Скачать или смотреть Whether compensation for hardship from building in redevelopment agreement is a capital receipt?

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(2025) 126 ITR (Trib) 511
In the Mumbai Income Tax Appellate Tribunal ‘SMC’ Bench
(Before Kuldip Singh, Member (Judicial) and S. Rifaur Rahman, (Accountant Member))

Ajay Parasmal Kothari
v.
Income-tax Officer

Ι.Τ.Α. No. 2823/Mum/2022 (assessment year 2013-2014)

Decided on April 3, 2023

Playlist: Capital Receipt, Condonation

A.Y.: 2013-2014/Assessee

Question: Whether compensation for hardship from building in redevelopment agreement is a capital receipt?

1) For assessment year 2013-2014, the case of the assessee, an individual earning income from share trading, commission and consultancy was selected for scrutiny.

2) The Assessing Officer observed from the assessee's capital account that the assessee owned a flat, which he had given for redevelopment and received a monthly rental compensation from the builder towards rent of alternate accommodation and that he had shown the receipts as a capital receipt from the builder.

3) The assessee's explanation when asked why such amount should not be treated as income from other sources and brought to tax was rejected by the Assessing Officer, who treated it as a revenue receipt on the ground that the assessee did not utilise any amount of its receipt for his alternate accommodation.

4) The Commissioner (Appeals) sustained the addition made by the Assessing Officer.

5) Held, that the assessee has received certain sum from the builder for alternate accommodation.

6) However, he did not utilise these funds therefor and chose to live with his parents, indicating he had faced hardship by vacating his flat, the receipt of compensation for hardship was in the nature of capital receipt and the addition made by the Assessing Officer was to be deleted.

7) It was also held that the delay of 1566 days in filling appeal was due to the assessee not being properly guided by his counsel therefore the delay was condoned.

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Link for some important videos:

1) WHETHER TRIBUNAL CAN REMAND MATTER IN ENTIRETY WHERE DEPARTMENT DID NOT FILE CROSS APPEALS?- https://www.youtube.com/watch?v=gkqMk...

2) WHETHER ASSESSEE HAS ALSO TO CHALLENGE THE FINDINGS OF THE A.O THAT NOTICE HAS BEEN SERVED?- https://www.youtube.com/watch?v=XbZWh...

3) WHETHER EXTENDED TIME LIMIT U/S 149(1)(b) CAN BE USED ON THE BASIS OF SALES CONSIDERATION U/S 48?- https://www.youtube.com/watch?v=WuRt9...

4) WHETHER NOTICE SENT TO SECONDARY EMAIL IS VALID IF NOT SENT TO PRIMARY E-MAIL U/S 148?- https://www.youtube.com/watch?v=aAzHE...

5) WHETHER ENTRIES IN BOOKS OF ACCOUNTS CONCLUSIVE TO DETERMINE TAXABLE INCOME OF ASSESSEE?- https://www.youtube.com/watch?v=Rx8JQ...