Itxa/799/2011 Of The Commissioner Of Income Tax - 20 Mumbai v. Haresh A. Advani

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.799 OF 2011 The Commissioner of Income Tax-20..Appellant.V/s.Mr. Haresh A. Advani..Respondent. Mr. Abhay Ahuja, for the Appellant.Mr. Nishant Thakkar i/b. Mint & Confreres, for the Respondent. P.C:- CORAM: J.P.DEVADHAR & M.S.SANKLECHA,JJ.DATE : 12[th] FEBRUARY, 2013. In this Appeal for the Assessment Year 2005-06 by the Revenue, the basic dispute between the Revenue and the Respondent-Assessee is whether the amount received on transfer of TDR (Transfer Development Rights) by the Respondent-Assessee is taxable as capital gain as contended by the Respondent-Assessee or as business income as contended by the Revenue. 2The Respondent-Assessee is a member of a Co-operative Society consisting of 24 members. The members of the Co-operative Society sold the TDR to a developer and received consideration for the S.R.JOSHI same. The Tribunal held while upholding the order of CIT(A) that it is taxable under the head of capital gain. 3The objection of the Revenue to the order of the Tribunal is that what was transferred by the Respondent-Assessee was not merely its TDR but also certain other development rights. Consequently, according to the Revenue, this could not be treated as gain arising out of transfer of TDR chargeable to the tax under the head 'Capital Gain'. 4The CIT(A) as well as the Tribunal both have come to a finding of fact that what has been transferred in terms of agreement entered into between the Respondent-Assessee as a member of the Co-operative Society and the developer is for a transfer of the TDR. Thus, on the finding of fact, both the CIT(A) as well as Tribunal held that this transfer of TDR was not an adventure in the nature of trade to be treated as profit and gains of business but merely transfer of TDR to the developer and thus chargeable to tax only under the head of capital gain. This decision of the Tribunal is based on a finding of fact and, therefore, we see no reason to entertain the appeal. 5Further, we are informed by the Counsel for the Revenue that he has been able to gather information with regard to 11 out of 24 members of the Society and out of these 11, 2 members have not filed S.R.JOSHI2 of 3 return of income while 9 have been taxed under the head of capital gains while being assessed under Section 143(I) of the Act and 1 has been taxed under the head of capital gain while being assessed under Section 143(3) of the Act in respect of consideration received a transfer of TDR. The afore said orders also support the findings of the Tribunal. 6Accordingly, appeal is dismissed with no order as to costs. (M.S.SANKLECHA,J.) (J.P.DEVADHAR,J.)