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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI RAJESH KUMAR, AM & SHRI AMARJIT SINGH, JM
O R D E R
PER AMARJIT SINGH, JM:
The assessee has filed the present appeal against the order dated 4.02.2019 passed by the Commissioner of Income Tax (Appeals) - 40, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2015- 16.
The assessee has raised the following grounds: - “
1. On the facts and circumstances of the case and in law, the Ld. AO has erred in adding Rs.3,07,86,423/- as STCG and has wrongly treated the said amount as taxable capital gain. The AO A.Y. 2015-16 has remarked that the appellant society has violated provisions of Section 50C but the observations are factually wrong.
2. The appellant craves leave to (i) add any new ground of appeal and/or (ii) amend, alter or delete any of the above grounds of appeal.”
3. The brief facts of the case are that the assessee filed its return of income on 16.03.2017 declaring total income to the tune of Rs.3,24,050/-. The case was selected for scrutiny under CASS. Notices u/s 143(2) & 142(1) of the Act were issued and served upon the assessee. The assessee is a Co-operative Housing Society & Derives its income from interest income and income from other sources. The case was selected for limited scrutiny for verification of sale consideration in ITR which was less than sale consideration written in AIR. Necessary details were called. On perusal of the registered sale-deed it was observed that the assessee has received the consideration of Rs.3,18,54,500/- on transfer of development rights to the developers. The stamp duty was also paid for the consideration of fair market value of Rs.3,19,64,000/-. The assessee has given the developing right to the housing society. The AO observed that the assessee has violated the provisions of Section 50C of the I. T. Act, 1961, therefore, notice was given and after the reply of the assessee short term capital gain in sum of Rs.3,07,86,423/- was assessed as income of the assessee. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who partly allowed the claim of the assessee but declined the claim of the assessee on the ground mentioned above, therefore, the assessee has filed the present appeal before us.
We have heard arguments advanced by the Ld. Representative of the parties and perused the record. At the very outset, the Ld. Representative of A.Y. 2015-16 the assessee has argued that the assessee is a society and did not incur any cost to acquire the TDR attached to land owned by it and transferred the same to a developer for a consideration for construction of a floor space and transfer of TDR would not give rise to any capital gains chargeable to tax but the CIT(A) has wrongly confirmed the order of AO, therefore, the finding of the CIT(A) is not justifiable and is liable to be set aside. In support of this contention, the Ld. Representative of the assessee has placed reliance upon the decision of Jurisdictional High Court in the case of CIT- 18 Vs. Sambhaji Nagar Co-op. Hsg. Society Ltd. (2015) 54 taxmann.com 77 (Bom). However, on the other hand, the Ld. Representative of the Department has refuted the said contention and strongly relied upon the order passed by the CIT(A) in question. It is correct that the assessee has received the consideration of Rs.3,18,54,500/- on transfer of development rights to the developers. The stamp duty was also paid for the consideration of fair market value of Rs.3,19,64,000/-. The assessee is a co-operative society which acquired plot of land in Sane Guruji Nagar, Mulund East, Mumbai-400081 in view of the letter dated 12.09.1972 registered with the sub-