Case Law Details
Kushal K. Bangia Vs. ITO (ITAT Mumbai) – In principle, though the scope of “income” in s. 2(24) is very wide, a capital receipt is not chargeable to tax as income unless there is a specific provision to that effect. As the residential flat owned by the assessee in the society’s building was a capital asset in his hands, the compensation was a capital receipt.
The department’s argument that the cash compensation was a “share in profits earned by the developer” is not acceptable because it proceeds on the fallacy that the nature of payment in the hands of the payer determines the nature in the hands of the recipient. However, as the said receipt reduced the cost of acquisition of the new flat, it had to be taken into when computing the gains from a transfer thereof in the future
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One question sir. If I inherited a flat from my father who bought it in 1960, in 2003, on his death. The building went into redevelopment in 2014 and I expect to receive my new ready flat in a short time : A. can I sell the new flat immediately ? B. Will I come under long term capital gain if I buy a new residential flat ( on the difference amount ) ?
ITS GOOD GUDGEMENT