| Question And Answer | |
|---|---|
| Subject: | Redevelopment of society – Old Flat in the bldg demolished and new one constructed |
| Category: | Income-Tax |
| Querist: | CA Rajesh Sanghvi |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | Capital Gains, redevelopment |
| Date: | August 3, 2023 |
When a Society building containing various is demolished due to a Development Agreement ( typical in Mumbai ), does it not amount to “Relinquishment of asset” u/s 2(47)(i) – The asset is physically not there now and a new asset (new house may be bigger) will be given.
The Hon’ble Bombay High Court in the case of CIT v. Chhaya Parekh ITXA(L)1583 of 2012 dated January 24, 2013 (Bom)(HC) held that demolishing of a structure is not a transfer. Without prejudice, assuming there is a transfer, there is an immediate application of deduction under section 54 of the Act. Therefore, there will be no tax incidence
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