Case Law Details
Case Name : Smt. Delilah Raj Mansukhani Vs ITO (ITAT Mumbai)
Related Assessment Year : 2010-11
Courts :
All ITAT ITAT Mumbai
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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.
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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.