TaxTMI 
TaxTMI 
2026 (7) TMI 1215
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.... "I. Confirming the addition of Rs. 26,93,950/- by treating the compensation received on surrender of right in immovable property as Income from Other Sources instead of Long Term Capital Loss arising on transfer of a capital asset. 1. The Ld. CIT(A) erred in law and on facts by confirming the addition of Rs. 26,93,950/- for compensation received on surrender of right in immovable property as Income from Other Sources instead of Long-Term Capital Loss arising from transfer of Capital Asset. 2. The Ld. CIT(A) failed to appreciate the facts that: i) On issue of allotment letter by the builder on 11.6.2012 for a Flat No. A1402 in Sai Proviso Aashlesha Building there is a right in immovable property which constitu....
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....Ld. CIT(A) failed to appreciate the fact that; i) On allotment of flat is a right in immovable property consequently it is a Capital Asset as per section 2(14) of the Income Tax Act, 1961. ii) On surrender of right in an immovable property is Transfer as per section 2(47) of the Income Tax Act, 1961. iii) Compensation received on surrender of right in a capital asset is taxable under the head Capital Gains. 3. The Income from transfer of the right in an immovable property is required to be considered as transfer of a capital asset and accordingly to be taxed under the head Capital Gains instead of Income from Other Sources. The Appellant craves leave and reserves the right to add, alter, amend, m....
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....s diversified in investment into various capital assets. The details of various investments were furnished along with fixed asset and investment in mutual fund, loan and advances and other investment. The assessee reiterated that he was allotted Flat No. 1402 in Sai Proviso Aashlesha Building on Plot no. 13,14,15,16, Sector 4A, Kopar Khaine Navi Mumbai. The assessee surrendered the flat and discontinued with the purchase of the said flat sold was sold to Anita U. Kutte and Umesh Kutte. In lieu of surrender of Flat, the builder paid compensation of Rs. 26,93,950/-. The builder deducted TDS under section 194A. The assessee further explained that flat was purchased for a cost of Rs. 81,44,500/-, out of which Rs. 73,30,050/- was paid to the bui....
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....rs of lower authorities carefully. The learned authorised representative (ld AR) of the assessee submits that the assessee was allotted Flat No. 1402 in Sai Proviso Aashlesha Building, Sector 4A, Kopar Khaine Navi Mumbai. By way of allotment letter the assessee got transferrable right in the asset (flat). The assessee held such right in the Flat for a period of 7 years. The assessee surrendered the said flat in favour of Anita U. Kutte and Umesh Kutte, copy of surrender letter dated 03.07.2019 is placed on record. In lieu of surrender of Flat, the builder paid compensation of Rs. 26,93,950/-. The builder wrongly deducted TDS under section 194A. The flat was purchased for a cost of Rs. 81,44,500/-, out of which Rs. 73,30,050/- was paid to th....
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....sessee. We find that the lower authorities have not disputed the allotment of flat in favour of assessee. Further, payment of Rs. 26,93,950/- paid by the builder is also not in dispute. The builder while making the payment deducted in TDS under Section 194A. The assessee has claimed that on surrender/transfer of his right in flat in favour of Anita U. Kutte and Umesh Kutte, he was paid a compensation of Rs. 26,93,950/- in addition to the payment made by assessee to builder. As a result of the assessee suffered long term capital loss. Before us, the Ld.AR of the assessee vehemently argued that mere deduction of tax (TDS) under wrong provision will not determine the nature of receipt in the hand of assessee. We are conscious of the facts that....
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.... include, the sale, exchange or relinquishment of the asset or the extinguishment of any rights therein. Thus, the right to obtain a conveyance of immovable property fell within the expression 'property of any kind 'used in section 2(14) and was, consequently, a capital asset. The Hon'ble High Court further held that the assessee acquired under the agreement for sale the right to have the immovable property conveyed to him. He was under the law entitled to exercise that right not only against his vendors but also against a transferee with notice or a gratuitous transferee. He could assign that right what he acquired under the agreement for sale was, therefore, property within the meaning of the Act and, consequently, a capital asset....