HARESH DAMJI SHAH, MAHALAXMI BUILDING, HINDU COLONY vs. ITO, WARD 20(1)(1), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘E’ BENCH MUMBAI
BEFORE: SHRI PAWAN SINGH, JUDICIAL MEMBER AND SMT. RENU JAUHRI, ACCOUNTANT MEMBER
Haresh Damji Shah
90/4,Mahalaxmi BuildingNo.1,
Hindu Colony, Road No 3,
Dadar T.T., Mumbai- 400014,
Vs.
ITO, Ward 20(1)(1)
Piramal Chambers, Lalbaug,
Mumbai 400012,
PAN: AACPS 1856 Q
(Appellant)
..
(Respondent)

Assessee by Shri. Pradip Kapasi CA
Revenue by Shri. Ritesh Mishra, CIT-DR
Date of Hearing
25/08/2025
Date of Pronouncement
13/10/2025

Order under section 254(1) of Income Tax Act

PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of Learned Commissioner of Income Tax (Ld. CIT(A)) dated 20.06.2025 for A.Y. 2018-19. The assessee was raised following grounds of appeal. “GROUND NO. 1: Addition u/s. 56(2)(x)

The L.d. CIT(A) erred in law and on facts in confirming the action of the Lad.AO in adding an amount of Rs 1,82,96,708 in aggregate under the head 'Income from other sources in respect of the following items ignoring the fact that such amounts were due/receivable in lieu of surrender of tenancy rights under the Permanent
Alternative Accommodation Agreement ('PAAA') executed for surrender of tenancy rights of the residential premises and was due for lawful, adequate and valid consideration and the provisions of s.56(2)(x)was not applicable and further erred in valuing the receipt/income of the PAAA at Rs. 1,10,01,000 ignoring the fact that the stamp duty value of the said PAAA was nominal and insignificant.

S.No Description

Amount
1 Value of immovable property

Rs. 1,10,01,000/-
2. Car Parking

Rs 7,31,501/-
3. Hardship Compensation

Rs.15,87,555/-
4. Brokerage

Rs.1,16,978/-
5. Shifting Charges

Rs 20,000/-
6. Transit rent for 33 months

Rs.42,59,174/-
7. Stamp duty and registration fee

Rs.5,80,500/-

TOTAL

Rs.1,82,96,708/-

GROUND NO. 2: Capital Gains and Exemption u/s. 54F
Haresh Damji Shah
2

Without prejudice to Ground No.1, the Ld. CIT(A) erred in law and on facts in confirming the action of the Ld AO in NOT computing the Income on surrender of tenancy rights as the Income under the head 'capital gains' and further erred in law in denying the exemption u/s. 54F on reinvestment of the net consideration in acquiring the residential premises and further erred in holding that there was "no sale or transfer of tenancy rights occurred for monetary consideration, negating
5.45 applicability leading to inapplicability of s.54F exemption in the absence of capital gain".

GROUND NO. 3: Taxing Capital Receipts not liable to Tax

Without prejudice to the Ground No. 1&2, the Ld. CIT(A) erred in law and on facts in confirming the action of the Ld.AΟ; i. In taxing the hardship compensation of Rs.15,87,555, the shifting charges of Rs.20,000, the compensation of Rs 42,59,174, for shifting to temporary alternative accommodation on rent and brokerage of Rs.1,15,978 all of which was due for bearing with personal inconvenience and the hardship faced on account of submitting the residential premises to redevelopment and for shifting compulsorily to another location and accommodation.

ii. in bringing to tax the said amounts in the year under consideration without appreciation of the fact that such amounts were received /receivable in different years.

iii. again, in ignoring the fact that such amounts or part thereof were offered for taxation by a appellant from time to time in different years.

iv. once again in not allowing the deduction for the actual expenditure incurred by your appellant towards shifting charges, brokerage and rent for the temporary accommodation.

v. in not following the several decisions of the Tribunal and High Court on the subject where such receipts were held to be not liable to tax.

GROUND NO. 4: Taxation of 100% of receipt/income in hands of appellant who was a 50% co-owner

Without prejudice to Ground Nos. 1,283, the Ld. CIT(A) erred in law and on facts in confirming the action of the Ld.AO in making an entire addition of Rs.1,82,96,708 in aggregate in the hands of the appellant only who was a co- tenant of the residential premises with his wife and both of them were entitled to receive and had received the benefits in equal shares in lieu of the surrender of tenancy rights in respect of one and the same premises under one and the same
PAAA. Agreement for Permanent Alternate Accommodation was also in joint name and not in single name of appellant.

GROUND NO. 5: Addition of Rs. 5,80,500 for the liability of the Developer of stamp duty and registration charges

Without prejudice to Ground Nos. 1,2,3 & 4, the Ld. CIT(A) erred in law and on facts in confirming the action of the Ld.AO in making an addition of Rs.5,80,500
representing the contractual liability of the stamp duty and registration fees ignoring the fact that under the said PAAA the said payments were the responsibility and the liability of the Developer alone which was paid by him and the appellant had not paid any amount nor he had received the said amount.
Haresh Damji Shah
3

GROUND NO. 6: Violation of Natural Justice

The Ld.CIT(A) erred in law and on facts in ignoring the overwhelming submissions made before him in writing and also ignoring the direct decisions on the subject forming part of the judicial proceedings and holding that no sale or transfer of tenancy rights occurred inspite of the PAAA, a copy whereof was furnished to him.

The appellant craves for leave to add, amend, alter or delete any of the grounds of appeal.

Each of the grounds here before are independent of each other.”