When Mr Devshichhadva, a tenant from Matunga, Mumbai got two flats in lieu of surrending his tenancy rights in a housing society stated for redevelopment, he got an income tax notice. He challenged this tax notice and won the case in ITAT Mumbai after a long fight. The ITAT Mumbai ruled that a Section 56(2)(x) tax notice cannot be sent to a tenant since he got two flats in exchange for surrendering his tenancy rights in a redevelopment building.
To tell you more about Mr Devshichhadva, he was renting four shops in a housing society in Mumbai. When the society decided to redevelop this building, the builder signed an permement alternative agreement (PAA) with him. Under this agreement, Devshichhadva would have to surrender his tenancy rights, and in exchange the builder will give him two flats in the redeveloped building as permanent alternate accommodation (PAA).
