TaxTMI 
TaxTMI 
2026 (1) TMI 976
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....ashed in as much as there was gross violation of the provisions of s. 147, 148A, 148, 149 and 151 and 151A of the Income Tax Act besides the provisions of s.142(1) and 143(2) of the Act. B. The Ld. CIT(A) again erred in law and on facts in not appreciating the fact The consideration was originally received under an agreement of 2002 from the said builder for the said development rights and was not brought to tax in the hands of the society and he further failed to appreciate that the additional consideration of Rs. 2.28 crores during the year under the Supplementary Agreement of 2014 was of the same colour and the character and therefore the order of reassessment passed by AO was based on the change of opinion not permissible in law and not following rule of consistency. C. The Ld.AO erred in law and on facts in passing an order beyond the time limit permitted u/s. 149(1) and (2) without establishing that he was in possession of Books of Account, etc to which he revealed that the income chargeable to tax that escaped assessment represented any asset, etc and the amount of escaped income exceeded Rs. 50 lakh. D. The Ld.AO/CIT(A) erred in passing / upholdin....
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....ons made before him by the society in writing in the appeal. B. The Ld. CIT(A) again erred in law and on facts in not appreciating that the order passed by the Ld.AO suffered from gross violation of Natural Justice including on account of; i) in altogether ignoring the detailed submissions and explanations by alleging that the appellant had not submitted any explanations or evidence in support of its claim, ii) the failure of the AO to afford an opportunity of hearing to inquire and examine the facts with the members, developer and other related parties and iii) more particularly when he denied the request of the opportunity of hearing of virtual conference. C. Your appellant prays that the order passed by the AO and the CIT(A) be held to be bad in law and be quashed. GROUND NO. 4: Deduction u/s. 80P The Ld. CIT(A) again erred in law and on facts in denying the deduction u/s. 80P of the Income Tax Act for reasons not tenable in law and your appellant prays that the deduction u/s. 80P be allowed in computing the total income. GROUND NO. 5: Assessment of Total Income and assessment in wrong status A. The....
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....44B of the Act. GROUND NO. 2: Taxability of Receipt of Rs. 2,28,00,000 A. The Ld. CIT(A) erred in law and on facts in confirming the action of the Id. AO of taxing an amount of Rs. 2,28,00,000 under the head Capital Gains in the hands of the appellant society ignoring that no such amount was received by the society but was received by the members and that Kamla Landmark, the developer, was required as per internal pg. 19 of the Supplementary Agreement dt 11.04.2014 to make individual agreements with 40 members and the case was covered by Circular No.9 of 1969 of the CBDT and the decision of the SC in case of Raj Ratan Palace CHSL, 362 ITR 1 (SC) B. The Ld. CIT(A) again erred in law and on facts in confirming the order of the AO which ignored the fact that the rights if transferred had no cost of acquisition and the receipt was not taxable at all in view of the decisions of the Bombay High Court in the case of Sambhaji Nagar CHSL 370 ITR 325 (Bom) and Maheshwar Prakash No.2 CHSL dt 24.09.2009. C. The Ld. CTT(A) again erred in law and on facts in confirming the erroneous finding of the AO that the appellant had received the consideration while in f....
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....rn of income on 06.06.2022, in response to the said notice u/s.148, reporting total income at NIL after claiming deduction u/s. 80P of Rs. 4,35,084/- in relation to interest income. The major issue which needs to be dealt with in the present appeal before us, is in respect of taxation of Rs.2,28,00,000/- made by ld. AO under the head capital gains, which was received by the members of the assessee society from the developer Kamala Landmark Construction Private Limited, in respect of permission to construct building made possible on account of change in the Development Control Rules, 1991, for which there was no cost of acquisition in the hands of the assessee society or its members. Claim of the assessee is that it never received the said amount in its bank account as it was paid directly by the developer to the individual 40 members of the society. 3.2. Relevant facts in respect of this issue are that assessee for and on behalf of its 40 members maintain a building containing 40 apartments, constructed on a plot of land in the year 1970 or their about. These 40 apartments are acquired, occupied and owned by the 40 members for the purpose of residence of their families. Each of ....
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....ty were to be paid out total of Rs. 2.28 Cr in the breakup specified in annexure thereto. Further, in terms of para 3(1)(b), interest free security deposit was also given to the assessee amounting to Rs. 36 lacs. The annexure specifying breakup of amount to each of the 40 members is extracted below from the supplementary agreement: 3.4. Payment of this amount of Rs. 2.28 Cr. was made to 40 members through cheques dated 15.03.2014 i.e. before the dated of executing supplementary agreement. Details in this respect is tabulated below whereby it is submitted that these amounts were paid from the bank account of the developer by issuing individual cheques to each of the 40 members. 3.5. Also, relevant clause (1) from the aforesaid supplementary agreement is extracted in respect of this above stated amount, for ready reference: "1) The Society has agreed and accepted the proposal of the Developers as contained in the offer letter dated 27th May 2013 and dated 3rd August 2013 and accordingly the Developers agree to pay to each of the 40 Members of the Society named in column 2 of Annexure "B" hereto amounts shown opposite their respective names in column 3 of Annexure "B" h....
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.... already on record. Thus, the allegation of ld. AO that assessee received this amount is baseless and devoid of any merit. 5.1. It is also submitted that, the incremental FSI which arose is on account of amendment to the Development Control Rules (DCR), 1991 and thus, there is no cost of acquisition in respect of the said rights transfered to the developer under the supplementary agreement for the purpose of construction. These rights had arisen without any cost, but on account of amendments brought into the DCR for which the cost of acquisition cannot be ascertained making computation provisions nonapplicable in absence of provisions contained in Section 55 of the Act. In this respect, reliance is placed on the decision of Hon'ble Jurisdiction High Court of Bombay in the case of CIT vs. Sambhaji Nagar Cooperative Housing Society Limited [2015] 54 taxmann.com 77 (Bom), wherein it was held that were assessee had not incurred any cost to acquire TDR attached to land own by society, transfer of some to developer for consideration for construction of floors pace index would not be eligible to capital gains tax. Hon'ble Court in para 11 noted that: "It was not a case of sale....
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....sted the same in bonds u/s 54EC and have filed Return of Income. ix. Investment in bonds u/s 54EC by members x. Return of Income filed by members. 5.4. Per contra, ld. DR placed reliance on the orders of the authorities below to assert the sustenance of addition made. 6. Having heard both the parties and perused the material on record, the undisputed facts is that amount paid by the developer is in respect of TDR towards FSI of 230 square meters for which construction remained pending. The amount of Rs. 2.28 Cr. has been paid by the developer from its bank account directly to each of the 40 members of the assessee society into their respective bank accounts by issuing individual cheques, details of which are already tabulated above. Terms of supplementary agreement, more specifically clause (1) mentions details in this respect which is already extracted above. From the perusal of the bank statement of the assessee, it could not be pointed out that assessee received credit in its bank statement of this amount of Rs. 2.28 Cr. paid by the developer to it. Credit of two entries of Rs.18 lacs each is pursuant to refundable security deposit relating to parking are....
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....individual members themselves, and not in the co-operative society and hence, for all purposes including attachment and recovery of tax etc. individual members should be regarded as legal owners of the property in question. Relevant extract from the said circular are as under for ready reference: "1. Instructions were issued in 1955 to the effect that in the case of tenant co-partnership co-operative housing societies, the income from each building should be assessed in the hands of the individual members to whom it had been allotted, notwithstanding the facts that the technical legal ownership in the property in such cases vested in the society. However, it has now been represented to the Board that in the case of tenants co partnership co-operative housing societies, the societies are usually only lessees of the flats and the legal ownership of the flats really vests in the Individual members themselves. 2. The normal procedure in such cases is that an agreement is entered into between the builder und each purchaser of the flat in the branding proposed to be constructed. The purchaser pays the entire cost of the flat in instalments spread over the period of the ....
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....ins tax liability as additional FSI had its origin in DCR for which there was no cost of acquisition paid or ascertainable u/s. 55 and thus, the computation machinery failed, resulting into no capital gains tax as per the decision by Hon'ble Supreme Court in the case of CIT vs B.C. Srinivasa Setty [1981] 128 ITR 494 (SC). Accordingly, on the admitted position of fact and law, in reference to judicial precedents discussed above, addition made by the ld. AO in the hands of the assessee society by treating it as Long Term Capital Gain (LTCG) is not tenable. Accordingly, the addition so made is deleted. Grounds raised by the assessee is in this respect are allowed. 9. Assessee has also contested on claim of deduction u/s. 80P claimed by it in the return filed in response to notice u/s. 148 on account of interest income earned by it. Claim of the assessee is that it has earned income on deposits with co-operative bank/society which is an allowable deduction u/s. 80P. The claim so made has been denied since, assessee did not claimed it originally as no return was filed u/s. 139(1), in view of provisions of section 80A(5). 9.1. Before us, it is submitted that a fresh claim can alway....
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....R) 5 Hooda 5,00,000 6 Irene Fernandes 7,00,000 7 N.N. Moolchandani 5.00,000 8 Anchal Alreja $,00,000 9 Bimla Dua 7,00,000 10 Pushpa Ghatge 2 5,00,000 11 Annie Sansare 5,00,000- 12 Raj Bijlani 7,00,000€ 12-A K.S. Tolani 5,00,000 14 Pushpa Khubchandani 5,00,000 15 S.R. Karamchandani 7,00,000 16 Raj Kanuga 5,00,000 17 R. Viegas 5,00,000 18 Sunder Golani 7,00,000 19 Cedric D'silva 5,00,000 20 |H.M. Shivdasani 5,00,000 21 Rani Dua 7,00,000 22 Suzie D'silva 5,00,000 23 Kiran Bharwani+ 5,00,000 24 Neeta Shirodkar 7,00,000 25 Merlyn Menezes 5,00,000 26 Manjunath Shenoy 5,00,000 27 S.S. Tulsiani 7,00,000 28 Ronald Heredia 5,00,000 CHERI 29 Kamla Kotwani 5,00,000 30 Ramakant Kúbal 7,00,000 * No. 31 Gregory Misquita 5,00,000 Z+ 32 Raynah Braganza 5,00,000 (GANDR (YUSNYS) 33 Kishin D. Karamchandani SUBURE HLOST. 7,00,000 34 Devki Hukmani 5,00,000 35 H. Sharma 5,00,000 36 Asha Sachanandani 7,00,000 37 H.I. Lewis 5,00,000 38 Madanlal Kumbhandas Thuthija 5,00,000 39 C.D. Karamchandani 7,00,000 40 Sunder Gursahani 5,00,000 42 O.T. Miranda 7,00,000 43 Lynette Mergulhao 5,....
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....IE DSILVA 185956 500,000.00 AACPB7705R 22, Colombia, St. Dominic Road, Bandra West, Mumbai 400050 Bank Statement & Capital Bonds provod 23 KIRAN KUMAR RAM BHARWANI 185957 500,000.00 AELPB253OF 23, Colombia, St. Dominic Road, Bandra West, Mumbai 400050 Bank Statement & Capital Bonds provides 24 NEETA SHIRODKAR 185958 700,000.00 AHLPS0478C 24, Colombia, St. Dominic Road, Bandra West, Mumbai 400050 25 MERLYN MENEZES 185959 500,000.00 AQXPM465OF 25, Colombia, St. Dominic Road, Bandra West, Mumbai 400050 26 MANJUNATH SHENOY 185960 500,000.00 Deceases 27 5.5 TULSIANI 185961 700,000.00 AJCPT7017M 27, Colombia, St. Dominic Road, Bandra West, Mumbai 400050 28 RONALD HEREDIA 185962 500,000.00 AAAPH5914L 28, Colombia, St. Dominic Road, Bandra West, Mumbai 400050 29 KAMLA KOTWANI 185963 500,000.00 30 RAMAKANT KUBAL 185964 700,000.00 Deceased 1 GREGORY MISQUITA 185965 500,000.00 Fiat Sold 32 RAYNAH BRAGANZA 185965 500,000.00 AAFPB1602A 32, Colombia, St. Dominic Road, Bandra West, Mumbai 400050 Capital Gains Investiment proct provided 33 KISHIN.D.KARAMCHANDANI 185967 700,000.00 AENPKO121K 33, Colombia, St. Dominic Road, Bandra West....