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2017 (6) TMI 125 - AT - Income TaxReopening of assessment - Held that:- It is possible that with due diligence of the Assessing Officer would have ascertained this fact at the time of assessment, if any also, but in view of the explanation (1) it does not mean that there was no default on the part of the assessee. Hence, reopening u/s.147 is held to be valid. The assessee has tried to take shelter under the exception provided in that section. But as stated above, when the assessee has not disclosed fully and truly the facts necessary for the assessment and there is no assessment u/s.143(3) of the Act, this proviso will not come to its rescue. Consequently, we hold that the entire reassessment proceeding in this case is valid and therefore, the action of the Assessing Officer is upheld. Nature of receipt - Assessment of compensation received - revenue v/s capital receipt - Held that:- The compensation is only to compensate the loss of rental income, which would have arisen to the appellant had the agreement dated 24.3.2003 been honoured by the developer. A perusal of the purchase and compensation agreements shows that the land sold as per the earlier sale agreements is entirely different from the land on which the appellant is acquiring the property. In view of the above it is very clear that the compensation received by the appellant is purely for non fulfillment of contractual obligations with regard to purchase of built up area in “Mantri Chambers” and in no way linked to the sale of the land at “Begur Hobli” in Bangalore South Taluk as per sale agreement dated 30.10.2000 and supplementary agreement dated 9.1.2003. The assessing officer in his well reasoned order has correctly treated the receipts as revenue receipt and has in no way treated the same as income on account of capital gains. Therefore, the appellants’ claims with regard to cost of acquisition or the extinguishment of rights are not accepted. The compensation was received by the appellant, for loss of revenue. Further, compensation has been awarded only by way of agreement dated 15/3/2004. The mere provision of a compensation agreement dated 24.3.2003, does not presuppose the default by the developer receipt of compensation on that count. The claim of compensation fructifies only when Developer failed is his obligations and that happened only on 15/3/2004.The compensation is to be taxed in assessment year 2004-2005 only. In view of this, we dismiss the ground taken by the assessee on merit also.
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