9911796707
TMI Blog2023 (5) TMI 1362X X X X Extracts X X X X X X X X Extracts X X X X ..... of the flat. In the present case, we find that the assessee has already offered to tax an amount of Rs.1,31,800, out of Rs.10,85,679, being his share of the rent for alternate accommodation and has only disputed the addition - Therefore, we direct the AO to delete the addition on account of rent for alternate accommodation received by the assessee. Assessee appeal allowed. - SHRI G.S. PANNU, PRESIDENT AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER For the Assessee : Dr. K. Shivaram a/w Shri Rahul Hakani For the Revenue : Shri Dilip K. Shah ORDER PER BENCH The present appeal has been filed by the assessee challenging the impugned final assessment order dated 15/11/2022, passed under section 147 r/w section 144C(13) of the Income Tax Act, 1961 ( the Act ), pursuant to the directions dated 26/10/2022 issued by the learned Dispute Resolution Panel 2, Mumbai 1 [ learned DRP ], under section 144C(5) of the Act for the assessment year 2015 16. 2. In this appeal, the assessee has raised the following grounds: 1. On facts, in circumstances of the case and in law, re opening of assessment, under section 147 is bad in law assessment, under section 147 is bad in law. 2. On facts, in circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d thus has escaped assessment. Accordingly, notice under section 148 of the Act was issued and served on the assessee on 31/03/2021. In response to the said notice, the assessee filed his return of income on 17/09/2021. Subsequently, notices under section 143(2) as well as section 142(1) of the Act along with a questionnaire were issued and served on the assessee. During the reassessment proceedings, the assessee was asked to provide the details of considerations received from M/s Keystone Realtors Pvt. Ltd. and M/s Rustomjee Constructions Pvt. Ltd. In response thereto, the assessee submitted that amount of Rs.64 lakhs is a corpus fund and therefore, it is a capital receipt and is not taxable. The Assessing Officer ( AO ) vide draft assessment order dated 29/01/2022 passed under section 144C of the Act held that the assessee received compensation towards the redevelopment of his flat as an additional benefit other than a new flat against the old one and therefore the amount of Rs.64 lakhs received as compensation from the Developer/Builder would not partake the nature of capital receipt and is an additional income of the assessee. Accordingly, the AO made an addition of the sum of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement, the compensation amount shall be handed over by the Developer to the Society for and on behalf of the members and the Society shall give a valid and sufficient discharge with regard to the same to the Developer, and the Society agrees and undertakes to forth with hand over to the members the respective pay orders, only on such individual members signing and handing over to the Society the consent letter. Out of Rs.80 lakhs, the assessee received Rs.16 lakhs in the financial year 2013-14. As per the Revenue, the balance amount of Rs.64 lakhs was received by the assessee in the year under consideration. Since this amount was not considered as income by the assessee in his return of income by treating the same as capital receipts, reassessment proceedings were initiated in the case of the assessee and vide assessment order passed under section 147 r/w section 144C(13) of the Act, the aforesaid receipt of Rs.64 lakhs was treated as taxable in the hands of the assessee as Income from Other Sources . As per the assessee, the corpus amount is paid to the society/members during redevelopment in almost all redevelopment projects to compensate for hardship arising out of redevelopme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as and when occasion arises for computing capital gains in respect of the said asset. Subject to these observations, the appeal of assessee is allowed. Respectfully following the above observations of the ITAT Mumbai Bench as well as the orders cited supra, we are compelled to hold that the benefit received by the assessee in the form of bigger size of flat and amount received as hardship allowance from the developer is a capital receipt, which cannot be treated as revenue receipt for taxing as income. 9. Since in the present case also the taxability of receipt of similar nature, i.e. hardship allowance is involved, therefore, respectfully following the aforesaid decision the addition of Rs.68 lakhs made by the AO vide impugned order is set aside and ordered to be deleted. 10. Separately, as per clause 4B of the aforesaid Re-development Agreement, it was agreed that in addition to the monetary consideration, in order to enable the members to meet their obligation for the alternate accommodation, the Developer shall pay to the members an amount to facilitate members arrange for temporary alternative accommodation to be computed on the basis of Rs.171 per sq. ft. per month of the e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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