TaxTMI 
TaxTMI 
2025 (11) TMI 466
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....d by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the 'CIT(A)'], whereby the Ld. CIT(A) had partly allowed the appeal of the Assessee against the Assessment Order, dated 10/12/2018, passed under Section 143(3) read with Section 147 of the Act. 2.1. The Revenue has raised following grounds of appeal in ITA No.3595/Mum/2025 [Assessment Year 2011-2012] : "1. On the facts and in the circumstances of the case, AMD in law, the Ld. CIT(A) erred in deleting the addition of Rs. 4,97,63,657/- made by the Assessing Officer as Short Term Capital Gain on account of transfer of development rights under a registered development agreement, despite clear applicability of Section 2(47)(v) read with Section 50C of the Income-tax Act, 1961. 2. On the facts and in the circumstances of the case, and in law, the Ld. CIT(A) erred in holding that the income from redevelopment transactions is not taxable in the hands of the society but in the hands of individual members, without appreciating that the registered agreement was executed by the society and all rights, including the receipt of consideration, were exercised by the society as a legal entity. ....
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....urn of income for the Assessment Year 2011-2012 on 28/04/2018 declaring 'Nil' income. The aforesaid reassessment proceedings culminated into passing of Assessment Order, dated 10/12/2018, under Section 143(3) read with Section 147 of the Act whereby an addition of INR.4,97,60,657/- was made in the hands of the Assessee as Short Term Capital Gains taxable at the rate of 30%. 4. Aggrieved by the above addition made by the Assessing Officer, the Assessee filed appeal before the Ld. CIT(A). Since the Assessee was non-responsive to the notices issued during the appeal proceedings and the Ld. CIT(A) passed ex-parte order under Section 250 of the Act on 27/12/2021 dismissing the appeal of the Assessee. However, in appeal preferred by the Assessee, vide Order dated 27/06/2022, the Tribunal set aside the order passed by the Ld. CIT(A) and restored appeal back to the file of the Ld. CIT(A) to pass fresh order as per law. 5. As per the directions of the Tribunal, after taking into consideration the written submissions on 15/04/2024, 30/04/2024 & 11/03/2025 filed by the Assessee, the Ld. CIT(A) disposed off the appeal preferred by the Assessee vide order dated 15/04/2025 impugned by way ....
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..... The appellant has raised 3 propositions on the issue of taxability of Short Term capital Gains as under without prejudice to each other: Proposition I - Income accruing to the members of the Appellant society in cash/kind is not taxable in the hands of Appellant: Proposition II - in the absence of "cost of acquisition", computation mechanism u/s. 48 of the Act fails and therefore no capital gains attracted to transfer of development right: Proposition III - Taxable event not in the current year. 7.2 Vide proposition 1, the appellant has stated that in the present case, the individual members are the owners of their respective flats and that the society is merely entering the re-development agreement on behalf its members, the consideration so received is taxable in the hands of members and not the Appellant society. Further, the appellant placing reliance on the Board Circular No. 9 in F.No. 8/2/69-IT(A-I)], dated 25-03-1969 has stated that circular clearly states that the legal ownership in the flats can be said to vest in the individual members themselves and not in the co-operative society. The appellant also placed reliance on the judgement....
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.... as per law. However, since the total addition made as Short term capital Gain is deleted vide discussion in preceding paras with regard to ground no 1 & 3, the present ground no 4 becomes academic in nature. Accordingly, no separate adjudication is required on this ground. 12. On perusal above, we the find that the Ld. CIT(A) as returned a finding that the Assessee had only received a refundable deposit of INR.10,00,000/-. We have perused a copy of the Development Agreement placed on record by the Assessee. On perusal of the same, we find that as per the agreed terms, the consideration was to flow to the individual members of the Assessee and the Assessee had only received refundable deposit of INR.10,00,000/-. Thus, we concur with the finding returned by the Ld. CIT(A) that the individual members were the owners of respective flats and that Assessee had entered into Development Agreement in the capacity of the representative of the flat owners/members. Schedule to the development agreement clearly provided down the list of members who were to receive consideration in terms of the Development Agreement. Following Clauses of the Development Agreement support the conclusion drawn....
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.... If any said Existing Members of the Society intends to buy additional area from salcable components over and above agreed area by the Developers then such flat Purchasers shall pay to the Developers for additional area as follows:- (i) for additional area upto 50 sq.ft. Carpet Rs. 7,000/- per sq. ft. (ii) for additional area from 51 sq. ft. to 100 sq. ft. Carpet Rs. 8,400/- per sq. ft. (iii) for additional area above 100 sq. ft. Carpet Rs. 9,100/- per sq. ft. It is specifically agreed that the Stamp Duty in respect of the aforesaid additional premises shall be borne and paid by the respective members of the Society. 15. The Transit Compensation payable to each of the said Existing Members occupying the flats in the said Old Building shall be calculated at the rate of Rs. 30/- (Rupees Thirty only) per square feet (carpet area) per month of the old flats in the Old Building in the respective occupation of the said Existing Members of the Society (hereinafter referred to as the "Transit Compensation"). The Builders/Developers shall pay to the Existing Members of the Society occupying the said Old Building the Transit compensation for the p....
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....ng grounds of appeal in Cross Objection No.243/Mum/2025 [Assessment Year 2011-2012] : "1. On the facts and in the circumstances of the case and in law, the Commissioner of Income tax (Appeals) ("Ld. CIT(A)) erred in confirming the action of the Ld. Assessing Officer ("Ld. A.O") in issuing notice u/s. 148 of the Act and consequently passing an order u/s. 143(3) r.w.s. 147 of the Act without appreciating that the jurisdictional requirements under sections 147 to 151 of the Act are not satisfied. 2. The Cross Objector therefore prays that the reassessment proceedings initiated by the Ld. AO be held as null and viod ab initio, and the order passed u/s. 143(36) r.w.s. 147 of the Act be annulled. Without prejudice to the above, challenge on the merits of the addition: 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not holding that even otherwise, no addition could be sustained under section 50C of the Act amounting to Rs. 4,97,63,657. 4. The Cross Objector prays that the addition under section 50C of the Act amounting to Rs. 4,97,63,657 of the Act be deleted. 5. On the facts and in the circums....