Case Law Details
Smt. Abha Bansal Vs. Pr. CIT (Central) (ITAT Delhi)
Taxability of the compensation received by the assessee for non-delivery of the Villa under Builder-Buyer Agreement
The compensation received by the assessee on cancellation of the Builder-Buyer Agreement is capital receipt and taxable as capital gains. The view of the A.O. was, therefore, in accordance with Law and cannot be impeached by the Learned PCIT. In view of the above, we do not subscribe to the view of the Ld. D.R. that since no compensation is mentioned in the Builder Buyer Agreement are to be payable as per agreement, then, the compensation is revenue in nature. It is devoid of merit as discussed above. We also do not agree with the submissions of the Ld. D.R. that payment of compensation was a colourable device to evade the taxes. The Ld. D.R. referred to the emails and other papers seized from the computer of Shri Gaurav Jain, Ex-Employee of the M3M Group to support the case of the Revenue. However, we do not agree with such view and discuss this issue separately about the admissibility of the documents found from the computer of Shri Gaurav Jain. In view of the above findings, we hold that the compensation received by the assessee on account of cancellation of the Builder Buyer agreement is capital receipt and was rightly offered as capital gain in the return of income and correctly accepted by the A.O. in the impugned assessment order Dated 18.12.2018. Therefore, the Order of the assessment is in accordance with Law. This issue is decided in favour of the assessee.
FULL TEXT OF THE ORDER OF ITAT DELHI
These appeals by the above Assessees are directed against the different Orders of Learned Pr. CIT (Central), Gurgaon, Dated 24.03.2021 for A.Ys. 2017-2018 under section 263 of the I.T. Act, 1961, challenging the Order under section 263 of the I.T. Act, 1961 on various grounds of appeals.
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