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TMI Blog2023 (3) TMI 1224X X X X Extracts X X X X X X X X Extracts X X X X ..... at compensation received by the assessee towards displacement in terms of development agreement is not a revenue receipt and constitute capital receipt in the hands of assessee as the property has gone into re-development - we set aside the findings of the ld. CIT(A) on this issue and direct the AO to delete the addition - Accordingly, the ground is allowed. Penalty u/s 271(1)(c) we find that in the case of assessee, AO cannot impose penalty on the sum being rent paid by the developer on behalf of the assessee for alternative accommodation during the development period as the amount paid by the developer to the assessee could not be taxed in the hands of land owner/assessee in terms of the above order. Therefore, the initiation of pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,362 when the assessee was prevented by reasonable and sufficient cause, within the meaning of section 275 of the Income Tax Act, 1961, to furnish return of total income under section 139(1) of the Act and when the amount of income of Rs. 22,95,849 arising in the hands of the Assessee was duly included in the return filed u/s. 148 of the Act. iv. That, without prejudice to the above, the Assessing Officer failed to appreciate that no penalty could be imposed on the sum of Rs.79,500, being rent paid by Developer on behalf of the Assessee for alternate accommodation during the development period, without appreciating the judicial pronouncements which clearly held that such rent could not be taxed in the hands of the land owner/Assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the assessment proceedings by the ld. AO. During the assessment proceeding, the ld. AO also issued notices u/s 133(6) to M/s. Presidency Nirman Pvt. Ltd. (Developer) and the developer duly in compliance of such notice had filed his reply before the ld. AO. The ld. AO on perusal of such document, he noticed that rent amounting to Rs. 79,500/- was paid by the developer on behalf of assessee for alternative accommodation for the development period and the said income was not considered by the assessee at the time of filing of return of income as he thought that the said amount directly paid by the third party by the developer and the ld. AO added the amount of Rs. 79,500/- in the hands of assessee and also initiated the penalty proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the developer treating the same as income in his hand. Therefore, in such circumstances no further penalty can be imposed upon the assessee since the alleged concealment of income by the authorities below does not come under the purview of income. Therefore, the penalty proceeding initiated by the authorities below is bad in law. In such a situation, the impugned order passed by the authorities below needs to be set aside by the Tribunal. On this context, the ld. AR relied on the decision of co-ordinate bench in the case of Smt. Delilah Raj Mansukhani vs ITO being ITA No. 3526/Mum/2017 wherein Hon ble Tribunal held that displacement of compensation received is not in the nature of income in the hands of assessee. On the other hand, ld. DR s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived compensation of Rs. 19,50,873/- from the developer when the building in which the assessee owned flat went for re-development as per the agreement between the developers and flat owners dated 28.03.2008. The said compensation was paid towards hardship Rs, 13,45,278/-; rehabilitation Rs, 5,90,625/- and for shifting Rs. 15,000/-.We also note that the assessee paid Rs. 18,63,000/- to Joys Developers for acquiring additional area of 138 Sq Ft. It was also noted that the assessee shifted to his own house when the building went for re-development. Now the question before is whether the compensation upon re-development of property towards hardship, rehabilitation and shifting received by the assessee is taxable if the potential TDR/FSI is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty on the sum of Rs. 79,500/- being rent paid by the developer on behalf of the assessee for alternative accommodation during the development period as the amount paid by the developer to the assessee could not be taxed in the hands of land owner/assessee in terms of the above order. Therefore, the initiation of penalty proceeding itself is bad in law. In such a situation impugned order passed by the ld. CIT(A) cannot be sustained, accordingly, we set aside the same and delete the penalty imposed by the AO. 8. Since, we allow issue no. 4 in favour of the assessee. The remaining grounds are connected as well as consequential in nature, therefore need not required to be adjudicated. 9. In the result, the appeal of the assessee is a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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