Rajendra Singh, Accountant Member - This appeal by the assessee is directed against the order dated 29.10.2012 of CIT (A) for the assessment year 2009-10. Though assessee has raised several grounds of appeal, the only effective ground is regarding taxability of capital gain of Rs.. 538629592 on account of Development Rights Agreement (DRA).

2. The facts in brief are that assessee is a cooperating housing society registered under the Maharashtra cooperative society Act 1986. The assessee society is absolute owner of land/plot situated and lying at CTS survey no. 337/1, 337/2, 337/3, 337/4, 337/5, 337/6, 337/7, 337/7, 337/8, 337/9, 337/10, at Shantilal Modi Road, Kandivali (West), Mumbai 400 064 ad measuring about 2803.60 square meter. on the said land, building consisting of three blocks was constructed in the year 1967-68 and allotted to 59 members including State Bank of India. The Total carpet area of all the flats taken together was 29666 square feet. Flats have been allotted to the share holders who are the members of society and in occupation of the respective flats. The society in the special general meeting on 4.11.2007 passed a resolution, for re-development of the society property and in pursuance of the said resolution entered into a development rights agreement (DRA) with M/s Ankur Reality Pvt. Ltd., which was approved by the society members and the DRA was registered on 12.2.2009 by the developer who had paid the desired stamp duty.

2.1 The property was having floor space index (FSI) of 2803.60 Square meter and additional FSI of 2803.60 sq. meter in the form of TDR. Further, FSI of 33% was also available on account of new notification of the State Government. In terms of the DRA, M/s Ankur Reality was authorized to demolish and reconstruct the existing residential building and reconstruct the additional building having ground plus of 9 floors along with basement for storage. The developer was required to provide residential units with an additional 28% carpet area to the existing members. The developer was also authorized to construct new building on the additional FSI available to the society after obtaining the necessary TDR certificates, DRA required the developer to pay a sum of Rs.. 3.05 crore as corpus fund to the society, additional sum of Rs.. 1.50 crore in lieu of additional FSI and Rs.. 30 lakh as additional benefit on account of reduction in area for the reason of road widening, nallah etc. Thus, the society was to receive the total of 4.85 crore from the builder in terms of the agreement.

2.2 The agreement further provided that in case the developer is not in a position to obtain Intimation of Disapproval (IOD) and commencing certificate (CC) within the six month of the agreement, the agreement shall be terminated without any further notice. It also provided that even if IOD and CC had been obtained in time but the developer is not in a position to complete the work of construction of the new building within a period of 36 months on account of his deliberate acts and omissions the society would be entitled to terminate the agreement by giving one month notice to the developer. As the developer could not obtained the IOD and CC within the prescribed time limit the society as per the resolution dated 26.9.2010 passed in the AGM decided to cancel the DRA, and in response to the cancellation notice published in news papers the developer filed arbitration petition before the Hon'ble Bombay High Court. Subsequently, consent terms were agreed between the society and the developer dated 26.10.2011 which were signed under the seal of the High Court. In the consent terms, the main terms and conditions of the DRA were retained and the variations were only in relation to the deadline for submission of plans and its approval by the society, completion of legal processes etc. The consent terms also provided that the developer will pay rent to the members at the rate of 40/- per square feet for the period of first 1