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TMI Blog2025 (4) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... x Act, 1961 ("the Act") and also in confirming the disallowance of deduction claimed u/s. 54F of the Act. 2. The facts relating to the case are stated in brief. The assessee is an individual and he filed his return of income for the year under consideration declaring a total income of Rs. 11.04 lakhs. The AO noticed from AIR information that the assessee has carried out a property transaction for a value of Rs. 2.59 crores. When questioned about the same, the assessee submitted that he was occupying a portion of land in Survey No. 243 of Tardeo Division and the above said land underwent development. The developer was M/s. Neel Kamal Realtors and Builders Pvt. Ltd. The assessee surrendered his rights on that property and in lieu of the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee was occupying a shed illegally in the land proposed to be developed by M/s. Neel Kamal Realtors and Builders Pvt. Ltd. Since the assessee's name was not included in the list of tenants that was submitted to the MCGM and/or MHADA, the assessee filed a suit against the builder claiming to be a lawful occupant. When the suit was pending, a court settlement was reached between the assessee and the said builder, as per which the assessee was allotted a flat. He submitted that the assessee was occupying the shed for so many years and hence, the compensation received by the assessee shall constitute Long Term Capital Asset against which, the cost of new flat should be allowed as deduction u/s. 54F of the Act. In the alternative, the Ld.AR submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on under the Income Tax Act? We notice that an identical issue has been considered by the Co-ordinate Bench of the Tribunal in the case of Shri Kishre D.P. vs. Income Tax Officer (supra); wherein it was held that the compensation received for creating a nuisance is a capital receipt. For the sake of convenience, we extract below the decision rendered by the Co-ordinate Bench of the Tribunal in the above said case:- "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 again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) also confirmed the action of the AO. Now, before us the learned Counsel for the assessee stated that this issue is squarely covered in favour of assessee by the decision of coordinate Bench in various case and one 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 gain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder exemption or not, it is for the assessee to establish". The only defence put up by learned Departmental Representative is that cash compensation received by the assessee is nothing but his share in profits 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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