CIT vs. VENAND PROPERTIES PVT LTD

IN THE HIGH COURT OF DELHI AT NEW DELHI . 31.01.2011 . . Present: Mr.Sanjeev Rajpal, Advocate for the appellant. . +ITA No.199/2011 . A finding of fact has been recorded by the Income Tax Appellate Tribunal that transaction in question had not been completed in the year in question and, therefore, no income accrued to the assessee. The Tribunal has also stated that even if this argument is accepted that the transaction had been completed in that year, the assessee only acquired 15% of the interest in land and still no income can be said to have been accrued to the assessee. This conclusion is arrived at on the following basis: ?6.1. In the background of the aforesaid discussion, we find that as per two agreements assessee was to obtain 15% interest in the said land when Rs.70 lacs was paid to Mrs.padmini Paniker. As per the admitted fact only Rs.35 lacs has been paid to Mrs.Padmini Paniker during the current assessment year and Rs.35 lacs in the subsequent assessment year. Hence the transaction cannot be said to have been completed during the current assessment year. Assessing Officer?s contention is that as per the MOU upon Rs.70 lacs payment from M/s.SI Properties and Development Ltd. have accrued to the assessee as per the terms of MOU in the current assessment year. Though the transaction has not been completed during the year, even if this argument is accepted and 15% of interest in land is said to have accrued to the assessee, no income can be said to have accrued to the assessee. It is an admitted fact that assessee was interested . . in dealing/selling the land and deriving the income therefrom. In this context, it is clear that assessee has actually not incurred any payment to secure interest of 15% of the said land. In this respect, the claim, Ld. Counsel of the assessee is correct that assessee has not incurred any cost in acquiring interest the said land. At best it can be said that assessee has obtained an interest in the land, the income from which will accrue only when the assessee receives 15% share from the S.I. Properties upon development and the same is disposed off. Hence we are in agreement with the contention of the assessee, that no income has accrued to the assessee during the current year.? . We find no reason to interfere with this judgment. The appeal is dismissed accordingly. . . A.K. SIKRI, J. . . . . JANUARY 31, 2011 M.L. MEHTA, J. Dev . #46