Decided on June 06,2008



Sushma Chowla, Judicial Member - (1.) THIS appeal filed by the Revenue is against the order of CIT (A)-XX, Mumbai dated 02/05/2005 relating to Assessment Year 2003-04 and arises out of the assessment completed under Section 143(3) read with Section 148 of the Income Tax Act, 1961.
(2.) The only issue raised by the Revenue in its appeal is against the computation of Capital Gains. Mr. Manish Mishra, Departmental Representative appeared for the Revenue and Mr. Prakash K. Jotwani, learned Counsel appeal for the assessee and put forward their contentions.
(3.) THE brief facts of the case are that the assessee is a Registered Society consisting of 11 members. THE assessee society was entitled to receive certain TDR from the Municipal Corporation of Mumbai, as per which additional floors could be constructed on the existing building. THE said right to receive TDR was assigned to a Builder by the members of the society for the purpose of repairing the said building. THE assessee entered into an agreement with the developer wherein the terms of settlement vis-a-vis the Member of the society were agreed upon. Separate agreement was entered into by the respective owners of the flat i.e., the Members of the society with the developer for the assignment of the TDR and construction of additional floors in respect of each flat owned by the respective parties. THE benefit of the additional TDR was derived and enjoyed by the members of the assessee society and no consideration whatsoever was received by the assessee society for the assignment of the TDRs and for carrying out the repairs of the building and construction of the additional floors. THE Assessing Officer treated the consideration received/receivable by the members of the society as income in the hands of the society. THE CIT (A) noted that neither any income has been received by the society nor any income had accrued to the society and following the ratio laid down by the Mumbai Bench of Tribunal in Jethalal D. Mehta v. DCIT in ITA No. 672/Mum/2000 relating to Assessment Year 1996-97, it was held that there is no merit in computing any capital gains on the sale of said TDRs in the hands of assessee society.;

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