TMI Blog2024 (2) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee, the amount received was in the nature of capital receipt and not as such taxable in the hands of the assessee it is nothing but rehabilitation allowance and constitutes capital receipt as the property has gone into re-development HELD THAT:- We find that Co-ordinate Bench of this Tribunal in the case of Kushal K. Bangia [ 2012 (2) TMI 29 - ITAT MUMBAI] have answered the question in favour of the assessee by holding it to be capital receipt not liable to tax. Hardship Compensation given to the assessee pursuant to the re-development agreement is a capital receipt and cannot be treated as revenue receipt as held by the AO/Ld. CIT(A). The reliance placed by AO/Ld. CIT(A) on the case law of the Hon ble Supreme Court in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee was reopened u/s 147 of the Income Tax Act, 1961 (hereinafter the Act ) for the reason that even though assessee received Rs. 25,21,508/- from developer/builder M/s. DB-MIG Realtors and Builders Pvt. Ltd. (hereinafter Builder ) have not offered for tax the said receipt, which according to the AO escaped assessment. The assessee replied to the AO that she had a flat (C- 12/96) in the residential society [MIG Co-operative Housing Society Ltd, Bandra (East)] and as per terms of the re-development agreement dated 31.10.2010, she received Rs. 25,21,508/- from the developer/builder as Hardship Compensation . According to the assessee, the amount received from the builder was capital receipt and therefore not liable to be tax. Howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the housing society and therefore, its character is revenue in nature. And therefore, he added the same i.e. Rs. 25,21,508/- as revenue receipt in the form of dividend under the head income from other sources . Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) who confirmed the action of the AO. Aggrieved, the assessee is before us. 4. We have heard the Ld. DR and perused the records. We note that the assessee was a resident of flat being member of the housing society (supra), who received Rs. 25,21,508/- from the developer as Hardship Compensation in terms of the re-development agreement dated 31.10.2010, by which the flat occupied by assessee was surrendered and handed over to builder for re-development, and would re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. 4. 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 observed that ..,, we hold that the amounts received by the assessee during the financial years in question have to be regarded as capital receipts, and, therefore, (emphasis supplied by us), are not income within meaning of section 2(24) of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 view of these discussion, in our considered view, the receipt of Rs. 11,75,000 by the assessee cannot be said to be of revenue nature, and, accordingly, the same is outside the ambit of income under section 2(24) of the Act. However, in our considered opinion and as learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be capital receipt not liable to tax. We find that the issue involved in the instant case is squarely covered by the decision of the Tribunal (supra) and therefore, we are of the opinion that Hardship Compensation given to the assessee pursuant to the re-development agreement is a capital receipt and cannot be treated as revenue receipt as held by the AO/Ld. CIT(A). The reliance placed by AO/Ld. CIT(A) on the case law of the Hon ble Supreme Court in the case of M/s. Bangalore Club v CIT 156 Taxman 323 is not relevant on the issue in hand. Therefore, the AO/Ld. CIT(A) erred in law holding that hardship compensation received by the assessee from the builder was in nature of the dividend in the hands of the assessee/member of the housing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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