TaxTMI 
TaxTMI 
2012 (5) TMI 316
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.... builder and in lieu of the surrender of the flat, the assessee had been allotted new flat of carpet area 1040 sq.ft. and also given cash compensation of Rs. 11,25,800/-. The cash compensation had been invested by the assessee in REC bonds which was claimed as exempt under section 54EC. Since the assessee had acquired the new flat in lieu of the old flat, capital gain arising on account of the transfer of the old flat was treated as exempt under section 54 of the Income tax Act, 1961 (the Act). The assessee submitted before AO that the capital gain computed at Rs. 55,91,866/- was less than the value of the new flat and, therefore, the same was exempt under section 54 of the Act. 2.1 The AO however, observed that for applicability of provis....
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....constructs a residential house within a period of 3 years from the date of transfer. In this case, the assessee had exchanged the old flat with a new flat which amounted to transfer, which was also admitted by the authorities below. Thereafter, the new flat had been built by the builder and possession handed over to the assessee which amounted to construction of a new flat which had been done within a period of 3 years from the date of transfer as the construction of the new flat was completed on 14.6.2007. In this connection, he referred to the letter dated 30.5.2007, of the builder addressed to society in which it was mentioned that possession of the flat would be given on 14.6.2007. The ld. AR also referred to the decision of the Tribuna....
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....at to be constructed by the builder under development agreement which amounts to transfer under section 2(47) of the Act. Thus, the only other condition which is required to be satisfied is that assessee either purchases a new residential flat within the prescribed limit or constructs a new residential flat within a period of 3 years from the date of transfer. The acquisition of a new flat under a development agreement in exchange of the old flat amounts to construction of new flat. This view is supported by the decision of the Tribunal in the case of ITO v. Abbas Ali Shiraz (supra). Therefore, the provisions of section 54 are applicable and assessee is entitled to exemption if the new flat had been constructed within a period of 3 years fr....
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.... of property for 18 months. The AO treated its income as income from other sources and after deducting the rent paid by the assessee for the said period, the sum of Rs. 2,05,706/- was assessed as income from other sources. The assessee disputed the decision of AO and submitted before CIT(A) that the compensation received by the assessee for alternate accommodation was of the nature of capital receipt and, therefore, not taxable. CIT(A) however did not accept the contentions and agreed with the AO that the amount received was revenue receipt taxable under the provisions of the Act. CIT(A) accordingly confirmed the order of AO aggrieved by which assessee is in appeal before us. 6. Before us, the ld. AR for the assessee argued that the compen....
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..... ITO (supra). 7.1 We have perused the said order of the Tribunal. In that case the issue was taxability of cash compensation of Rs. 11,75,000/- as income from other sources. The Tribunal held that the said amount was referable to the capital asset and thus a capital receipt which was not taxable as income from other sources. In that case, the assessee had also received displacement compensation for Rs. 6,12,000/-. However, there was no dispute raised on this issue in the said case. In the present case, cash compensation of Rs. 11,25,800/- had been offered by the assessee as part of consideration of the old flat which has been claimed as exempt on the ground that entire amount had been invested in REC bonds under section 54EC. The dispute ....