ITO Vs MIG Co-op Housing Society Group II Limited (ITAT Mumbai)
The appeal was filed by the Revenue against the order dated 3 April 2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, for Assessment Year 2014–15. The appeal arose from an assessment order passed under section 143(3) of the Income-tax Act, 1961 by the Assessing Officer. The matter was adjudicated by the Income Tax Appellate Tribunal Mumbai.
The assessee, a cooperative housing society, had entered into a redevelopment agreement dated 26 April 2010 with a developer. Subsequently, a supplemental agreement dated 7 January 2014 was executed to address shortfall in carpet area of members’ flats and shortfall in the society’s share of aggregate Floor Space Index (FSI). Under this supplemental agreement, additional FSI up to a specified limit was to be utilised and shared between the society and the developer in the ratio of 52.5:47.5. As per the agreement, the society became entitled to 10 fully completed flats and, depending on utilisation of variable FSI, an additional portion of flat area, aggregating to about 10½ flats.
During assessment proceedings, the Assessing Officer took the view that the society had transferred additional FSI of 782.8 square metres to the developer and issued a show cause notice proposing taxation of the same. Not being satisfied with the assessee’s explanation, the Assessing Officer made an addition of ₹5,24,63,648 as short-term capital gains under section 45 of the Act.
