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2020 (3) TMI 1166
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....umstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 3,09,68,0287- on sale of Transfer Development Rights (TDR) of Rs. 3,09,68,0287- as long term capital gains by applying the ratio laid down by the Hon'ble Bombay High Court's decision in the case of Sambhaji Nagar Co-op. Hsg. Society Ltd. (No. 1356 of 2012 dated 11.12.2014) without appreciating the fact that the facts of the present case are different from the facts of the case of Sambhaji Nagar Co-op. Hsg. Society. 3. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 3,09,68,0287- on sale of Transfer Development Rights (TDR) of Rs. 3,09,68,028/- as long term capital gains without considering the decision of the Hon'ble Supreme Court in the case of A.K. Krishnamurthy vs. CIT 43 Taxman 30(SC) quoted by the AO in the assessment order. 3. Grounds of appeal raised by the assessee read as under :- "The Appellant objects to the order dated 13 September 2017 (received on 3 November 2017) passed by the learned Commissioner of Income- tax (Appeals)- 8 CIT(A), Mumbai under section 250 of....
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.... 2. Advances given to retrenched workmen 7,62,392 Advances given to workmen w/off as irrecoverable 3. Excess advance tax paid 16,99,730 Amount w/off after completion of assessment Total Advances w/off (B) 42,00,491 Total amount w/off (A) and (B) above 65,00,615 6. The Assessing Officer asked the assessee to furnish names and address of the debtors, efforts taken to recover the debts, when it was treated as income and other details in respect of write off of bad debts. In response the assessee submitted that the bad debts are on account of write off of disputed receivables not finally received and advances written off. Apart from this the assessee did not furnish any evidences to show that the amount was treated as income in any of the previous years. The assessee further submitted that they are not required to show that the debts have become bad. Thereafter the Assessing Officer referred to the provisions of writing off of debts and made disallowance of Rs. 23,00,125/-. 7. In respect of advances written off the Assessing Officer noted that whether the advances were made in the due course of business has ....
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....#39;ble Apex Course in the case of TRF Ltd. Vs. CIT (323 ITR 397). It was held in the said case that writing off of advances in the aforesaid account is sufficient compliance for provisions of the Act. However, in the present case, it was noted that the assessee has not furnished names of the debtors to the Assessing Officer, hence we remit this issue also to the file of the Assessing Officer if details of bad debts actually written off in the books are available the same is to be allowed as per ratios emanating out of the order of Hon'ble Supreme Court as above. 13. Apropos the issue of disallowance of deduction of Rs. 1,77,69,915/-. This issue relates to disallowance of Rs. 1,77,69,915/- in relation to expenditure incurred on fixing barricades while computing capital gains. Brief facts of the issue are as under :- The Assessing Officer asked to establish that the impugned expenditure related to improvement of land. The assessee submitted that the barricades were necessary to bifurcate the plot of land being assigned and facilitate handing over possession of the same for effecting the transfer of leasehold rights. At para 7.3 the Assessing Officer observed, "The conte....
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.... was not necessary to incur the expenditure for barricade as the same was earmarking the unsold remaining plot. Here we find that the Assessing Officer has totally erred in concluding that there was no necessity for the assessee to incur such expenditure in connection with transfer of such property. The Assessing Officer is writing that this expenditure in nothing but to protect the remaining land from encroachments, etc. Here we fail to understand as to how identification and demarcation of land to be sold and land remaining unsold can be held to be not necessary and the same can be attributed only to remaining plot. Further learned CIT(A) has also held that he cannot imagine as to how erection of the barricades can be considered as resulting in any improvement in the plot of land. He further held that every plot of land is demarcated in land records of the concerned authorities. This observation of learned CIT(A) is totally in contradiction of the Assessing Officer's observation who writes that this expenditure in nothing but to protect the remaining land from encroachments, etc. Hence, in our considered opinion both the authorities are making contradictory remarks only based upo....
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....n wherein the judicial authorities have upheld the view that on sale of TDR is not taxable as the computation mechanism fails. * Jethala D. Mehta vs. DCIT (2005) 2 SOT 422 * JTO vs. Lotia Co. Op. Hsg. Soc. Ltd. (2008) 12 DTR (Mum.) Tub. * New Shailaja CHS vs. JTO JTA No.512/M/2007, Bench B, dtd.02-12-08 (Mum.) * Maheshwar Prakash Co.Op. Hsg. Soc. Ltd. vs. ITO (2009) 121 TTJ Mumbai 641 Further, while calculating the Minimum Alternate Tax (MAT), on book profit, the company has considered profit on sale of TDR as not taxable. Reliance in this connection is placed on the decision in case of Frigsales (India) 4 SOT 376 wherein Hon'ble Mumbai Tribunal has upheld the view that capital gains which is exempt as per the provisions of Income-tax Act, is not in the nature of income and it cannot be taxed under the provisions of section 115JA of the Act. Applying the same analogy, under the facts of the case, the profit on sale of TDR has been excluded from Book Profits for computing MAT. " 19. From the above the Assessing Officer observed that it is the contention of the assessee that receipt on sale of TDR is on surrender of land in earlier ....
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....he Hon'ble Supreme Court decision in the case of A.K. Krishnamurthy vs. CIT 43 Taxman 30 (SC), wherein it was held as under: [1989] 43 TAXMAN 30 (SC) SUPREME COURT OF INDIA A.R. Krishnamurthy v. Commissioner of Income-tax N.R.S. PATHAK, CJ. M.N. VENKATACHALIAHANDKVLDIPSINGH, JJ. CIVIL APPEAL NO. 2717 OF 1985 FEBRUARY 10,1989 Section 45, read with section 48, of the Income-tax Act, 1961 - Capital gains -chargeable as - Assessee granted a mining lease of its land for ten years to an allied concern and lessee had to pay a salami in addition to royalty - Whether there was a transfer of capital asset resulting in assessable capital gains - Held, yes - Whether value of leasehold rights in cost of acquisition of land was determinate and, therefore, computation provisions were applicable - Held, yes 8.5 In view of the above, the sale proceeds on transfer of TDR is taxable under section 48 of the Act as long term capital gain, by considering the cost of acquisition as Nil. Accordingly, the capital gain is computed as under: Total sale consideration Rs. 3,09,68,028 Less: Cost of acquisition Rs.______Nil Long term capital gain Rs. 3,09,68,....
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....e assessee had to surrender 27% of vacant plot area to MHADA for public housing/mill workers housing, in order to be able to sell the land to the said Dost/ Corporation. 6 Subsequently, during the financial year 2008-09, i.e. on 3 June 2008, as a result of surrender of vacant land (sewree unit) measuring to 1247 sq.mtr to MHADA (which portion was not sold to the said Dost/ Corporation because of the restriction) the assessee received TDK for 1659.63 sq.mtr in accordance with the Regulation 58 of OCR (a copy of the relevant regulations enclosed at Annexure. " 24. Upon careful consideration, we note that learned CIT(A) has passed a very laconic order. He has not at all referred to the facts of the case. He has simply held that the issue is covered by the decision of Hon'ble Bombay High Court in the case of CIT Vs. Sambhaji Nagar Co-op. Hsg. Society Ltd. (supra). On the other hand learned Departmental Representative has pointed out that the said decision is not at all applicable on the facts of the present case. We note that in the said decision of Hon'ble High Court, the assessee is a cooperative housing society. With promulgation of development control rules (DCR....