopment Scheme in Pune and the case of the Appellant dogs not fall under the said scheme. Moreover, the TDR under Slum Redevelopment Scheme had been sanctioned only with effect from 5.08.04. In the case of the Appellant the prope....
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....Accordingly, the ground nos. 1 & 2 are dismissed. 3. The ground no.3 is that the Assessing Officer erred in not granting deduction u/s 54EC for the consideration invested by the Appellant in NABARD Bonds. 3.1 As I have held that the consideration received amounting to Rs. 25 lacs hits not falling under the head Capita! Gains, the question of granting deduction u/s 54EC for the said amount does not arise. Accordingly, this ground of appeal is rejected. 7. The Ld. AR for the assessee, at the time of hearing, submitted that the Ld. CIT(A) was erred in assessing surplus generated from sale of TDR as speculative profit without appreciating the fact that, when the asset was sold on 1996, the department has assessed surplus under the head capital gains. The Ld. AR, further submitted that right in TDR is a capital assets, because such right has been inextricable linked with the asset, which was acquired by the municipal corporation. Although, there is no TDR was allotted to the assessee, but the assessee had a right to acquire TDR in lieu of acquisition of land by the authorities. The said right has been transferred to the third party, for which necessary consideration has been pai....
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.... Ld. CIT(A) has altogether taken a different view and assessed surplus under the head speculative profits by taking note of provisions of section 43(5), for the reasons that the assessee is involved in repetitive transactions of buying and selling of TDR. Except this, the lower authorities had never disputed the fact that the assessee has transferred right in TDR to third party. In this factual back ground, if you examine, whether right in TDR is a capital asset and surplus from sale of such capital assets is assessable under the head capital gain, there is no doubt of whatsoever, with regard to the fact that TDR is a capital asset, because it is inextricably linked with immovable property and also flows from transfer of immovable property. When, TDR is considered to be an immovable property/assets within the meaning of section 2(14) of the I.T.Act, then any right in such TDR is also needs to be considered as a asset within the meaning of section 2(14) of the I.T.Act, 1961. Therefore, we are of the considered view that the Ld. CIT(A) was erred in considering surplus from transfer of TDR under the head speculative business profits. 10. Coming to the observations of the AO. The Ld.....