Compensation received from builder

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This query is : Resolved

saurabh (Querist)

14 October 2019 Dear Sir,

One of our client filed consumer court against builder for not handing over the flat possession on time. The case was won by client and order was issued by court to pay the amount paid by client along with compensation ..

It was mentioned in order of court that amount to be paid along with compensation without deducting any tds

My query is whether this receipt will constitute as capital receipt as relinquishment of rights , and the same needs to be disclosed under capital gains while filling ITR.

Please help.

CA Dhruva Kalamanji

CA Dhruva Kalamanji (Expert)

14 October 2019 Dear Suarab,

On simple reading it looks like capital receipt, however we need more details to draw the opinion.
You can mail me the order copy so that i can go through the same in details and understand the facts of case better.
For any other assistance please feel free to write to me at sthayin@gmail.

Darshan Jain

Darshan Jain (Expert)

15 October 2019 Whether it is a compensation for delay or whether it is for forgoing right in the flat booked? If it's for delay in handing over the possession, I think it would be treated as capital receipt not subjected to tax.

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