| Question And Answer | |
|---|---|
| Subject: | CAPITAL GAINS |
| Category: | Income-Tax |
| Querist: | VIJAY SHAH |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | amount received from builder, Capital Gains |
| Date: | May 20, 2022 |
IN THE CASE.. MOTHER OF THE ASSESSEE RECEIVED RS 5000000/- FIFTY LACS FROM THE BUILDER AS SHE AGREED TO REDEVLOP THE PLOT WHICH STOOD IN HER NAME…THERE WAS NO SALE OF PLOT..ONLY PARTING OF TDR FSI..THAT TOO TO THE TUNE OF 25% AND THE REMAINING 75% WAS RETAINED BY HER…AMOUNT WAS RECEIVED BY HER…THE THREE LEGAL HEIRS HAD TO EXECUTE DEVELOPMENT AGREEMENT..ITAT MUMBAI HAS GIVEN AT LEAST 10 JUDGEMENTS THAT SUCH INCOME IS NOT CAPITAL GAIN AS THERE IS NO SALE…INCOME TAX OFFICER DISAGREES..ADDED BACK AS SALE OF PLOT AND ADDED 1.14 CR IN THE CASE OF ONE LEGAL HEIR..IN THE CASE OF SECOND LEGAL HEIR ALSO 1/3 RD AMOUNT HAS BEEN ADDED AS CAPITAL GAINS INCOME…DOUBLE TAXATION ON THE SAME INCOME…WHAT SHOULD BE THE POSITION…NOW THE CASE HAS COME UP BEFORE THE FACELESS AUTHORITY OF APPEALS…WHAT DEFENCE SHOULD I TAKE…
It would be pertinent to check for which Assessment Years, the Hon’ble ITAT has held that no Capital Gain arises, as now there is no denying that TDR is a Capital Asset as per section 2 (14) of the Income-tax Act, 1961 (Act). Earlier, no Capital Gain was applicable on sale of TDR [CIT v. Sambhaji Nagar Co-op. Hsg. Society Ltd. [2015] 370 ITR 325 (Bombay)] as the computation mechanism failed. However, with the amendment under section 55(2) of the Act, the Cost of Acquisition will have to be taken as Nil and Capital Gains will have to be computed.