Discount on Property Purchased from Broker is Capital Receipt

Assessee has received Rs. 1,81,497/- as brokerage from M/s Ali check Deals.com on which the TDS of Rs. 18,150/- was deducted u/s. 194H of the Act which was a discount on her Jay Pee Property purchased in February, 2010 from All Check Deals in the year 2011-12.

Assessee has not offered the same for taxation as according to her As per the Income Tax Act only the income is to be taxed in the hands of the recipient in whose hands the nature of income is to be decided. It was also stated that in the case of the assessee the income received by her is not a revenue receipt. The very source of her receipt is only the residential flat which is a capital receipt in nature.

On Appeal ITAT Delhi held that any receipt directly and intimately linked with the procurement of capital asset is in the nature of capital receipt and not a revenue receipt.

Relevant Extract of the Judgment

2. Brief facts of the case are that the assessee had filed return declaring income at Rs. 7,98,180/- on 3.8.2012. The case was picked up for scrutiny through CASS. Thereafter a notice u/s 143(2) of the I.T. Act, 1961 was issued on 14.8.2013 fixing the date for compliance therein on 30.8.2013. Subsequently, statutory notices u/s. 142(1) of the I.T. Act alongwith questionnaire issued on 28.11.2014. In response to the notices, the assessee attended the proceedings from time to time and fursnished the necessary details and information as called for. During the year the assessee enjoys income from salary and received the same from M/s Sistema Shyam Teleservices Limited and Dish TV India Limited. During the year AO observed that the assessee has received Rs. 1,81,497/- as brokerage from M/s Ali check Deals.comon which the TDS of Rs. 18,150/- was deducted u/s. 194H of the Act. In this regard, assessee submitted that she had got a discount on her Jay Pee Property purchased in Feb, 2010 from All Check Deals in the year 2011-12. The assessee had not added the receipt of Rs. 1,81,497/- from All Check Deals, in her total income, therefore, Rs. 1,81,497/- was added to the income of the assessee as other income and accordingly, the assessment was completed at Rs. 9,79,680/- vide assessment order dated 20.3.2015 passed u/s. 143(3) of the I.T. Act, 1961.

Please become a Premium member. If you are already a Premium member, login here to access the full content.