MUMBAI: Compensation received by a cooperative housing society flat owner from a redeveloper cannot be taxed in his hands, according to a recent order of the Income tax Appellate Tribunal's (ITAT) Mumbai bench.
It noted that this compensation was towards the hard ship which the flat owner would face owing to the redevelopment. It held that such compensation should be in the nature of a "capital receipt", which "is outside the scope of income that can be chargeable to tax". In other words, such compensation cannot be subject to income tax.