Atul Sharma 207 Vs ACIT (ITAT Delhi)
ITAT Delhi held that compensation received for cancelling the allotment due to delayed delivery of the unit is capital receipts and accordingly, the same is not income tax. Thus, appeal of the assessee allowed.
Facts- During assessment proceedings, AO noted that the assessee has not shown the interest income of Rs 59,47,942/- received from Jai Prakash Associates Ltd. The assessing officer has made the total additions of Rs.59,95,462/- as undisclosed interest Rs.59,47,942/-and undisclosed receipt of interest income from DLF utilities Ltd Rs.47520/-.
CIT(A) partly allowed the appeal and directed the AO to re-compute the “Income From Other Sources” after deducting the amount of Rs 24,25,426/-u/s 57(iii) of the Act. Being aggrieved, the present appeal is filed.
Conclusion- It is not disputed that the Jaypee Greens Greater Noida has not handed over the unit to the assessee within 39 months and the assessee has applied for cancellation of the allotment and the allotment was cancelled by the builders and the compensation was calculated by considering interest @12% per annum. The assessee has received the capital receipt of Rs 5947980/- from the Jaypee Greens Greater Noida.
Held that the compensation received by the assessee from Jaypee Greens Greater Noida for cancelling the allotment of unit due to not handed over within time in the sum of Rs 5947980/-is not chargeable to tax in the hands of the assessee.
