NIRANJAN SHRICHAND MATTA, MUMBAI V. ITO 19(1)(1), MUMBAI

ITA 987/MUM/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7093 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 15-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 12-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T A KHAN
• Assessee Lawyers: V D PARMAR
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Fair market value; Assessment record; Capital receipt
• Section: 80C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.987/M/2014 ASSESSMENT YEAR: 2009-10 MR. NIRANJAN SHRICHAND MATTA, SANNIDHI, PLOT NO.721, 4 TH FLOOR, FLAT NO.401, 12 TH ROAD, KHAR (W), MUMBAI 400 052 PAN: AIXPM 1910G VS. ITO 19(1)(1), R.NO.319, 3 RD FLOOR, PIRAMAL CHAMBERS, LALBAUG PAREL, MUMBAI 400 012 (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SHRI V.D. PARMAR, A.R. REVENUE BY : SHRI T.A. KHAN, D.R. DATE OF HEARING : 24.05.2018 DATE OF PRONOUNCEMENT : 22.06.2018 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 02.12.2013 OF THE COMMISSIONE R OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2009-10. 2. THE VARIOUS GROUNDS RAISED BY THE ASSESSEE ARE A S UNDER: BEING AGGRIEVED BY THE ORDER OF THE COMMISSIONER O F INCOME TAX (APPEALS)- 30, MUMBAI (HEREINAFTER REFERRED TO AS LEARNED CIT( A) ) DATED 30.12.2013 UNDER SECTION 250, THE APPELLANT SUBMITS THIS APPEA L ON THE FOLLOWING GROUNDS EACH OF WHICH MAY PLEASE BE CONSIDERED WITH OUT PREJUDICE TO ONE ANOTHER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW:- 1. LONG TERM CAPITAL GAIN ('LTCG') ON SALE OF FLAT ITA NO.987/M/2014 MR. NIRANJAN SHRICHAND MATTA 2 1.1 THE LEARNED CIT (A) ERRED IN CONSIDERING THE SH ARE OF THE ASSESSEE IN THE SALE CONSIDERATION OF FLAT SOLD AT RS, 44,26,083 IN STEAD OF RS. 43,33,300/- AS CONSIDERED IN THE RETURN FILED BY THE ASSESSEE. 1.2 THE LEARNED CIT (A) FURTHER ERRED IN NOT ALLOWI NG INDEXATION ON THE COST OF IMPROVEMENT OF RS. 95,000/-. 1.3 THE LEARNED CIT (A) FURTHER ERRED IN DISALLOWIN G BROKERAGE & LEGAL FEES INCURRED IN RELATION TO SALE OF FLAT TO THE EXTENT OF RS.8,500/-. 1.4 THE LEARNED CIT (A) FURTHER ERRED IN CONSIDERIN G TAXABLE LTCG AT RS.5,31,085/-. 2. INCOME FROM OTHER SOURCES 2.1 THE LEARNED CIT (A) ERRED IN ADDING BACK AN AMO UNT OF RS. 2,66,800/- AS INCOME FROM OTHER SOURCES, WHICH WAS RECEIVED BY THE APPEL LANT AS COMPENSATION TOWARDS TEMPORARY ALTERNATE ACCOMODATION. 2.2 THE LEARNED CIT (A) FURTHER ERRED IN NOT APPREC IATING THE FACT THAT THE COMPENSATION RECEIVED WAS NOT IN NATURE OF A COMMER CIAL TRANSACTION. 2.3 THE LEARNED CIT (A) FURTHER ERRED IN NOT APPREC IATING THE FACT THAT THE COMPENSATION WAS RECEIVED WAS FOR THE DISLOCATION A ND HARDSHIP CAUSED TO THE APPELLANT 2.4 THE LEARNED CIT (A) FURTHER ERRED IN CONSIDERIN G THE COMPENSATION AS A REVENUE RECEIPT INSTEAD OF CAPITAL RECEIPT. 3. DEDUCTION UNDER CHAPTER VI-A 3.1 THE LEARNED CIT (A) ERRED IN DISALLOWING DEDUCT ION UNDER SECTION 80C TO THE EXTENT OF RS. 17,071/-. 4. GENERAL 4.1 THE LEARNED CIT (A) DEPRIVED THE APPELLANT OF A DEQUATE OPPORTUNITY TO REPRESENT HIS CASE. 4.2 THE APPELLANT PRAYS TO YOUR HONOUR TO CANCEL TH E ORDER PASSED BY THE LEARNED CIT(A) UNDER SEC. 250 AND PRAYS TO ALLOW THE CORREC T AMOUNT OF EXPENSES AND DEDUCTION CLAIMED AS REFERRED TO IN THE GROUNDS HER EINBEFORE OR ALTERNATIVELY PRAYS TO GRANT SUCH RELIEF AS YOUR HONOUR MAY DEEM FIT. 4.3 THE APPELLANT CRAVES LEAVE TO ADD, DELETE, WITH DRAW AND/OR MODIFY ANY ONE/MORE OR ALL THE ABOVE GROUNDS OF APPEAL ON OR B EFORE THE DATE OF FINAL HEARING. ITA NO.987/M/2014 MR. NIRANJAN SHRICHAND MATTA 3 3. THE ISSUE RAISED IN SUB GROUND NO.1.1 IS AGAINST THE ORDER OF LD. CIT(A) TAKING THE ASSESSEES SHARE IN THE SALE CONSIDERATION OF THE FLAT SOLD AT RS.44,26,083/- INSTE AD OF RS.43,33,300/- AS SHOWN BY THE ASSESSEE WHILE COMP UTING THE LONG TERM CAPITAL GAIN. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE ENTERED INTO DEVELOPMENT AGREEMENT IN RESPECT OF A PLOT OF LAND IN WHICH HE WAS ONE OF THE CO-OWNERS. THE SAID PROPERTY WAS I NHERITED BY THE ASSESSEE ON DEATH OF HIS FATHER WHO WAS ALSO A CO- OWNER IN THE SAID PROPERTY WITH HIS THREE BROTHERS. THE TOTAL CONSIDERATION WAS RS. 3,99,00,000/- OUT OF WHICH THE SHARE OF ASSESSEE FAMILY WAS RS. 1,33,00,000/- IN WHICH THE A SSESSEE HAS 1/4 TH SHARE. THUS ASSESSEE CALCULATED THE LONG TERM CAPIT AL GAIN BY TAKING SALES CONSIDERATION OF RS. 43,00,000/- . THE AO RECALCULATED THE CAPITAL GAIN BY TAKING THE SALE PR ICE [UNDER SECTION 50C(1) OF THE ACT] AT RS.44,26,083/- AS AGAINS T THE ACTUAL SHARE OF THE ASSESSEE OF RS.43,33,300/-. THE AO SUBSTITUTED THE ACTUAL SALE CONSIDERATION WITH THE FAIR MARKET VALUE ON THE BASIS OF SALE DEED AND THUS FRAMED THE ASSESSMENT BY MAKING AN ADDITION OF RS. 5,31,085/- TOWARDS LONG TERM CAPITAL GAIN BY REJECTING THE INDEXATION ON THE COST OF IMPROVEMENT AND ALSO NOT ALLOWING PART OF THE CO MMISSION PAID IN CONNECTION WITH THE SAID TRANSFER. 5. THE LD. CIT(A) UPHELD THE ACTION OF THE AO OF TAK ING THE SALE CONSIDERATION EQUAL TO FAIR MARKET VALUE AFTER TAKING INTO CONSIDERATION THE CONTENTIONS OF THE ASSESSEE. ITA NO.987/M/2014 MR. NIRANJAN SHRICHAND MATTA 4 6. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE DIFFERENCE BETWEEN THE FAIR MARKET VALUE AND ACTUAL SALE CONSIDERATION RECEIVED BY THE ASSESSEE IS LESS THAN 10% AND THEREFORE NO ADDI TION CAN BE MADE ON THAT ACCOUNT. THE LD. A.R. RELIED ON THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. JOHN FLOWER (INDIA) PVT. LTD. VS. DCIT IN ITA NO.7545/M/201 4 FOR A.Y. 2010-11 WHEREIN THE TRIBUNAL HAS HELD AS UNDER: 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE CASE LAW RELIED ON. CONS IDERING THE ENTIRE FACTS OF THE ASSESSEE'S CASE, THE SUBMISSIONS OF THE ASSESSEE CA NNOT BE IGNORED, THE SALE CONSIDERATION OF THESE TWO PLOTS SOLD ON THE SAME D AY THOUGH BE SEPARATED AGREEMENTS, IS MORE THAN THE STAMP DUTY VALUATION B Y RS.3,00,00,000/-. EVEN ASSUMING FOR A MOVEMENT THAT THE SALE CONSIDERATION IN RESPECT OF PLOT IN SURVEY NO. 22 AND 42 IS LESS THAN THE STAMP VALUATION IT IS RS.33,48,284/- WHICH IS LESS THAN 10% OF THE STAMP DUTY VALUATION OF THE SAID PLOT . THEREFORE, IN VIEW OF THE RATIO OF THE DECISIONS RE1IED ON BY THE ASSESSEE, THE ASSESSEE SHOULD SUCCEEDED IN ITS APPEAL. THE JAIPUR BENCH IN THE CA SE OF SMT. SITA BAI KETAN (SUPRA) HELD AS UNDER:- 4.2 'WE, HAVE HEARD RIVAL CONTENTIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE HON'BLE COORD INATE BENCH IN ITA NO.1543/PN/2007 IN THE CASE OF RAHUL CONSTRUCTIONS VS. DCIT (SUPRA) HAS HELD AS UNDER:- WE FIND THAT THE PUNE BENCH OF THE TRIBUNAL I THE CASE OF ASSTT. CIT VS. VS. HARPREET HOTELS (P) LTD. VIDE IT A NO.1156- 1160/PN/2007 AND RELIED ON BY THE LEARNED COUNSEL FOR THE ASSESSEE HAD DISMISSED THE APPEAL FILED BY THE REVE NUE WHERE THE CIT(A) HAD DELETED THE UNEXPLAINED INVESTMENT IN HOUSE CONSTRUCTION ON THE GROUND THAT THE DIFFERENCE BETWEEN THE FIGURE SHOWN BY THE ASSESSEE AND THE FIGURE OF THE DVO IS HARDLY 10 PER CENT. SIMILARLY , WE FIND THAT THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ITO V S. KAADDU JAYGHOSH APPASAHEBH, THE LEARNED COUNSEL FOR THE AS SESSEE FOLLOWING THE DECISION OF THE J&K HIGH COURT IN THE CASE OF HONEST GROUP OF HOTELS (P) LTD. VS. CIT (2002) 177 CTR (J & K) 232 HAD HELD THAT WHEN THE MARGIN BETWEEN THE VALUE AS GIVEN BY THE ASSESSEE AND THE DEPARTMENTAL VALUER W AS LESS THAN 10 PER CENT, THE DIFFERENCE IS LIABLE TO BE IG NORED AND THE ADDITION MADE BY THE AO CANNOT BE SUSTAINED. ITA NO.987/M/2014 MR. NIRANJAN SHRICHAND MATTA 5 SINCE IN THE INSTANT CASE SUCH DIFFERENCE IS LESS T HAN 10 PER CENT AND CONSIDERING THE FACT THAT VALUATION IS ALW AYS A MATTER OF ESTIMATION WHERE SOME DEGREE OF DIFFERENCE IS BO UND TO OCCUR, 'WE ARE OF THE CONSIDERED OPINION THAT THE A O IN THE INSTANT CASE IS NOT JUSTIFIED IN SUBSTITUTING THE S ALE CONSIDERATION AT RS.20,55,000/- AS AGAINST THE ACTU AL SALE CONSIDERATION OF RS.149,00,000 DISCLOSED BY THE ASS ESSEE. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND DI RECT THE AO TO TAKE RS.19,00,000/- ONLY AS THE SALE CONSIDERATI ON OF THE PROPERTY. THE GROUNDS RAISED BY THE ASSESSEE ARE AC CORDINGLY ALLOWED. IN THE INSTANT CASE, THE DIFFERENCE BETWEEN THE VAL UATION ADOPTED BY THE STAMP VALUATION AUTHORITY AND DECLARED BY THE A SSESSEE IS LESS THAN 10%. THEREFORE, RESPECTFULLY FOLLOWING THE DE CISION OF THE HONBLE COORDINATE BENCH, WE HEREBY DIRECT THE AO T O ADOPT THE VALUE AS DECLARED BY THE ASSESSEE. THIS GROUND OF THE ASSESSEE IS ALLOWED. 7. SINCE THE FACTS OF THE PRESENT CASE ARE MATERIAL LY SAME AS THAT OF THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL AS STATED HEREINABOVE, WE ARE , THEREFORE, INCLINED TO SET ASIDE THE ORDER OF LD. CIT(A) ON THIS ISSUE AND DIR ECT THE AO TO TAKE THE SALE CONSIDERATION AT RS.43,33,300/-. THE S UB GROUND NO.1.1 IS ALLOWED. 8. THE ISSUE RAISED IN GROUND NO.1.2 IS AGAINST THE ORDER OF LD. CIT(A) CONFIRMING THE NON INDEXATION ON THE COST OF IMPROVEMENT OF RS.95,000/-. THE FACTS IN BRIEF ARE THAT THE ASSESSEE HAS CLAIMED THE COST OF IMPROVEMENT AT RS.9 5,000/- WHICH WAS INDEXED BY TAKING THE CURRENT INDEX AT RS .582/- AND BASE INDEX OF RS.100 AND THUS INDEX COST WAS CAL CULATED AT RS.5,52,900/-. HOWEVER, THE AO DURING THE ASSESSME NT PROCEEDINGS WHILE RECALCULATING THE CAPITAL GAIN DE NIED THE BENEFIT OF INDEXATION TO THE ASSESSEE. HOWEVER, THE COST OF ITA NO.987/M/2014 MR. NIRANJAN SHRICHAND MATTA 6 IMPROVEMENT OF RS.95,000/- WAS ALLOWED. THE AO CIT ED THE VARIOUS REASONS SUCH AS NON FURNISHING OF BILLS AND VOUCHERS BY THE ASSESSEE. 9. THE LD. CIT(A) CONFIRMED THE ACTION OF THE AO. 10. HAVING HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL ON RECORD, WE FIND THAT THE AO HAS ADMITTED THE FACT OF HAVING INCURRED RS.95,000/- ON COST OF IMPROVEMENT OF THE PR OPERTY WHILE DENYING THE BENEFIT OF INDEXATION TO THE ASS ESSEE. WE FIND MERITS IN THE ARGUMENTS OF THE LD. A.R. THAT ONCE THE FACT OF EXPENSES HAVING BEEN INCURRED IS ACCEPTED BY THE AO THE INDEXATION CAN NOT BE DENIED. THE LD. A.R. RELIED O N THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL I N THE CASE OF MRS. USHA SRICHAND MATTA IN ITA NO.988/M/2014 FOR A .Y. 2009-10 WHEREIN THE CO-ORDINATE BENCH OF THE TRIBUN AL HAS HELD AS UNDER: 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIAL ON RECORD. THE MODE OF COMPUTATION OF LONG TERM CAPITA L GAINS HAS BEEN PROVIDED U/S. 48 OF THE INCOME TAX ACT 1961. AS PER THE SAID PROVISION INCOME CHARGEABLE UNDER THE HEAD LONG TERM CAPITAL GAIN SHALL BE COMPUTED A FTER DEDUCTING THE FOLLOWING AMOUNTS I) EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN C ONNECTION WITH SUCH TRANSFER II)THE COST OF ACQUISITION OF THE ASSET AND THE COS T OF ANY IMPROVEMENT THERETO. THE SAID PROVISION FURTHER PROVIDES THAT IN CASE OF LON G TERM CAPITAL GAINS ARISING FROM THE TRANSFER OF LONG TERM CAPITAL ASSET IN CASE OF A RESIDENT, COST OF ACQUISITION AND COST OF ANY IMPROVEMENT WOULD MEAN INDEXED COST OF ACQUISITION AND INDEXED COST OF ANY IMPROVEMENT. KEEPING IN VIEW THE AFORESAID S TATUTORY PROVISION IF WE EXAMINE THE FACTS OF THE PRESENT CASE, IT IS NOTICE D THAT THE AO HAS ACCEPTED THE ASSESSEE'S CLAIM OF COST OF IMPROVEMENT OF RS.1,25, 000/-, WHICH IS EVIDENT FROM THE WORKING OF LONG TERM CAPITAL GAINS MADE BY THE AO. THEREFORE, THE AO IN PRINCIPLE HAVING ACCEPTED ASSESSEE'S CLAIM OF COST OF IMPROVE MENT OF RS.1,25,000/- AS A NATURAL CONSEQUENCE INDEXED COST OF IMPROVEMENT HAS TO BE ALLOWED IN TERMS WITH SECTION 48 OF THE ACT. A DEDUCTION ALLOWED UNDER THE PROVISIO NS OF A STATUTE CANNOT BE TAKEN AWAY/DISALLOWED BY MUTUAL AGREEMENT BETWEE N THE ASSESSEE AND THE ITA NO.987/M/2014 MR. NIRANJAN SHRICHAND MATTA 7 DEPARTMENT, IF AT ALL THERE IS ANY. MOREOVER, THE A O BEING A CREATURE OF THE STATUTE HAS TO ACT WITHIN THE FOUR CORNERS OF THE STATUTORY PROVISIONS. SINCE AS PER MODE OF COMPUTATION PROVIDED U/S. 48 OF THE ACT COST OF ANY IMPROVEMENT WOULD MEAN ITA NO.988/MUM/2014 INDEXED COST OF ANY IMPROVEMENT, WH ICH IS TO BE REDUCED FROM THE FULL CONSIDERATION, WHILE COMPUTING LONG TERM C APITAL GAINS, IN OUR VIEW, THE AO CANNOT DISALLOW ASSESSEE'S CLAIM OF INDEXED COST OF ANY IMPROVEMENT. ACCORDINGLY, WE DIRECT HIM TO ALLOW ASESSEE'S CLAIM OF INDEXED C OST OF IMPROVEMENT. THIS GROUND IS ALLOWED. 11. THE FACTS OF THE CASE ARE MATERIALLY SAME AS TH AT OF THE DECISION OF THE CO-ORDINATE BENCH AS CITED ABOVE. WE, THEREFORE, SET ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE AO TO ALLOW THE BENEFIT OF INDEXATION ON THE COST O F IMPROVEMENT OF RS.95,000/-. THE GROUND IS ALLOWED . 12. THE ISSUE RAISED IN GROUND NO.1.3 IS AGAINST TH E CONFIRMATION OF DISALLOWANCE BY LD. CIT(A) OF RS.8,5 00/- AS BROKERAGE AND LEGAL FEES INCURRED IN RELATION TO TH E SALE OF FLAT. 13. THE FACTS IN BRIEF ARE THAT THE ASSESSEE CLAIME D RS.43,500/- AS BROKERAGE AND LEGAL FEE PAID IN CONN ECTION WITH THE TRANSFER PROPERTY AND PRODUCED BEFORE THE AO C OPIES OF BANK STATEMENT EVIDENCING THE PAYMENT HOWEVER, COUL D NOT PRODUCE THE BILLS AS THE SAME WERE MISPLACED. THE A O DISALLOWED RS.8,500/- BY OBSERVING THAT THE ONLY TWO PAYMENTS WERE CONSIDERED AS ALLOWABLE AND REMAIN ING TO BE DISALLOWED. THE LD. CIT(A) AFFIRMED THE ORDER OF AO ON THIS ISSUE. 14. CONSIDERING THE RELEVANT RECORDS AS PLACED BEFO RE US, WE FIND THAT THE ASSESSEE HAS PRODUCED BEFORE THE AO T HE RECORDS EVIDENCING THE PAYMENT OF BROKERAGE AND LEGAL EXPEN SES WHICH WERE PAID IN CONNECTION WITH THE TRANSFERRED PROPERTY. ITA NO.987/M/2014 MR. NIRANJAN SHRICHAND MATTA 8 HOWEVER, THE AO HAS PARTLY ALLOWED THE PAYMENT OF TH E ASSESSEE BY REASONING THAT ONLY TWO PAYMENTS OF RS.2 0,000/- & RS.15,000/- WERE ALLOWABLE AND THE REMAINING WAS DISALLOWED WITHOUT ASSIGNING ANY SPECIFIC REASONS. THE LD. CIT(A) ALSO UPHELD THE ORDER OF THE AO ON THIS ISSU E SUMMARILY WITHOUT ANY REASON REASONING. NOW TAKING INTO ACCO UNT THE FACTS THAT WHEN THE ASSESSEE HAS MADE PAYMENTS FROM THE BANKING CHANNEL, THE AO CAN NOT DISALLOW THE SAME AT HIS WHIMS AND FANCIES. THE AO HAS TO POINT OUT SPECIFIC DEFECTS/DEFICIENCIES IN THE EVIDENCES PRODUCED BEFO RE HIM AND ONLY THEN THE DISALLOWANCES CAN BE MADE BUT NOTHING OF THE SORT HAS BEEN DONE IN TH PRESENT CASE. WE, THEREFORE , SET ASIDE THE ORDER OF LD. CIT(A) ON THIS ISSUE AND DIR ECT THE AO TO ALLOW THE BROKERAGE AND LEGAL FEE OF RS.8,500/-. GRO UND NO.1.3 IS ALLOWED. 15. SUB GROUND 1.4 RAISED BY THE ASSESSEE IS CONSEQU ENTIAL AND NEEDS NO ADJUDICATION SPECIFICALLY. 16. THE ISSUE RAISED IN GROUND NO.2 IS AGAINST THE CONFIRMATION OF ADDITION OF RS.2,66,800/- BY LD. CIT(A ) AS MADE BY THE AO UNDER THE HEAD INCOME FROM OTHER SO URCES TOWARDS THE MONEY RECEIVED BY THE ASSESSEE AS COMPE NSATION FOR TAKING TEMPORARY ALTERNATIVE ACCOMMODATION FOR 18 MONTHS AND THEREBY LD. CIT(A) NOT APPRECIATING THE F ACT THAT THE COMPENSATION RECEIVED WAS NOT OF COMMERCIAL NAT URE BUT WAS A COMPENSATION FOR DISLOCATION AND HARDSHIP CAU SED TO THE ASSESSEE AND IS A CAPITAL RECEIPT. ITA NO.987/M/2014 MR. NIRANJAN SHRICHAND MATTA 9 17. THE FACTS IN BRIEF ARE THAT THE AO OBSERVED FRO M THE DEVELOPMENT AGREEMENT MADE BETWEEN THE DEVELOPER AN D THE ASSESSEE THAT THE DEVELOPER HAS PAID SOME AMOUNT TO THE ASSESSEE AS COMPENSATION FOR ALTERNATIVE ACCOMMODAT ION AS PER CLAUSE 5 OF THE SAID AGREEMENT TO THE TUNE OF RS.2,66,800/- AND ACCORDINGLY A SHOW CAUSE NOTICE WA S ISSUED TO THE ASSESSEE AS TO WHY THE SAME SHOULD NOT BE A DDED AS INCOME FROM OTHER SOURCES WHICH WAS REPLIED BY ASSE SSEE VIDE LETTER DATED 15.12.2011 SUBMITTING THEREIN THAT PAYM ENT RECEIVED OF RS.2,66,800/- WAS FOR ALTERNATIVE ACCOMM ODATION WHICH WAS PAID AS RENT FOR THE FLAT TAKEN ON LEASE DURING THE PERIOD OF CONSTRUCTION. HOWEVER, THE REPLY OF THE ASSESSEE DID NOT FIND FAVOUR WITH THE AO AND HE ADDED THE SAME A S THE INCOME FROM THE OTHER SOURCES. 18. THE LD. CIT(A) UPHELD THE SAME IN THE APPELLATE PROCEEDINGS. 19. AFTER HEARING BOTH THE PARTIES AND PERUSING THE FACTS OF THE CASE CAREFULLY, WE FIND THAT THE ASSESSEE HAS R ECEIVED RS.2,66,800/- AS COMPENSATION FOR THE DISPLACEMENT/ HARASSMENT DURING THE PERIOD OF CONSTRUCTION AND FO R TAKING ALTERNATIVE ACCOMMODATION ON RENT FOR A PERIOD OF 1 8 MONTHS. WE FIND THAT THE ASSESSEE HAS PAID THE SAME BY WAY OF RENT FOR THE PREMISES WHICH WAS IN FACT TAKEN ON RENT. UNDER THESE FACTS AND CIRCUMSTANCES, WE ARE NOT IN AGREEMENT WI TH THE CONCLUSION DRAWN BY THE LD. CIT(A) THAT THE INCOME IS ASSESSABLE AS INCOME FROM OTHER SOURCES. THE CASE OF THE ASSESSEE IS FURTHER REINFORCED BY THE DECISION OF C O-ORDINATE ITA NO.987/M/2014 MR. NIRANJAN SHRICHAND MATTA 10 BENCH OF THE TRIBUNAL IN THE CASE OF (2012) 21 TAXM AN.COM 316 (MUM.) WHEREIN THE CO-ORDINATE BENCH OF THE TRI BUNAL HAS HELD THAT DISPLACEMENT COMPENSATION OR COMPENSATION RECEIVED FOR ALTERNATIVE ACCOMMODATION IS NOT RELAT ED TO ANY CAPITAL ASSET BUT IS RECEIVED BY ASSESSEE FOR TAKIN G ALTERNATIVE ACCOMMODATION TO FACILITATE THE CONSTRUCTION OF THE FLAT. THE CO-ORDINATE BENCH OF THE TRIBUNAL HAS FURTHER HELD THAT THE ACTUAL PAYMENT BEING LOWER THAN THE AMOUNT RECEIVED AS COMPENSATION FOR TAKING ALTERNATIVE ACCOMMODATION IS NET INCOME TO THE ASSESSEE WHICH HAS TO BE TAXED AS INC OME FROM OTHER SOURCES. ON THE SAME ANALOGY, WE SET ASIDE T HE ORDER OF LD. CIT(A) AND DIRECT THE AO TO TREAT THE SAME A S COMPENSATION FOR ALTERNATIVE ACCOMMODATION AND ONLY IF ANY NET SAVING IS MADE BY THE ASSESSEE I.E. IF THE RENT PAID IS LESS THAN THE AMOUNT OF COMPENSATION ONLY THE DIFFERENCE PART CAN BE ASSESSED AS INCOME FROM OTHER SOURCES AND NOT TH E ENTIRE. THE AO IS DIRECTED ACCORDINGLY BY SETTING ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE. GROUND IS ALLOWED ACCORDINGLY . 20. THE THIRD ISSUE RAISED IS AGAINST THE CONFIRMAT ION OF DISALLOWANCE UNDER SECTION 80C TO THE EXTENT OF RS. 17,071/-. 21. THE FACTS IN BRIEF ARE THAT THE ASSESSEE HAS CL AIMED DEDUCTION U/S 80C OF RS. 1,03,481/- WHICH WAS REDUCED BY THE AO TO RS. 86,410/- IN THE ASSESSMENT ORDER WITHOUT D OING ANY DISCUSSION ON THE SAID ISSUE OR RAISING ANY QUERY O N THE ASSESSEE. THE ASSESSEE DID NOT RAISE THE GROUND BEF ORE THE LD CIT(A). AFTER PERUSING THE RECORDS AS PLACED BEFORE US AND AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE IS SUE IS ITA NO.987/M/2014 MR. NIRANJAN SHRICHAND MATTA 11 EMANATING FROM ASSESSMENT RECORDS AND THEREFORE THE ASSESSEE IS WITHIN HIS RIGHTS TO RAISE THE GROUND. HOWEVER THE ISSUE IS REQUIRED TO BE EXAMINED IN THE LIGHTS OF P AYMENTS RECEIPTS AND WE THEREFORE DEEM IT FIT TO RESTORE TH IS ISSUE TO THE FILE OF THE AO TO EXAMINE THE ISSUE AND DECIDE THE SAME AS PER LAW AFTER AFFORDING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. NEEDLESS TO SAY THAT IF THE PAYMENT IS MADE BY THE ASSESSEE AS PER THE PROVISIONS OF THE ACT THE S AME HAS TO BE ALLOWED. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 22. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.06.2018. SD/- SD/- (PAWAN SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 22.06.2018. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.