MOHAMMED FAKHRE ALAM SHAIKH,MUMBAI vs. COMMISSIONER OF INCOME TAX (A)-52, MUMBAI

ITA 6513/MUM/2024Status: DisposedITAT Mumbai07 April 2025AY 2016-17Bench: SHRI B.R. BASKARAN (Accountant Member), SHRI ANIKESH BANERJEE (Judicial Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the flat allotted to the assessee as compensation for creating nuisance to the developer constitutes a capital receipt and is not taxable income. The Tribunal relied on a coordinate bench decision with identical facts.

What were the facts?

The assessee, an individual, declared an income of Rs. 11.04 lakhs. He was allotted a flat worth Rs. 2.59 crores by a developer for surrendering his rights to a piece of land where he was an illegal occupant. The AO treated this allotment as income taxable under Section 56(2)(vii)(b) and denied deduction under Section 54F, a view confirmed by the CIT(A).

What were the issues?

Whether the value of a flat allotted as compensation for nuisance caused to a developer is taxable income or a capital receipt? Whether deduction under Section 54F is allowable in such a scenario?

Which sections of the Income-tax Act were involved?

Section 56(2)(vii)(b),Section 54F,Section 45,Section 2(24)

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Income Tax Appellate Tribunal, MUMBAI “D” BENCH : MUMBAI

Before: SHRI B.R. BASKARAN & SHRI ANIKESH BANERJEE

PER B.R. BASKARAN, A.M :

The assessee has filed this appeal challenging the order dt.17-10-2024 passed by the Ld. Commissioner of Income Tax (Appeals)-52, Mumbai [„Ld.CIT(A)‟] and it relates to AY.2016-17. The assessee is aggrieved by the decision of the Ld.CIT(A) in confirming the addition of Rs. 2.59 crores made by the AO u/s. 56(2)(vii)(b) of the Income Tax Act, 1961 („the Act‟) and also in confirming the disallowance of deduction claimed u/s. 54F of the Act.

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2.

The facts relating to the case are stated in brief. The assessee is an individual and he filed his return of incomefor the year under consideration declaring a total income of Rs.11.04 lakhs. The

The order continues below.

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