TaxTMI 
TaxTMI 
TaxTMI 
2020 (9) TMI 1044
X X X X Extracts X X X X
X X X X Extracts X X X X
....e fact that the appellant acquired the right of ownership in the flat, which came into existence by virtue of allotment letter dated 10.01.2005 and also by the receipts of payments of Rs. 10,00,000/- and Rs. 20,00,000/- both dated 10.01.2005, issued by the builder viz., Vardhaman Estate Corporation. 3. On the facts and in the circumstances of the case and in law the Ld. CIT(A) has erred in confirming the 'Income from Other Sources' at Rs. 22,75,000/-, instead of Rs. 18,75,000/- by adopting the compensation received against cancellation of the allotment of flat at Rs. 52,75,000/-, in place of correct amount of Rs,48,75,000/-. 4. On the facts and in the circumstances of the case and in law the Ld. CIT(A) has erred in forming opinion that the appellant has repaid excess compensation of Rs. 4,00,000/- after 3 months of receipts of compensation against cancellation of the allotment of flat. Details of compensation received/repaid are as under: S/No. Date of receipt/repaid of compensation Amount of Compensation 1. 13.09.2011 Rs. 25,00,000/- 2. 16.09.2011 Rs. 10,00,000/- 3. 26.11.2011 Rs. 17,75,000/- Rs. 52,75,000/- Less : Excess compensation rece....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 10,00,000/- on 08.01.2005. However, the AO was not convinced with the above explanation of the assessee and came to a finding that the gain which the appellant received from the builder on cancellation of deal has resulted in benefit of compensation of Rs. 18,75,000/- and the same is nothing but income from other sources. Further on analysis of the bank account of the appellant, the AO noticed that the assessee has actually received from the said builder total amount of Rs. 52,75,000/- on the following dates : 1. On 13/09/2011 Rs. 25,00,000/- 2. On 16/09/2011 Rs. 10,00,000/- 3. On 26/11/2011 Rs. 17,75,000/- Total Rs. 52,75,000/- Thus the AO brought to tax Rs. 22,75,000/- (Rs. 52,75,000/- minus Rs. 30,00,000/-) on account of benefit of compensation received by the appellant from the builder in respect of Vardhaman Heights Property, Byculla, Mumbai under the head "Income from other sources". 4. Aggrieved by the order of the AO, the appellant filed an appeal before the Ld. CIT(A). In order dated 15.05.2018, the Ld. CIT(A) observed that the letter dated 10.01.2005 cannot be called as an allotment letter for the reason that (i) the same is a plain letter with no d....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... counsel further submits that the AO has incorrectly computed compensation at Rs. 52.75 lakhs instead of Rs. 42.75 lakhs, the details of which are as under : 1. On 13/09/2011 Rs. 25,00,000/- 2. On 16/09/2011 Rs. 10,00,000/- 3. On 26/11/2011 Rs. 17,75,000/- Total Rs. 52,75,000/- Less : Receipt of excess amount returned to the Builder on 16.12.2011 (Rs. 4,00,000/-) Net Consideration received Rs. 48,75,000/- Also it is explained that in the light of provisions of section 2(14) of the Act, "capital asset" means "a property of any kind" held by the assessee and the term "property" includes any rights in a property and therefore, the right to obtain conveyance of the immovable property is clearly a capital asset as contemplated u/s 2(14) of the Act. Further, it is stated that the exemption from capital gains u/s 54/54F of the Act can be claimed if long term capital gains accrued on transfer of a specified long term capital asset is invested in a residential flat within the specified period. It is stated that the appellant purchased a new flat within the specified period and, as such, denial of the exemption is unwarranted and legally unsustainable. In thi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....treated the compensation on surrender of flats amounting to Rs. 1,10,00,000/- as income from other sources. On appeal by the assessee, the Ld. CIT(A) accepted his claim. On appeal by the Revenue, the Tribunal held as under : "The CIT(A) accepted the claim of the assessee vide Para 3.3 and deleted the addition by observing as under: - 3.3 I have considered the appellant's submissions. Appellant was allotted 3 flats in B-wing of Shubh Residency, D.N. Nagar, Andheri, on 20.6.2008. Appellant had acquired right to the above 3 fiats admeasunng 4200 sq.ft. and allotment date was 20.6.2008. As the builder could not construct the flats, appellant had surrendered - these flats to the builder @ 8833/sq.ft and appellant earned the differential amount of Rs. 1,10,00,000/-. As from the date of allotment to the date of surrender of flat 3 years had elapsed, appellant claimed capital gain and also claimed exemption u/s 54F as appellant had acquired new flat admeasuring 1500 sq.ft @ 10200/sq.ft. for Rs. 1,53,03,800/- vide agreement dated 28.02.2012. However, AO in the assessment order was of the opinion that as builder had not even built the flats then it cannot be considered as extinguishm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....was surrendered and appellant had earned a differential surplus amount of Rs. 1,10,00,000/- after indexation of capital gain by the appellant of Rs. 92,56,014/- and after surrendering the first property appellant purchased another property on which appellant had claimed exemption u/s 54 for Rs. 92,56,014/-. In view of the above Delhi High Court decision, appellant is eligible for claiming of exemption u/s 54 of the Act. Hence, AO is directed to compute the surplus amount received from surrender of flat as capital gain and also allow exemption claimed by the appellant u/s 54 in view of the above case Law and CBDT's circular. Hence, AO's addition of Rs. 1,10,00,000/- is deleted. Grounds of appeal are allowed." Aggrieved, now Revenue is in appeal before us. 4. We have heard rival contentions and gone through the facts and circumstances of the case. We have noted that the above narrated facts are undisputed. The facts clearly show that the extinguishment of assessee's right in Flat No. 1703, 1704 and 1705 proposed building known as "shubh Residency" allotted vide allotment letter dated 20.06.2008 is actually extinguishment of any right in relation to capital asset in view o....