Tax on hardship compensation as rent every month in redevelopment

Hardship rent received by members of a society from a developer during re-development is generally considered taxable as income under the Income Tax Act.

Regarding the second part of your question, if the amount of rent reeived is not spent on housing rent, the taxability might not change solely based on the usage. The tax treatment typically depends on the nature of the receipt (whether it is a capital receipt or revenue receipt) and the tax laws applicable. Hardship rent is usually seen as a revenue receipt and thus taxable. 

Then what about Bombay High Court decision in Ajay Parasmal Kothari stating it is capital receipt not taxable

Kindly elaborate your ans with case law