SANDEEP SADASHIV DESHPANDE ,MUMBAI vs. DCIT-CIRCLE -42(3)(1), MUMBAI

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ITA 1790/MUM/2025Status: DisposedITAT Mumbai30 May 2025AY 2011-12Bench: SHRI NARENDER KUMAR CHOUDHRY (Judicial Member), SMT. RENU JAUHRI (Accountant Member)1 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal, following its earlier decisions in similar cases involving the same society and builder, held that the compensation received was exempt. Consequently, the addition made by the Assessing Officer was deleted.

What were the facts?

The assessee received Rs. 6,20,500/- as compensation from a developer for a development agreement. The assessee claimed this amount as exempt, but the Assessing Officer disallowed the exemption and added it to the assessee's income. The CIT (Appeals) upheld the addition.

What were the issues?

Whether the compensation received by the assessee from a developer for a development agreement is taxable or exempt income.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI

Before: SHRI NARENDER KUMAR CHOUDHRY & SMT. RENU JAUHRI

For Appellant: Mr. Vipul Joshi & Ms. Dinkle Hariya
For Respondent: Shri V.K. Chaaturvedi, Ld. Sr. D.R
Hearing: 30.04.2025Pronounced: 30.05.2025

Per : Narender Kumar Choudhry, Judicial Member:

This appeal has been preferred by the Assessee against the order dated 06.02.2025, impugned herein, passed by the Ld. Addl./Joint Commissioner of Income Tax (Appeals) (in short “Ld. Addl./Joint Commissioner”) under section 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2011-12.

2.

In the instant case, the Assessee being a member of society namely MIG Co-operative Housing Society (Bandra East), Group -5, who had entered into development agreement with M/s. Key Stone Realtors Pvt. Ltd. and M/s. Rustomjee Constructions Pvt. Ltd. during the AY under consideration, had received an amount of Rs.6,20,500/- on dated 17.10.2010 from M/s. Key Stone Realtors Pvt. Ltd. and M/s. Rustomjee Constructions Pvt. Ltd. as compensation and claimed the same as exempt. Somehow the Assessing Officer (AO) vide assessment order dated 24.12.2018 u/s 143(3) r.w.s. 147 of the Act, disallowed the said exemption claimed and consequently added the same in the income of the Assessee.

3.

On appeal the Ld. Commissioner, vide impugned order affirmed the said addition. Thus, the Assessee being aggrieved challenged the impugned order by filling instant appeal.

4.

We have heard the parties and perused the material available on record. Admittedly, the tribunal in the case of Narayan Devrajan Iyengar Vs. ITO, Ward 2(2)(1), Mumbai { decided on 10.05.2023} has also dealt with the same society and same issue qua receiving the compensation from the same builder by the then Assessee and by respectfully following the judgment passed by the Tribunal in the case of Lawrence Rebello vs. ITO- 1(30), Indore in order dated 29.09.2021, has ultimately allowed the said compensation being exempt and consequently deleted the identical addition, as involved in this case.

5.

Therefore, respectfully following the judgment of the Hon’ble Co-ordinate Bench of the Tribunal in the aforesaid cases, we are inclined to delete the addition under consideration, thus the same is deleted.

4. In the result, the appeal filed by the Assessee is allowed.

Order pronounced in the open court on 30.05.2025.

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