Court :
Bombay High Court
Brief :
Controversy existed between Cooperative Housing Societies and Income Tax department regarding taxability of the amounts that societies receive from developer as compensation to repair buildings in form of corpus, rent and larger area. With the promulgation of the Development Control Rules, 1991 (DCR), the Assessee Society acquired right of putting up additional construction through TDR. Instead of utilising this right itself, the Society decided to transfer thesame to a Developer for a consideration. According to AO, The right created by the DCR attaches to the land owned by the Society which was acquired for a value, which is capital asset under section 2(14). CIT(A) upheld order of AO. The tribunal followed decision of new ShailajaC HS and held that sale of TDR does not give rise to capital gains. High Court gave a finding that in present case additional FSI/TDR is generated by change in D.C> Rules and it is not a case of sale of Development Rights which were embedded in the land and thus upheld Tribunal’s order thereby bringing a relief to all those societies which have redeveloped their properties.
Citation :
Commissioner of Income Tax – Appellant – Versus – Sambhaji Nagar Co-op Hsg. Society Ltd – Respondent
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