While giving its ruling on taxability of development rights for housing societies, the Bombay HC said the additional FSI or TDR is generated by change in DC Rules and not by sale of development rights and hence is not taxable
The Bombay High Court in a recent judgement has given a big relief for all those societies, which have redeveloped their properties. The HC said, additional floor space index (FSI) or transfer of development rights (TDR) that is generated by the change in Development Control Regulations is not a case of sale of development rights embedded in the land.
In Mumbai, hundreds of cooperative housing societies (CHS) are functioning whose buildings have become old and dilapidated due to age. The Societies lack finance and technical expertise to repair their buildings. The Societies therefore seek the help of developer to carry out the construction at his own cost and pay compensation to the CHS members in the form of corpus, rent and larger area.
Controversy had existed between societies and the IT Department regarding taxability of these amounts. In the relevant case, Sambhaji Nagar Cooperative Housing Society (CHS) Ltd was asked to pay tax on Rs2.23 crore it received from the developer.
The assessing officer (AO) from the Income Tax (I-T) department has said the right is attached to the land owned by the Society, which had been acquired for a value and therefore there is transfer of capital asset chargeable to Tax. The Commissioner of Income Tax (Appeals) upheld the order of AO holding that this is not a case where extra FSI had occurred due to change in law but TDR already existed at the time of reconstruction of society's building.
The Tribunal followed a decision by Coordinate Bench in the case of New Shailaja CHS involving similar controversy and held that sale of TDR does not give rise to any Capital Gains chargeable to tax.
The High Court looked in to the provisions of Sec. 48 wherein mode of computation of Capital Gain is laid down, Sec. 49 wherein cost with reference to certain modes of acquisition is set out and Sec 55 (2) clarifying cost of acquisition for the purpose of sec 48 of 49.
The HC then upheld the order of the Tribunal.
Sambhaji Nagar CHS was represented by KK Ramani & Co.
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In a video that has now gone viral, the DM is seen giving a severe tongue-lashing to junior officials involved in road contracts.
Brave bureaucrats taking on a decaying system have often been heard of, but this video, which has now gone viral on social media, shows B Chandrakala giving a severe tongue lashing to officials. “Out of the 17 works given to you, work has not begun on 10 of them,” she is seen telling an official in Hindi.
She forces the officials to seize samples and take brick samples to process the contractor's black-listing, but tells them to file an FIR, failing which the officials themselves would face inquiry.
Watch the full video below:
Reports had said that when she was recently transferred from Mathura to Bulandshahr without explanation, the citizens were shocked. She was said to be popular with the locals in Mathura for her prompt redressal of complaints.