Haresh Damji Shah Vs ITO (ITAT Mumbai)
Addition Deleted as Section 56(2)(x) Found Inapplicable on Tenancy Surrender; Alternate Accommodation Treated as Capital Gains; All Additions Removed; Hardship and Relocation Payments Held Capital Receipts, Not Taxable; Entire Addition Set Aside as Joint Tenancy Ignored in Assessment; Stamp Duty and Parking Additions Deleted as Developer-Borne Liabilities
The appeal concerns the assessee’s challenge to the order of the CIT(A) dated 20 June 2025 relating to Assessment Year 2018-19. The assessee raised six grounds of appeal, disputing additions made under section 56(2)(x), denial of capital gains treatment and exemption under section 54F, taxation of various receipts as income, full taxation in his hands despite joint tenancy, addition of stamp duty and registration charges, and violation of natural justice.
The assessee argued that the total addition of ₹1,82,96,708 under section 56(2)(x) was incorrect because the amounts were received in lieu of surrender of tenancy rights under a Permanent Alternate Accommodation Agreement (PAAA). The receipts included immovable property value, parking, hardship compensation, brokerage, shifting charges, transit rent, and stamp duty. He submitted that these were due for valid consideration for surrendering tenancy and therefore section 56(2)(x) did not apply. The assessee further argued that the valuation of ₹1.10 crore adopted by the authorities disregarded the nominal stamp duty value of the PAAA.
