2015 (12) TMI 962

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....rcumstances and in law, the ld. CIT (A) has erred in deletion of interest income received by assessee, and treating it as capital in nature, from vendee as per consent decree which stipulated interest @ 18% per annum for delayed payment towards breach of contract? 2. Whether on the facts and circumstances and in law, the ld. CIT (A) erred in treating interest received and tax deducted at source from the same u/s 194A as capital in nature without appreciating fact that compensation has to be fixed and definite in nature to be considered as capital in nature? 2. Facts in brief:- The assessee had entered into an agreement with Mazda Construction Pvt. Ltd., for sale of his office premises owned by assessee and his wife i.e., units n....

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....ring in Form no.26AS where the builder had treated the payment as interest and deducted TDS under section 194A. The Assessing Officer stated that as per the details extracted from 26AS the vendee had treated the impugned payment as interest and had made TDS under section 194A as application to the interest payment. Since the builder had deducted tax and claimed it as revenue expenditure in his books, therefore, the impugned amount was held to be revenue receipt in the hands of the assessee. Accordingly, the Assessing Officer added a sum of Rs. 69,13,649, to the total income of the assessee. 3. Aggrieved, the assessee carried the matter before the first appellate authority, wherein the learned Counsel for the assessee submitted that the A....

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....at receipt towards damages for causing delay by buyer in executing contract of sale of immovable property, is capital receipt not chargeable to tax." Aggrieved, the Revenue is in appeal before the Tribunal. 4. Learned Departmental Representative, before us, has relied on the order of the Assessing Officer. 5. The learned Counsel for the assessee, on the other hand, reiterating the submissions, as were made before the authorities below, submitted that the Assessing Officer has made addition only because the amount appearing in Form no.26AS where the builder has wrongly treated the payment as interest and deducted TDS under section 194A of the Act, though, the amount of Rs. 69,13,459 received by the assessee was compensation for brea....