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TMI Blog2024 (11) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... - Sh. Shamim Yahya, Accountant Member And Sh. Sudhir Kumar, Judicial Member For the Appellant : Sh. Yudhisthir Mehtani, CA For the Respondent : Sh. N.K. Bansal, Sr. DR ORDER PER SUDHIR KUMAR, JM: This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-20, New Delhi [hereinafter referred to as CIT(A) ] vide order dated 31.07.2018 pertaining to A.Y. 2014-15 pertaining to arises out of the assessment order dated22.12.2016 under section 143(3)of the Income Tax Act 1961 [hereinafter referred as the Act ]. 2. The assessee has raised following grounds of appeal :- 1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not deleting the entire addition of Rs. 59,47,942/- made by Ld. AO under the head Income from other sources relating to interest received from M/s Jai Prakash Associates Ltd, as compensation and further erred in sustaining the same to the extent of Rs. 35,22,516/- (Rs,59,47,942 Rs. 24,25,426) (Lc. after allowing the interest expenditure) and that too by recording incorrect facts and findings without observing the principles of natural justice. 2. This in any case and in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the possession. The company has paid the amount of Rs 5947940/- by way of damages to compensate the assessee for non-handing over the property with in time. He has further submitted that it is covered matter by the decision of Hon ble Delhi Tribunal in the assessee own case ITA No 5803/Del/2013 Shri Atul Sharma vs ITO in which the Hon ble Tribunal held that the interest received in form of compensation as capital receipt. 5. The Ld DR has supported the order of the lower authorities. He has submitted that the terms and conditions of the allotment were different and the assessee has not filed the terms and conditions of the allotment, so the case is not covered from the assessee s own case. 6. We have heard the parties and perused the material available on record. 7. The Ld CIT(A) has observed in his order as under;- 6.5 The plea of the appellant that the interest of Rs. 24,25,426/- paid on housing loan has a direct nexus with earning of this interest amount received from Jaiprakash Associates Ltd. of Rs. 59,47,982/- and allowable u/s 57(iii) of the Act has been considered on the basis of the documents produced by the appellant regarding the repayment of interest to ICICI Bank on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or not. Accordingly, the assessee has received interest till 01-07-2014 calculated @ 12%per annum amounting to Rs 5947980/- from Jaypee Green Greater Noida. This sum was treated as capital receipt by the assessee. The issue is that the compensation receipt is chargeable to tax or not in the hands of the assessee has been decided by the Hon ble Himachal Pradesh High Court and relied upon decision of assessee s own appeal in ITA No.5803/Del/2013 was allowed by the Hon ble ITAT. The Hon ble High Court held as under :- 2. Briefly stated the facts are that the assessee- Housing Board had floated a self-financing scheme for sale of houses/flats wherein the allottees were required to deposit some amount with the petitioner and construction was to be carried out out of these amounts. One of the conditions of the terms of allotment was that in case the possession of the house/flat is not given to the allottee within a particular time frame then the assessee-Board was liable to pay Interest to the allottees on the money received by it. It appears that there was delay in construction of the houses and thereafter the Housing Board paid interest at the agreed rate to the allottees in terms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otherwise be regarded as interest as interest for the purpose of the statute. Even amounts payable in transactions where money has not been borrowed and debt has not been incurred are brought within the scope of the definition as in the case of a service fee paid in respect of a credit facility which has not been utilized. Even in cases where there is no relationship of debtor and creditor or borrower and lender, if payment is made in any manner in respect of any moneys received as deposits or on money claims or rights or obligations incurred in relation to money, such payment is, by this statutory definition, regarded as interest. 6. Ms. Kuthlala, relying upon the aforesaid observation submits that the allottees had deposited some amount with the Board and now when interest was being paid on this amount the same was interest within the meaning of s. 2 (28A) and in terms of s. 194A of the Act tax at source had to be deducted by the Board. 7. In our view this judgement is not applicable to the facts of the present case. In the case before the High Court the assessee was a company engaged in retail finance services. It had assured the investors that if they invest money with the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of interest to the allottees for delayed completion of flats the same did not fall within the purview of s. 194A of the IT Act. 10. In the present case the allottees had not given the money to the Board by way of deposit nor had the Board borrowed the amount from the allottees. The amount was paid under a self- financing scheme for construction of the flat and the interest was paid on account of damages suffered by the claimant for delay in completion of the flats. 11. In view of the above discussion, we answer both the questions in favour of the assessee and against the Revenue. The appeal is accordingly dismissed with no order as to costs, 9. The plea of the assessee is that he has made repayment of interest of Rs 2425426/- on housing loan to the ICICI Bank. It is not disputed that the Jaypee Greens Greater Noida has not handed over the unit to the assessee within 39 months and the assessee has applied for cancellation of the allotment and the allotment was cancelled by the builders and the compensation was calculated by considering interest @12% per annum. The assessee has received the capital receipt of Rs 5947980/- from the Jaypee Greens Greater Noida. Perusal of the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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