IN INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER I.T.A. No.5817/M/2011 (Assessment Year:2008-2009) M/s. Bonafide Export ers, Income Tax Officer, 13(2)(1), 52, Patwa Chambers, Mumbai. Vs. L.L.Marg, Clive Road, Dana Bunder, Mumbai 400009. PAN : AAAFB1752C (Appellant) .. (Respondent) Appellant by : Shri Haresh P. Shah Respondent by : Miss Anupama Singh, DR Date of Hearing : 08.09 .2016 Date of Pronouncement :23.09.2016 ORDER PER D. KARUNAKARA RAO, AM: This appeal filed by assessee on 17.8.2011 is against order of CIT (A)-24, Mumbai dated 28.6.2011 for assessment year 2008-2009. In this appeal, assessee raised five grounds in toto. 2. only issue involved in grounds raised by assessee relates to correct head of income for taxing compensation received by assessee in view of cancellation of flat at Borivali. There is purchase agreement, cancellation agreement placed in paper book. Narrating facts, Ld Counsel for assessee submitted that assessee paid sum of Rs. 12.50 lakhs in year 1998 and booked flat at Borivali. In year 2007, assessee received refund of entire amount of Rs. 12.50 lakhs along with compensation of Rs. 9,43,000/-. Assessee offered said amount as capital gains in return of income furnished by assessee for AY 2008-2009. During assessment proceedings, AO held that said amount of Rs. 9.43 lakhs constitutes revenue receipt for reason that said amount is in nature of interest accrued over years on initial payment of Rs. 12.5 lakhs. For this proposition, AO relied on clause-14 of purchase agreement. Accordingly, he treated same as revenue receipt and taxed same under head income from other sources . Aggrieved, assessee carried matter in appeal before first appellate authority. 2 3. During proceedings before first appellate authority, after considering submissions of assessee, CIT (A) confirmed decision of AO. Again aggrieved with said decision of CIT (A), assessee is in further appeal before Tribunal. 4. During proceedings before Tribunal, Ld Counsel for assessee submitted that issue involved in present case is covered in favour of assessee by judgment of Hon ble Bombay High Court in case of CIT vs. Vijay Flexible Containers (186 ITR 693) (Bom.). 5. On other hand, Ld DR for Revenue relied on orders of Revenue Authorities. 6. We have heard both parties and perused orders of Revenue Authorities as well as cited judgment of Hon ble jurisdictional High Court in case of Vijay Flexible Containers (supra). On perusal of said judgment, we find, receipts for giving up right to obtain conveyance of immovable property relates to transfer of capital assets and said amount received in terms of consent agreement is assessable as capital gains . Relevant lines from held portion of said judgement are extracted as under:- Held, that agreement to purchase property, assessee had acquired right to have immovable property conveyed to him. He was, under law, entitled to exercise that right not only against his vendors but also against transferee with notice or gratuitous transferee. He could assign that right. What he acquired under said agreement for sale was, therefore, property within meaning of Income Tax Act, 1991, and, consequently capital asset...... 7. Considering above settled position of issue, we are of opinion that assessee is entitled for relief. Accordingly, grounds raised by assessee should be allowed. We order accordingly. 8. In result, appeal filed by assessee is allowed. Order pronounced in open court on 23rd September, 2016. Sd/- Sd/- (RAVISH SOOD) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; 23.9.2016 . OKK , Sr. PS 3 Copy of Order forwarded to : 1.The Appellant 2. Respondent. 3. ( CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// BY ORDER, (Dy./Asstt. Registrar) , ITAT, Mumbai M/s. Bonafide Exporters v. Income-tax Officer-13(2)(1), Mumbai