TaxTMI 
TaxTMI 
TaxTMI 
2020 (3) TMI 1166
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....ied 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 the Income-tax Act, 1961 ('the Act') on the following grounds:- ....
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....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 not been properly evidenced. That whether advances were for purchase of any revenue item or capital item has not been furnished. That whether the advances are actually written off in the....
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....t 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 contention of the assesses in this regard is not tenable as it is not necessary for the assesses to make such arrangement for sale of plot of land, which is an expenditure incurred in connection with the earmarking the unsold lot i.e.,....
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....ture 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 upon their surmises. Learned CIT(A) has further erred in observing as to how barricades can improve the quality of land and cause to improvement of any kind. Here we find that as submitted by the assessee the barricades were necessary to earmark land to....
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....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 years and the capital gain on such transfer of land has already been offered by the assessee in the year in which transfer took place. He rejected the assessee's contention that since the cost of such TDR is nil, there is no capital gain. He noted that the assessee is having the ownership of the plot and on sale ....
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....89 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. 3,09,68,028 8.6 Thus, an addition of Rs. 3,09,68,028/- is made to the total income of the assessee on account of long term capital gain. Further, the TDR is the benefit on sale of business property, the profit derived on sale of such right is also liable to tax under the company Act. Therefore, the long term capital gain of Rs. 3,09,68,028/- is also added to the book prof....