Case Law Details
Case Name : Ajay Parasmal Kothari Vs ITO (ITAT Mumbai)
Related Assessment Year : 2013-14
Courts :
All ITAT ITAT Mumbai
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Ajay Parasmal Kothari Vs ITO (ITAT Mumbai)
ITAT Mumbai held that compensation paid by the builder for facing hardship during redevelopment of flats is in nature of capital receipts and accordingly not liable to tax.
Facts- During the assessment proceedings, Assessing Officer observed from the capital account submitted by the assessee that assessee has shown a receipt of of ₹.3,73,191/- as a capital accounts receipt from the builders. It was submitted that assessee was having a flat in Satsang Bharti CHS Ltd., Malad (E), Mumbai and the said building has given for redevelopment and this amount...
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Compensation paid by a builder during the redevelopment of flats is considered a capital receipt, impacting the overall tax treatment for the recipients. This classification recognizes the payment as a return on capital investment rather than income.
Which bracket/head of the ITR should this be declared? Event though its not taxable – how do we show the rent received in ITR?
I have a similar situation wherein I have paid tax on the rent received from the developer during redevelopment of my building from July 2015 to Mar 2020. Is there any way to claim refund now, in view of this judgement from the honourable judges of ITAT. Your suggestion, guidance, advice in this regard would be helpful. Thank you.
TDS was deducted by builder u/s 194H and 194H(a) and return for A.Y. 22-23 was filed offering for taxation under income from other sources. Intimation u/s 143(1) was received.
What is remedy to claim refund of TDS?
Thanks for posting important judgement.
My question is if this hardship amount is treated as capital receipt, do we need to adjust this amount to cost of acquisition for capital gain calculation.
If it is a capital receipt then under which section it is exempt?