The Income Tax Appellate Tribunal at Mumbai, in the case of Kushal
K Bangia, Mumbai v. Assessee (ITA/No. 630/Mum/2006) (the entire case can
be found here.) ruled that the cash compensation received by a
member of the housing society under a redevelopment scheme from a developer should
be treated as a “capital receipt” and, therefore, would not be taxable as
“revenue receipt” in the hands of the member. As a result, the compensation
would reduce the cost of acquisition of the new flat at the time of computing
the capital gains in respect of the said new flat. The brief facts
