Transfer of development rights

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student (Querist)
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30 August 2011 IN CASE OF A BUILDER/PROMOTER WHOSE AIM IS TO MAKE & SALE FLATS.IF HE PURCHASES TDRS & SALE THEM AT A PROFIT THEN IT WIL GO UNDER INCOME FROM OTHER SOURCES & NOT UNDER PGBP...

IF HE UTILISES THAT PARTICULAR TDR FOR INCREASING THE BUILT UP AREA THEN THAT TDR WIL BE SAID TO BE USED FOR THE PURPOSE OF PROJECT.BUT IN ABOVE CASE HE HAD BOUGHT TDS & SOLD IT AT PROFIT.

NOW IN THE ABOVE CASE WHETHER WE HV TO SEE THE INTENTION OF THE ASSESSEE THAT HE MIGHT HAVE PURCHASE THAT TDR FOR USE IN BUSINESS BUT IT WAS OF NO USE THEREFORE SOLD IT.

IT'S LIKE EXTINGUISHMENT OF RIGHTS.SO WHETHER IT ATTRACTS CAPITAL GAIN B/C WHEN A BUSINESS ASSET IS ALSO A CAPITAL ASSET & IF IT IS SOLD THEN ALSO U HV TO PAY CG TAX

SO WHETHER TO CLASSIFY IT AS CG OR IOSOR BS INCOME.
IS THERE ANY CASE LAW FOR IT

student

student (Querist)
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31 August 2011 pls solve my query

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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01 September 2011 There are two angles to look into any matter. First if we say that it is his business to buy and sale TDR then it is a business income and if he has purchased TDR once in his life or a year and has sold it in the same year then it is a short term capital gains. TDR is transfer of development rights which givens him the tittle to be a deemed owner and accordingly the matter is to be sorted out.

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