Case Law Details
Smt. Delilah Raj Mansukhani Vs ITO (ITAT Mumbai)
We find that compensation received by the assessee towards displacement in terms of Development Agreement is not a revenue receipt and constitute capital receipt as the property has gone into redevelopment. In such scenario , the compensation is normally paid by the builder on account of hardship faced by owner of the flat due to displacement of the occupants of the flat. The said payment is in the nature of hardship allowance / rehabilitation allowance and is not liable to tax.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The aforesaid appeal has been filed by the assessee against the impugned order dated 10/03/2017, passed by the CIT(A)-46, Mumbai, for the assessment year 2010-11.
2. This appeal has been decided by the order of Co-ordinate Bench dated 12/03/2019, however, inadvertently the ground Nos. 5 & 6 were omitted to be adjudicated and therefore, assessee moved Miscellaneous Application which was allowed by the Bench in MA No.460/Mum/2019 arising out of ITA.3526/Mum/2017 dated 22/01/2020 whereby the said order of the Co-ordinate Bench has been recalled to the limited extent of deciding the ground No.5 & 6 regarding enhancement of assessment on account of rental income for alternate accommodation of Rs.2,60,000/- by ld CIT(A). The grounds are reproduced as under:-
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Will the ruling apply in case the owners had rented out the flats OR were not staying in the premises ? Does the hardship reasoning still apply?
very useful for members who have been harassed by ITO notice for non payment of tax on rent / hardship allowance received from builder on redevelopment.