COMMISSIONER OF INCOME TAX V vs. M/S REALIEST BUILDERS & SERVIC

ITA - 705 / 2006HC Delhi09 May 20061 pages

For Petitioner: MR.SANJEEV SABHARWAL

AI SummaryPartly Allowed

What did the High Court hold?

The High Court of Delhi admitted the appeal filed by the Commissioner of Income Tax. A substantial question of law was formulated to determine whether the ITAT was legally correct in its holding. The ITAT had previously ruled that income accrues to the assessee only upon the registration of the sale deed in favour of a purchaser. This was contrasted with the execution of a tripartite agreement and the receipt of the full consideration amount pursuant to such an agreement. The High Court did not decide the substantial question of law in this order; it only admitted the appeal for further hearing. The operative direction was to list the appeal for hearing after the parties file their paper books within three months.

What were the facts?

The Commissioner of Income Tax (Appellant) has filed an appeal before the High Court of Delhi against an order passed by the Income Tax Appellate Tribunal (ITAT). The appeal concerns the assessment year(s) not specified in the provided text. The core dispute revolves around when income accrues to the respondent-assessee, M/s Realest Builders and Servic. The ITAT held that income accrues only upon registration of the sale deed, not on the execution of a tripartite agreement and receipt of full consideration. The High Court admitted the appeal and formulated a substantial question of law.

What were the issues?

1. Whether the ITAT was legally correct in holding that income would accrue to the respondent-assessee only on registration of the sale deed in favour of a purchaser and not on the execution of the tripartite agreement and receipt of full consideration amount pursuant thereto? (Question of law, concerning the timing of income accrual under the Income Tax Act). Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. However, the ITAT's decision, which is under challenge, implies the assessee argued that income accrues upon execution of the tripartite agreement and receipt of full consideration. Revenue's Contention: The revenue, through the Commissioner of Income Tax, is challenging the ITAT's finding, implying they argued that income should accrue upon execution of the tripartite agreement and receipt of consideration, or that the ITAT erred in law.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF DELHI AT NEW DELHI . . . . ITA No.705/2006 . COMMISSIONER OF INCOME TAX V ..... Appellant Through: Mr.Sanjeev Sabharwal, Adv. . versus . M/S REALIEST BUILDERS and SERVIC ..... Respondent Through: None. . CORAM: HON'BLE MR. JUSTICE T.S.THAKUR HON'BLE MR. JUSTICE SHIV NARAYAN DHINGRA . O R D E R 09.05.2006 CM No.6582/2006 Heard. Allowed subject to just exceptions. ITA 705/2006 Admit. The following substantial question of law is formulated for determination: ?Whether the ITAT was legally correct in holding that income would accrue to the respondent-assessee only on registration of the sale deed in favour of a purchaser and not on the execution of the tripartite agreement and receipt of full consideration amount pursuant thereto.? Paper books to be filed within three months in accordance with the High Court Rules. . Post for hearing at its turn. . . T.S.THAKUR, J . . . SHIV NARAYAN DHINGRA, J MAY 09, 2006 ga

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