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TMI Blog2015 (7) TMI 1368X X X X Extracts X X X X X X X X Extracts X X X X ..... m of additional FSI, is negotiable by the owner to the buyer/developer, only for prospective development; that there is no element of cost to the owner and no capital gain is exigible. The other decisions relied on by the assessee are to the same effect. They have been rendered by co-ordinate Benches of the Mumbai Tribunal. There is merit in the contention of the assessee, that the hardship compensation received was due to the problem faced by the assessee on account of demolition of the building and this receipt is, therefore, not a taxable capital gain, there being not transfer of any capital asset involved and no cost of acquisition having been incurred. Disallowance u/s 14A r.w.r. 8D - assessee has contended that the authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.D. JAIN, J.M. In this assessee s appeal for A.Y. 2005-06, the following grounds have been taken:- 1. Under the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) (hereinafter learned CIT (A)) has erred in treating the net amount of ₹ 18, 62,501/- being the amount received from the Developers for agreeing to the redevelopment, for alleviating hardship of shifting/reshifting and agreeing to share the common area with more persons after redevelopment; as Income from other sources. 2. Under the facts and circumstance of the case and in law, the learned CIT (A) has erred in not following the judicial pronouncements cited by the Appellant. 3. Under the facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eement, the developer had to pay to the society ₹ 5 lakhs. Further, as per clause 5 of the said agreement, the developer agreed to pay to the members of the society, an aggregate consideration of ₹ 2,45,00,000/- and the same was paid during the financial year 2007 O8. 3. The assessee was entitled to receive an amount of ₹ 30,62,501/- on the execution of the said agreement. The assessee received the amount from the developer in the F.Y. 2007-08. The said amount was credited to the capital account, but not offered for taxation in the return of income filed by the assessee. According to the A.O., under the I.T. Act, if a particular receipt is not taxable under a particular head of income, it does not mean that the receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the same effect. They have been rendered by co-ordinate Benches of the Mumbai Tribunal. 7. Therefore, there is merit in the contention of the assessee, that the hardship compensation received was due to the problem faced by the assessee on account of demolition of the building and this receipt is, therefore, not a taxable capital gain, there being not transfer of any capital asset involved and no cost of acquisition having been incurred. 8. In keeping with Paranugraha Co. Op. Housing Society Ltd. (supra), and also the other case laws cited by the assessee, this contention of the assessee is accepted. The order of the ld. CIT(A) is cancelled. Ground Nos. 1 2 are accepted. 9. So far as regards ground No. 3, the A.O. noted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture directly or indirectly was attributable for earning dividend income, was upheld. 14. In CIT vs. Hero Cycles Ltd. , 23 ITR 518 (P H), it was held, inter alia, that the contention of the Revenue that direct or indirect sum of expenditure is always incurred which must be disallowed u/s 14A and the impact of expenditure so incurred cannot be allowed to be set off against the business income which may nullify the mandate of section 14A, could not be accepted; and that disallowance u/s 14A requires a finding of incurrence of expenditure and where it is found that for earning exempted income, no expenditure has been incurred, disallowance u/s 14A cannot stand. 15. In view of above, here also, the grievance of the assessee is justified ..... X X X X Extracts X X X X X X X X Extracts X X X X
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