2013 (10) TMI 1548 - AT - Income Tax

Summary

Issues involved:
The issues involved in this judgment are the treatment of amount received from developers for redevelopment, chargeability of interest under sections 234A, 234B, and 234C of the Income-tax Act, 1961, and the applicability of judicial pronouncements in determining tax liability.

Treatment of amount received from developers for redevelopment:
The appellant, an individual, received an amount from a developer for agreeing to redevelopment and alleviating hardship. The Assessing Officer (AO) determined this amount as taxable income from Other Sources. The First Appellate Authority (FAA) upheld this decision, stating that the amount was taxable under the Income from Other Sources head as per section 56 of the Act. However, the Authorized Representative (AR) argued that the receipt was of capital nature, citing various judicial precedents. The ITAT found in favor of the assessee, following previous decisions that held amounts received on transfer of FSI-TDR are not taxable under any head of income. The ITAT concluded that as there was no cost of acquisition for the asset transferred, there was no liability to capital gains, thereby allowing the appeal.

Chargeability of interest under sections 234A, 234B, and 234C:
The issue of charging interest under sections 234A, 234B, and 234C was also addressed in the judgment. The ITAT considered this issue consequential and allowed the ground filed by the assessee for statistical purposes. Consequently, the appeal filed by the assessee was allowed.

This judgment highlights the importance of considering the nature of receipts in determining tax liability and the relevance of judicial precedents in interpreting tax laws.