AI Structured Summary
Not yet generated for this judgment
Judgment
This assessee’s appeal for assessment year 2020-21, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s order dated 29.10.2025, passed in Case No. NFAC/2019-20/10445154, involving proceedings under section147 r.w.s. 144B of the Income-tax Act, 1961; hereinafter referred to as ‘the Act’.
Case called twice. None appears at the assessee’s behest. He is accordingly proceeded ex-parte.
A perusal of the case records indicates that the assessee/appellant, herein raises his sole substantive grievance against both the learned lower authorities, assessing his compensation received under “RERA" law amounting to Rs. 19,33,867/- from the builder/developer concerned; in the relevant previous year, as income from “other” sources u/s 56 of the Act than that already disclosed as long term capital gains [for short, LTCG]. The learned assessing authority appears to have framed his assessment to this effect on 19.02.2025 which stands uphold in the lower appellate discussion.
The Revenue, vehemently argues in this factual backdrop that both the learned lower authorities’ impugned findings deserve to be upheld as such an interest income is noting but liable to be assessed under the lase head of “other” sources only u/s 56 of the Act.
I have given my thoughtful consideration to the assessee’s and the revenue’s respective pleadings. I find no merit in the Revenue’s vehement contentions supporting the impugned addition. It is made clear first of all that the assessee had admittedly booked plot No. 412, Sector-15, Sunnywood Enclave, Wave City, Ghaziabad, way back in F.Y. 2005-06 which followed various installments paid thereafter, totaling to Rs. 13,13,318/-up to A.Y. 2015-16. There is further no quarrel that he had received total amount of Rs. 32,47,185/- which was indexed to Rs. 23,64,048/- followed by declaration thereof as Long Term Capital Gains to the tune of Rs. 88,83,137/-.
The Revenue’s vehement contention in this factual backdrop is that the impugned compensation is nothing but interest in common parlance liable to be assessed u/s 56 of the Act. It is in this backdrop that the tribunal hereby takes note of section 18(1) of the Real Estate (Regulations and Development) Act, 2016 stipulating “compensation” to be computed as per the prescribed interest rate than interest (inclusive of the payments already made) along with section 2(47)(ii) including an instance of “extinguishment of any rights” in relation to a capital asset as amounting to “transfer” thereof to conclude that such a compensation couldn’t be assessed as income from “other” sources u/s 56 of the Act. I thus find merit in the assessee’s stand that he had rightly declared the aforesaid compensation sum as representing his long term capital gains in very terms. Ordered accordingly.
This assessee’s appeal is allowed.