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2021 (1) TMI 1069 - AT - Income TaxLong term capital loss/gain - loss on cancellation of flat booked - extinguishment of assessee’s right in flat - treating the compensation received as income from other sources as against the same having been treated as part of the sales consideration by the assessee - HELD THAT:- Provisions of MOFA can not regulate the taxability of any income in the form of long term capital gain/loss which may raise from the cancellation of any letter of intent/agreement which is not registered. Therefore, we are inclined to hold that the assessee has rightly calculated the long term capital loss upon the cancellation of letter of intent dated 09.02.2010. We have also perused the provisions of section 2(47) clause (vi) and observed that transfer of capital asset includes transferring or enabling the enjoyment of any immovable property by way of becoming a member of or acquiring a share in a company or by way of any agreement or arrangement or in any other manner whatsoever. The case of the assessee is also squarely covered by the decision of Tribunal in the case of ACIT vs. Ashwin S. Bhalekar [2018 (5) TMI 1887 - ITAT MUMBAI] wherein has held that the extinguishment of assessee’s right in flat in a proposed building is actually extinguishment of any right in relation to capital assets and accordingly held that the compensation receipt upon extinguishment of right which was held for more than 3 years falls under the head “Capital gain” under section 45 - direct the AO to allow the claim of the assessee on account of long term capital loss. - Decided in favour of assessee.
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