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2012 (2) TMI 29 - AT - Income TaxTaxability of Cash compensation received – capital receipt vs Revenue receipt - assessee being member of a housing society received flat in new multistoreyed building, displacement compensation and cash compensation in lieu of demolishment of the old residential building owned by the housing society – Held that:- Capital receipt in principle is outside the scope of income chargeable to tax. It is not even the case of the A.O. that the compensation received by the assessee is in the revenue field, and rightly so because the residential flat owned by the assessee in society building is certainly a capital asset in the hands of the assessee and compensation is referable to the same. Further, Supreme Court in the case of CIT vs. Kamal Behari Lal Singha (1971 (8) TMI 15 - SUPREME Court) has held 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. Therefore, receipt of ₹ 11,75,000 by the assessee cannot be said to be of revenue nature. However it is agreed that the same will be taken as part of cost of acquisition of new flat – Decided in favor of assessee.
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