TaxTMI 
TaxTMI 
2020 (4) TMI 685
X X X X Extracts X X X X
X X X X Extracts X X X X
....mstances of the case and in law, the amount of Rs. 33,75,000/- received by the appellant in terms of the option agreement is a capital receipt and is hence not chargeable to tax. The above legal ground was not taken before the Ld. ClT(A), and in view of all the facts available on record, the same is being raised before this Hon'ble Tribunal. Ground No.2: 2.1 Without prejudice to the above. On the facts and in the circumstances of the case and in law, the learned CIT(A} have erred in holding that the amount of Rs. 33,75,000/- received as per the op lion agreement is chargeable to tax under the head 'Income from house property' vis-a-vis under the head 'Income from Other sources' as claimed by th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....No.3 & 4 has been let out to M/s First Data (India) Pvt. Ltd., as per rent agreement dated 15/04/2010. The Unit No.1 & 2 are vacant, but the assessee has entered into an option agreement with M/s First Data (India) Pvt.Ltd. for a period of 9 months with a covenent that the property shall not be let out to a third party, without the consent of the tenant for a period of 9 months, for which a compensation of Rs. 33,75,000/- has been fixed and said compensation has been offered to tax under the head income from other sources. During the course of assessment proceedings, the Ld. AO noticed that the assessee has declared loss of Rs. 10,06,170/- under the head income from other sources. The Ld. AO, further noted that the assessee has shown com....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e under the head income from house property at Rs. 76,64,328/-, after allowing standard deduction @30% on total ALV of the property. 4. Being aggrieved by the assessment order, the assesee preferred an appeal before the Ld.CIT(A). Before the Ld.CIT(A), the assessee has filed elaborate written submissions on the issue along with various evidences. The assessee has also furnished a copy of option agreement entered into with M/s First Data (India) Pvt.Ltd. to give an option to the party to let out unit No.1 and 2. The additional evidences filed by the assessee in form of option agreement has been forwarded to the Ld. AO for his comments, and the Ld. AO vide his remand report, dated 14/07/2017 has rejected additional evidences filed by the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....accordance with provisions of section 22 of the I.T.Act, 1961, as per which the annual let out value of the property shall be the value, which, the property might fetch in the market. Since, the ld. AO has taken market value of the property on the basis of unit No.3 & 4 let out by the assesse to M/s. First Data (India) Pvt.Ltd., there is no reason to deviate from the Annual Value determined by the Ld. AO and accordingly, affirmed the findings of the ld. AO and reject ground taken by the assessee. 5. The Ld. AR for the assessee submitted that the Ld.CIT(A) has erred in holding that compensation received as per the option agreement is chargeable under the head income from house property vis-a-vis under the head income from other sources as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erit in the arguments of the Ld. AR for the assessee that amount is taxable under the head income from other sources, because the amount received from the party is in pursuance on agreement to let out the property and accordingly, the ALV of the property needs to be computed in accordance with provisions of section 22 & 23 of the I.T.Act, 1961. The Ld. AO, as well as the Ld. CIT (A) has brought out clear facts to the effect that ALV of the property shall be computed in accordance with provisions of section 22 of the Act and hence, there is no reason to interfere with findings of the Ld.CIT (A). 7. We have heard both the parties, perused the material available on record and gone through orders of the authorities below. The provision of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r the municipal rateable value has to be considered. 8. In this legal background, if you examine facts of present case, one has to see whether the AO was right in determining ALV of the property in accordance with provisions of section 23, when the property in question was let out and was under a covenent during the year under consideration. As per the claim of the assesee, the property was not let out, but was under covenent by an option agreement between the parties, as per which the assessee has given an option to the existing tenant of unit No.3 & 4 to take on rent unit No.1 and 2 within a period of 9 months on mutually agreed rate of rent. Further, as per the said agreement, option was valid for a period of 9 months, for which the a....