2017 (2) TMI 1567

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..... stated that he is not interested in prosecuting the ground regarding disallowance u/s 14A read with section Rule 8D of the Act i.e. the Ground No.2. Accordingly, the ground no.2 is dismissed as not pressed. 3. The only surviving issue remains is as against the order of CIT(A) confirming the action of the AO in treating the receipts of compensation from developer to compensate for a nuisance / inconvenience due to extension of work untaken by the builder for building "Kailas Jyot No.2", as income from other sources u/s 56 as against the claim of the assessee being capital receipt. For this assessee has raised following ground No.1: - "The Honorable CIT (A) - 10, erred in upholding that the receipt of Rs. 2,41,333/- being compensation rece .....

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..... of the case of co-ordinate Bench in case of Kushal K Bangla v. Income Tax Officer (2012) 50 SOT 1 (MUM), wherein exactly on identical facts, Tribunal has held the similar receipt as capital receipt in taxable by observing in Para 4 as under: - " In our considered view, it is only elementary that the connotation of income howsoever wide and exhaustive, take into account only such capital receipts are specifically taxable under the provisions of the Income tax Act. Section 2(24)(vi) provides that income includes "any capital gains chargeable under section 45", and, thus, it is clear that a capital receipt simplicitor cannot be taken as income. Hon'ble Supreme Court in the case of Padmraje R. Kardambande vs CIT (195 ITR 877) has observe .....

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..... earned by the developer which are essentially revenue items in nature. This argument however proceeds on the fallacy that the nature of payment in the hands of payer also ends up determining it's nature in the hands of the Assessment year: 2007-08 recipient. As observed by Hon'ble Supreme Court in the case of CIT vs. Kamal Behari Lal Singha (82 ITR 460), "it is now well settled that, in order to find out whether it is a capital receipt or revenue receipt, one has to see what it is in the hands of the receiver and not what it is in the hands of the payer". The consideration for which the amount has been paid by the developer are, therefore, not really relevant in determining the nature of receipt in the hands of the assessee. In vie .....

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