Smt. Urmila Dhelia v/s Income Tax Officer

Parties Involved

Facts Summary

The assessee, Smt. Urmila Dhelia, a member of the MIG Co-operative Housing Society (Bandra East), Group IV Ltd, entered into a tripartite development agreement dated 17.09.2010 with M/s. Keystone Realtors Pvt. Ltd. and Rustomjee Construction Pvt. Ltd. for the redevelopment of the property. Each member, including the assessee, was entitled to receive a new flat along with an interest in the additional FSI allotted by MHADA, and certain monetary compensation from the Developers. The assessee received Rs. 6,20,500/- in the impugned AY 2011-12 as part of the total compensation of Rs. 62,05,000/-. The assessee treated this compensation as a capital receipt, not includible in income. However, the assessment was reopened by a notice u/s 148 of the Act, and the AO treated the hardship compensation as Income from other sources. Aggrieved, the assessee filed an appeal before the ld.CIT(A), which was dismissed. The present appeal is against that order.…

Legal Issues

• 1. Whether the Ld. CIT(A) erred in confirming the action taken by the AO in re-opening the assessment u/s.147 of the Income Tax Act, 1961.
• 2. Whether the Ld. CIT(A) erred in confirming the addition of Rs.62,05,000/- made by the AO to the income of the Appellant under the head “Income from other sources”.
• 3. Whether the Ld. CIT(A) erred in holding that levy of interest u/s.234A and 234B of the Income Tax Act, 1961 is mandatory.
• 4. Whether the Ld. CIT(A) erred in holding that the ground raised disputing initiation of penalty proceedings u/s.271(1)(c) is premature.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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