Surrender of flat booking rights gives rise to capital gains and is not an income from other sources

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Surrender of flat booking rights gives rise to capital gains and is not an income from other sources

ITA No. 6822/Mum/2016), LD/68/03, Assistant Commissioner of Income Tax Vs. Ashwin S. Bhalekar, 21/05/ 2019
Surrender of flat booking rights gives rise to capital gains and is not an income from other sources.
Assessee had made an advance payment towards allotment of flats around 4 years ago. Due to some
legal issues, the builder could not construct the flats and so a compensation amount was paid by
the builder to assessee for surrendering his rights in the proposed flats. Assessee’s claim under section
54 against investing this compensation amount in a new residential property was allowed by ITAT.
Revenue’s stand that such receipt of compensation was an income from other sources was rejected by the ITAT.

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