look news india
Ahmedabad: In its decision, the Mumbai bench of the Income Tax Appellate Tribunal said that if the rent compensation is given to the flat owner by the builder due to the redevelopment project, then it will not be taxable. The rent will not be applicable because the flat owner had not taken a rented accommodation anywhere else but he had moved there with his parents.
Usually when a building goes for redevelopment, flat owners are given alternate accommodation by the builder or compensated with monthly rental. A bench of Income Tax Appellate Tribunal Mumbai held that the rental compensation was not income of the taxpayer but a capital receipt. Thus the Mumbai bench upheld the order that the income of the owner of that flat was not taxable.
167 redevelopment projects in the city
: Under redevelopment in the city, 167 societies have been officially registered with the municipality.
Total societies under redevelopment 167
8419 houses will be constructed
837 commercial units to be constructed
Units to be manufactured 9256
In the Ajay Parsmal Kothari case, computer scrutiny was systematically selected and taken under investigation in the financial year 2012-13. In the investigation, the income tax officer said that Kothari had taken money from the builder. Rs 3.7 lakh has been found. Taxpayer Kothari had a flat in Malad and the builder took it for redevelopment for Rs. 3.7 lakh was paid as rent. The income tax officer further said that the taxpayer did not use this amount to rent an alternative house. Thus it has been considered taxable income under income from other sources. For which Kothari had filed an appeal in the Income Tax Tribunal.
The tax tribunal found that even when the taxpayer was living with his parents, he faced difficulty in vacating his flat for redevelopment. Thus, the tax tribunal relied on the earlier decision and held that the rental income was not taxable in this case as well. Apart from this, the tribunal also condoned the delay of 1566 days in filing the appeal.
