July 2025
S. 54F – Capital gain arising out of surrender of tenancy rights is eligible for exemption under section 54F if the developer-builder has allotted a residential flat without any consideration against such surrender by executing Permanent Alternate Accommodation Agreement. S. 56 – Once an income from a source falls within a specific head, the fact that it may indirectly be covered by another head will not make the income taxable under the latter head.
By Jagdish T Punjabi, Chartered Accountant
Devendra Jain & Aditya Bhatt, Advocates
Reading Time 4 mins
25 (2025) 174 taxmann.com 1015 (Mum Trib)
Vasant Nagorao Barabde vs. DCIT
ITA No.: 5372 (Mum) of 2024
A.Y.: 2018-19 Dated: 22.05.2025
S. 54F – Capital gain arising out of surrender of tenancy rights is eligible for exemption under section 54F if the developer-builder has allotted a residential flat without any consideration against such surrender by executing Permanent Alternate Accommodation Agreement.
S. 56 – Once an income from a source falls within a specific head, the fact that it may indirectly be covered by another head will not make the income taxable under the latter head.
FACTS
The assessee and his daughter entered into agreement for Permanent Alternate Accommodation (PAA) dated 21.9.2017 with the developer whereby the tenancy rights in respect of residential premises in building “SS” in Mumbai were surrendered. The developer agreed to provide and allot on ownership basis, without any consideration, one flat in the new building proposed to be constructed on the said property. The stamp value of the said property was ₹2,88,85,600. The assessee filed his return of income on 15.08.2018 reporting total income at ₹61,34,820.
Case of the assessee was selected for limited scrutiny for the reason that purchase value of property was less than stamp value. Since no explanation came from the assessee, the AO completed the as
