DY. COMM. OF INCOME-TAX, CIRLCE-1,, NASHIK vs. M/S. SIDHIVINAYAK ASSOCIATES,, NASHIK

आदेश / ORDER

PER VIKAS AWASTHY, JM

This appeal by the Revenue and cross objection by the assessee are

directed against the order of Commissioner of Income Tax (Appeals)-I, Nashik

dated 29.08.2011 for the assessment year 2008-09.

is a land developer. The assessee filed original return of income for the

impugned assessment year on 30.09.2008 declaring total income of

Rs.2,26,96,270/-. Thereafter, assessee filed revised return of income on

02.06.2009 declaring income at Rs.5,96,08,010/-. The case of the assessee

was selected for scrutiny and accordingly, mandatory notice u/s.143(2) of the

Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) was issued to the

assessee on 23.04.2010. In the course of scrutiny assessment proceedings,

the Assessing Officer found that the assessee had purchased following lands:

Sr. Description of the land Area No. 1. Gat No.85, Village : Chincholi 21 H 77 R

Total 29 H 53 R (Approx. 74 Acres)

The assessee entered into Memorandum of Understanding (MOU) on

08.06.2007 jointly with five persons namely, 1) Mr. Pravin Vasantrao

3 ITA No.1350 /PUN/2011 CO. No. 100/PUN/2011 A.Y.2008-09

Jaykrushniya 2) Mr. Suhas Govindji Dande 3) Mr. Nemichand Nayansukh

Chordiya(HUF) 4) Mr. Vardhman Ramanlal Jain and 5) Mr. Dilip Ramchandra

Fadol (HUF) (hereinafter referred to as ‘coordinators’) with respect to the

aforesaid land @ Rs.21.50 Lakhs per acre. It was mutually decided between

the assessee and the coordinators that any amount realized over and above

Rs.21.50 Lakhs per acre would be retained by coordinators. On 19.07.2007, a

tri-party MOU between the assessee, coordinators and Juturna Developers

Pvt. Ltd was executed. As per the terms of MOU, Juturna Developers Pvt. Ltd.

agreed to purchase the land comprising in Gat No. 85, Gat No. 86 and Gat

No. 307 free from all encumbrances @ Rs.28.50 Lakhs per acre. Further, in

line with the earlier MOU between the assessee and coordinators, the

consideration to be paid by Juturna Developers Pvt. Ltd. was to be shared

between the assessee and coordinators as under:

respect to land comprising in Gat No. 85 and Gat No. 307 in favour of

Juturna Developers Pvt. Ltd. @ Rs.12 Lakhs per acre. On the same date, the

assessee executed agreement of sale with respect to land comprising in Gat

No. 86 with Juturna Developers Pvt. Ltd. with consideration @Rs.12 Lakhs

per acre. A Supplementary Agreement was also executed between the

assessee and Juturna Developers Pvt. Ltd. on the same date i.e.15.02.2008

for payment of balance consideration i.e. Rs.9.50 Lakhs per acre to be paid

by Juturna Developers Pvt. Ltd. to assessee after removal of encumbrances

and after obtaining clearance with respect to land comprising in Gat No.86.

The land in Gat No. 86 was ‘Nazrana land’ (Tenure Property) and the assessee

4 ITA No.1350 /PUN/2011 CO. No. 100/PUN/2011 A.Y.2008-09

had only rights in the said land. The assessee in its original return of income

offered income from sale of land comprising in Gat No. 85 and Gat No. 307 @

Rs.12 Lakhs per acre. In the revised return of income filed on 02.06.2009,

the assessee offered additional income @ Rs.9.50 Lakhs per acre after netting

off all expenses with respect to Gat No.85 and Gat No.307. In assessment

proceedings, the Assessing Officer made following additions/ disallowances:

Apart from above additions, the Assessing Officer observed that since

symbolic possession of land admeasuring 10 Acres 6R in Gat No.86 has also

been given by assessee to the purchasers, the total consideration @ 21.50

Lakhs per acres i.e. Rs.2,27,90,000/- qua Gat No.86 is also assessable in

assessment year 2008-09. The Assessing Officer computed taxable income of

the assessee after making addition to the income returned ( as per revised

return of income) at Rs.9,84,58,770/-.

(3) r.w.s 115WE(3) of the Act, the assessee filed appeal before the

Commissioner of Income Tax (Appeals). Before the Commissioner of Income

Tax (Appeals), the assessee assailed the findings of Assessing Officer in not

allowing the expenditure incurred by the assessee for settling the claims of

various stake holders. The expenditure was incurred by the assessee for

clearing the title and removal of encroachers. The assessee further raised

5 ITA No.1350 /PUN/2011 CO. No. 100/PUN/2011 A.Y.2008-09

additional ground of appeal for accepting the income as per original return of

income and treating consideration @Rs.9.50 lakhs per acre offered by

assessee in revised return to be assessable in the year of actual receipts in

accordance with Supplementary Agreement dated 15.02.2008. The

Commissioner of Income Tax (Appeals) rejected the grounds raised by the

assessee in appeal in respect of disallowance of various expenditures claimed

for settling the claims of stake holders and for removal of encroachments.

However, the First Appellate Authority allowed the additional ground agitated

by the assessee. Against the findings of Commissioner of Income Tax

(Appeals), the Revenue is in appeal before the Tribunal and the assessee filed

cross objections.

Income Tax (Appeals) by raising following grounds:

“1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A)-I, Nashik was justified in reducing the Revised Return of income by Rs.3,69,11,740/- for AY 2008-09 which was filed by the assessee voluntarily. 2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A)-I, Nashik was justified in deleting the addition of Rs.2,27,90,000/- made on account of income accrued from land at Gat No.86 which was not offered for taxation. 3. Whether on the facts and in the circumstances of the case, the Ld. CIT(A)-I, Nashik was justified in deleting the addition made of Rs.8.60 Lacs on protective basis for the expenses in the case of Shri Suhas G Dande. 4. The appellant prays the order of the Assessing Officer may be restored. 5. The appellant prays to reduce such further evidence to substantiate his case. 6. The appellant prays leave to add, alter, clarify, amend and or withdraw any grounds of appeal as and when the occasion demands.”

Commissioner of Income Tax (Appeals) by raising following objections:

6 ITA No.1350 /PUN/2011 CO. No. 100/PUN/2011 A.Y.2008-09

“1. The learned Commissioner of Income Tax (Appeals) (hereinafter referred to as "CIT(A)") erred in upholding the disallowance of Rs.1,12,00,000/- and Rs.1,56,50,000/-, being amounts paid/payable to the investors, on the ground that they have not accrued. Therefore, it is prayed to allow the deduction of the said amounts paid/payable to the investors.

2.The learned CIT(A) erred in upholding the disallowance of Rs.1,10,00,000/-, being the cost for removal of encroachers, additional price to land owners and service charged to mediators, on the ground they have not accrued. Therefore, it is prayed to allow the deduction of the said expenditures. 3. The learned CIT(A) erred in upholding the disallowance of Rs.10,00,760/-, being the cost for out of court settlement of dispute with land owner, on the ground it was not accrued. Therefore, it is prayed to allow the deduction of the said amount. 4. The respondent craves leave to add/amend/alter/clarify any or all grounds before or at the time of hearing.”

the assessee is an AOP comprising of twelve members. A MOU with respect to

three parcels of agricultural lands comprising in Gat No.85, Gat No.86 and

Gat No.307 was entered into with Juturna Developers Pvt. Ltd. on

19.07.2007. The land comprising in Gat No.86 is a ‘Nazrana land’. The land

comprising in Gat No.85, Gat No.86 and Gat No.307 is a contiguous piece of

land. The land in Gat No. 86 is sandwiched between the land falling in Gat

No.85 and Gat No.307. As per MOU dated 19.07.2007, Juturna Developers

Pvt. Ltd. agreed to pay consideration for purchase of land @ Rs.28.50 Lakhs

per acre. The consideration was to be shared between the assessee @

Rs.21.50 Lakhs per acre and the coordinators @ Rs.7 Lakhs per acre. The

sale deed in respect of Gat No.85 and Gat No.307 was executed by the

assessee in favour of Juturna Developers Pvt. Ltd. on 15.02.2008. The

assessee received consideration @Rs.12 Lakhs per acre in respect of aforesaid

land at the time of execution of sale deed. On 15.02.2008, an agreement of

sale with respect to Gat No.86 was executed in favour of Juturna Developers.

Since the land in Gat No.86 was ‘Nazrana land’, the assessee was under

7 ITA No.1350 /PUN/2011 CO. No. 100/PUN/2011 A.Y.2008-09

obligation to pay entire Nazrana fee to the State Government before the

nature of land could be changed to non agriculture. As per sale agreement

dated 15.02.2008 in respect of Gat No.86, the assessee was to receive

consideration @ Rs.12 Lakhs per acre. The supplementary agreement dated

15.02.2008 was executed for payment of balance Rs.9.50 Lakhs per acre to

be paid to the assessee after removal of all encumbrances, defects in the title

and execution of sale deed in respect of land in Gat No.86. The assessee in

its original return of income for assessment year 2008-09 offered the

consideration received @ Rs.12 Lakhs per acre as ‘Business Income’. The

same was duly accepted by the Department. The assessee further offered

balance Rs.9.50 Lakhs per acre in respect of land comprising in Gat No.85

and Gat No.307 and entire consideration for sale of land in Gat No.86 @

Rs.21.50 Lakhs per acre in assessment year 2010-11.

7.1 The ld AR submitted that a perusal of the MOU with coordinators dated

08.06.2007 at page No. 180 to 201 of the paper book would show that

assessee was under obligation to pay entire outstanding Nazrana fee in

respect of land comprising in Gat No.86 and obtain necessary permission

from the office of Collector. It was further incumbent upon the assessee to

remove defects and encumbrances in the title of the land and also clear the

land of any encroachments. The ld. AR submitted that since the assessee had

received balance consideration of Rs.9.50 Lakhs per acre for Gat No.85 and

Gat No.307 and entire consideration in respect of Gat No.86 @ Rs.21.50

Lakhs per acre in the period relevant to assessment year 2010-11, the same

could not have been brought to tax in assessment year 2008-09. The

additional income had not accrued to the assessee in assessment year 2008-

8 ITA No.1350 /PUN/2011 CO. No. 100/PUN/2011 A.Y.2008-09

revised return erroneously on guidance of DDIT (Investigation) during

investigation & enquiry proceedings.

The ld. AR further submitted that the main dispute in the appeal by the

Revenue is with respect to year of taxability of balance consideration received

by the assessee @ Rs.9.50 Lakhs per acre in accordance with terms of

Supplementary Agreement dated 15.02.2008. In support of his submissions

that income chargeable to tax must accrue or arise in the period relevant to

assessment year in which it is brought to tax, the ld. AR placed reliance on

the following decisions:

1) M/s. P.G. & W. Sawoo Pvt. Ltd. Vs. Assistant Commissioner of Income Tax, Civil Appeal No.4091 of 2016 decided on 19.04.2016. 2) Commissioner of Income Tax Vs. Mrs. Hemal Raju Shete in Income Tax Appeal No.2348 of 2013 decided on 29th March, 2016 by Hon'ble Bombay High Court.

3) Commissioner of Income Tax Vs. Excel Industries Ltd. reported in 358 ITR 295 (SC).

7.2 The ld. AR submitted that in cross objections, the assessee has assailed

the order of Commissioner of Income Tax (Appeals) in not allowing the

expenditure incurred for removing the encumbrances and encroachment from

the said land and payments made to stake holders for settling their claims in

respect of land under consideration.

vehemently defended the assessment order. The ld. DR submitted that in the

original return of income, the assessee had disclosed income from sale of

lands in Gat No.85 and Gat No.307 @Rs.12 Lakhs per acre. However, in the

revised return of income, the assessee suo-moto offered additional income

@Rs.9.50 Lakhs per acre in respect of land comprising in Gat No.85 and Gat

9 ITA No.1350 /PUN/2011 CO. No. 100/PUN/2011 A.Y.2008-09

No.307. The Assessing Officer made assessment on the basis of revised return

voluntarily offered by the assessee. The ld. DR submitted that a perusal of the

sale deeds dated 15.02.2008 would show that the possession of the land has

been handed over by the assessee to Juturna Developers and once possession

has been handed over, the entire sale consideration is to be taxed in the year

of sale of such land. In support of his submissions, the ld. DR placed

reliance on the decision of Hon'ble Bombay High Court in the case of

Chaturbhuj Dwarkadas Kapadia Vs. Commissioner of Income-Tax reported as

260 ITR 491. The ld. DR submitted that in so far as the land comprising Gat

No.86 is concerned, it is part of same transaction as is evident from MOU

dated 19.07.2007 at page No.202 to 217 of the paper book. The land in Gat

No.86 cannot be treated as separate/independent transaction. The sale deed

in respect of Gat No.86 may have been executed at later point of time but it is

part of composite contract comprising of Gat No.85, Gat No. 86 and Gat No.

No.85, Gat No.86 and Gat No.307 is to be assessed in the assessment year

2008-09.

In respect of cross objections filed by assessee, the ld. DR submitted

that the Commissioner of Income Tax (Appeals) has rightly upheld the

disallowance of various expenditure claimed by the assessee in connection

with lands comprising in Gat No.85, Gat No.86 and Gat No.307.

that the assessee was owner of the land comprising in Gat No.85 and Gat No.

307 whereas, the assessee had rights in respect of land in Gat No.86. The

said land was Nazrana land and the assessee was not having absolute right

in title of the land. The ld. AR pointed that though in the sale deed, it is

10 ITA No.1350 /PUN/2011 CO. No. 100/PUN/2011 A.Y.2008-09

mentioned that there is no encumbrances on the land but there was dispute

in respect of land comprising in Gat No.85. To support his submission the ld.

AR referred to plaint and copy of order in Civil Suit No.4/2008 in the Court of

Civil Judge, Junior Division, Sinnar at page No. 532 to 581 of the paper book.

Thus, there were encumbrances on the title of land which the assessee

removed over the period of time after execution of MOU dated 19.07.2007.

9.1 The ld. AR further submitted that in respect of ‘Nazrana land”

comprising in Gat No.86, the assessee paid Nazrana fee and obtained

clearance from office of District Collector in 2009 and thereafter, the sale

deed in respect of Gat No.86 was executed on 17.07.2009. The same was

offered to tax in the return of income for the assessment year 2010-11. The

ld. AR asserted that sale of three parcels of land were inextricably linked with

each other without clearance and execution of sale deed in respect of Gat No.

86, the land comprising in Gat No.85 & Gat No.307 would have been of no

use to the purchaser. The ld. AR referred to the site map of the land at page

No.414 of the paper book and pointed that the land comprising in Gat No.307

is adjacent to the road. The land in Gat No.86 divides the Gat No.307 and Gat

No.85. The approach to Gat No.85 is through Gat No.86. Therefore, the entire

piece of land admeasuring 74 Acres comprising Gat No. 85, Gat No. 86 and

Gat No.307 is contiguous land. Therefore, the purchaser of the land i.e.

Juturna Developers Pvt. Ltd. withheld part of consideration in respect of Gat

No.85 and Gat No. 307 and only paid Rs.12 Lakhs per acre at the time of

execution of sale deed. The remaining amount of Rs.9.50 Lakhs per acre was

received by the assessee at later date in accordance with terms of

Supplementary Agreement dated 15.02.2008. The ld. AR submitted that

reliance on the decision rendered in the case of Chaturbhuj Dwarkadas

Kapadia Vs. Commissioner of Income-Tax (supra.) by the DR is misplaced. In

11 ITA No.1350 /PUN/2011 CO. No. 100/PUN/2011 A.Y.2008-09

the said case, the land was transferred and physical possession of the land

was also given to the purchaser, whereas in the present case, the assessee

had only handed over symbolic possession of the land and actual physical

possession of the land was with the assessee till the time entire sale

consideration was received by the assessee from the purchaser of the land.

Therefore, the ratio laid down by the Hon'ble High Court in the aforesaid case

cannot be applied in the facts and circumstances of the present case.

and have perused the orders of Authorities below. We have considered the

decisions on which reliance has been placed by both the sides. We have also

examined documents which were referred by the rival sides while making

submissions. The undisputed facts of the case are that the assessee entered

into MOU dated 19.07.2007 with Juturna Developers Pvt Ltd. for sale of land

admeasuring approximately 74 acre comprising in Gat No.85 and Gat No. 86

at Village : Chincholi and Gat No. 307 at Village : Moha, Tal. Sinnar for a

consideration of Rs.28.50 Lakhs per acre. It is also undisputed fact that out

of the above sale consideration, Rs.7 Lakhs per acre was paid by Juturna

Developers Pvt. Ltd. to the coordinators who were party to the aforesaid MOU

dated 19.07.2007. The land comprising in Gat No.85 and Gat No. 307 was

owned by the assessee and with respect to land comprising in Gat No.86, the

assessee was having rights. The land in Gat No. 86 was ‘Nazrana land’

(tenure property) and thus, the assessee was not having absolute rights in

respect of the said land. A perusal of the records shows that the assessee

had entered into MOU with coordinators dated 18.06.2007 in respect of the

aforesaid land. As per the said MOU, it was obligation of the assessee to clear

land from all encumbrances including payment of Nazrana fee in respect of

Gat No. 86 and obtain necessary permission for conversion of land for non

12 ITA No.1350 /PUN/2011 CO. No. 100/PUN/2011 A.Y.2008-09

agricultural purpose. The sale deed in respect of Gat No. 85 and Gat No.307

was executed by the assessee in favour of Juturna Developers Pvt. Ltd. on

15.02.2008. As per the Sale Deed, Juturna Developers Pvt. Ltd. paid

consideration @ Rs.12 Lakhs per acre to the assessee. An Agreement of sale

with respect to Gat No. 86 was executed on same date with Juturna

Developers Pvt. Ltd. A Supplementary Agreement dated 15.02.2008 was

executed for payment of balance consideration i.e. Rs.9.50 Lakhs (Rs.21.50

Lakhs- Rs.12 Lakhs) by Juturna Developers Pvt. Ltd. to the assessee on

removal of encumbrances and after obtaining clearance in respect of ‘Nazrana

land’.

tax consideration received @ Rs. 12 Lakhs per acre in respect of Gat No. 35

and Gat No. 307 as ‘Business Income’. However, the assessee filed revised

return of income on 02.06.2009 and offered additional income @ Rs.9.50

Lakhs per acre qua land in Gat No. 85 and Gat No. 307. In the revised return

of income, the assessee also claimed certain expenditure viz. payments made

for clearing encumbrances, payment made to mediators, payment made for

settling claims out of court to stake holders in respect of land in Gat No. 85

etc. The Assessing Officer disallowed expenditure claimed by the assessee for

settling various claims as mentioned above and assessed total income on the

basis of revised return filed by the assessee.

that the additional income offered by the assessee in the revised return is not

to be assessed in the assessment year 2008-09 as the same had not accrued

to the assessee in assessment year 2008-09. Apart from above, the assessee

assailed disallowance of various claims made by the assessee in the revised

13 ITA No.1350 /PUN/2011 CO. No. 100/PUN/2011 A.Y.2008-09

return of income. The Commissioner of Income Tax (Appeals) accepted

additional grounds raised by the assessee and restricted the income as per

original return of income filed by the assessee on 30.09.2008. In so far as

other expenditures , claimed in revised return, the Commissioner of Income

Tax (Appeals) held that the same should be considered in the assessment

year in which the assessee offers additional income @ Rs.9.50 Lakhs per acre

in respect of Gat No. 85 and Gat No. 307.

for adjudication are:

additional ground of appeal and reduce income returned in the

revised return of income?

per Acre received by the assessee in respect of sale of land

comprising in Gat No. 85 and Gat No. 307 and entire consideration

received in respect of Gat No.86.

ground of appeal by following the decision of Hon'ble Jurisdictional High

Court in the case of Asbestos Cement Ltd. Vs. Commissioner of Income Tax,

reported as 203 ITR 358 and thereafter, adjudicated the issue raised by the

assessee in additional ground for assessing income as per original return of

income instead of revised return of income. The Hon'ble High Court referred

to the decision of Hon'ble Supreme Court of India in the case of Jute

Corporation of India Ltd. Vs. CIT, reported as 187 ITR 688 and held that the

First Appellate Authority has power to consider the additional ground raised

14 ITA No.1350 /PUN/2011 CO. No. 100/PUN/2011 A.Y.2008-09

by the appellant for the first time at the appellate stage. Therefore, we do not

find any error in Commissioner of Income Tax (Appeals) admitting additional

ground raised by assessee/ appellant. Further, it is well settled law that the

income is assessable in the year in which the right to income has accrued.

The CBDT vide Circular No.14 dated 11.04.1955 has emphasized that the

Assessing Officer should not take advantage of an assessee’s ignorance to

collect more tax than what is legitimately due from him. Thus, if any income

has been offered to tax by the assessee which has not accrued, the assessee

should be allowed to rectify the mistake by raising additional ground before

the appellate authority.

income from the sale of land though the same had not accrued to the

assessee in the assessment year under appeal. A perusal of the

Supplementary Agreement dated 15.02.2008 at page No. 172 to 179 of the

paper book shows that the assessee is entitled to receive balance

consideration of Rs.9.50 Lakhs per acre on handing over of absolute

unencumbered vacant possession of land. At the time of execution of sale

deed, the assessee purportedly handed over symbolic possession of the land

comprising in Gat No. 85 and Gat No. 307 to the purchaser. Further, on

perusal of the sale deed in respect of Gat No. 85 and Gat No. 307 executed on

15.02.2008 makes it clear that the assessee had received consideration in

respect of aforesaid land @ Rs. 12 Lakhs per acre, as against agreed

consideration of Rs.21.50 Lakhs per acre. Thus, balance consideration

Rs.9.50 Lakhs per acre was to be received by the assessee in accordance with

the supplementary agreement upon clearing all encumbrances and

encroachment from the land. In other words, the additional income could

accrue to the assessee only on compliance of the conditions mentioned in

15 ITA No.1350 /PUN/2011 CO. No. 100/PUN/2011 A.Y.2008-09

MOU. Though the geneses of consideration received by assessee is in MOU

executed on 19.07.2007 but there were conditions attached to it. It is only on

compliance of the conditions that the assessee would have been entitled to

receive the entire sale consideration.

coordinators and Juturna Developers Pvt. Ltd. reveal that there was

composite agreement for sale of land comprising in Gat No. 85, Gat No. 86

and Gat No. 307. Since the land in Gat No.86 is ‘Nazrana land’, the assessee

was under obligation to pay outstanding Nazrana fees and obtaining

clearance from the office of District Collector. The assessee was also required

to obtain necessary permission for conversion of land into non agricultural

purpose. The ld. A.R. has pointed that the assessee could get clearance in

respect of Gat No. 86 in the year 2009 and had also removed all

encumbrances and settled claims of various stake holders in respect of Gat

No. 85. The sale deed in respect of Gat No. 86 was executed on 17.07.2009.

Thus, the assessee could finally comply with the terms and conditions of

MOU dated 19.07.2007 only in the year 2009. In the return of income for

assessment year 2010-11, the assessee has offered consideration received in

respect of Gat No. 86 only. A perusal of the assessment order dated

30.03.2013 for assessment year 2010-11 (at page No.291 of the paper book)

shows that the assessee has not offered balance consideration Rs. 9.50 Lakhs

per acre in the return of income. However, during the assessment

proceedings, the assessee agreed for the addition of balance consideration @

Rs.9.50Lakhs per acre net of the expenditure claimed for removing

encumbrances etc. The Assessing Officer has made the addition of the

amount deleted in assessment year 2008-09. Thus, the dispute raised by the

Revenue qua taxation of additional income in assessment year under appeal

16 ITA No.1350 /PUN/2011 CO. No. 100/PUN/2011 A.Y.2008-09

has been brought to tax in assessment year 2010-11. No income of the

assessee has escaped assessment and there is no loss to the Revenue. After

appreciating all the facts of the case and documents on record, we concur

with the findings of Commissioner of Income Tax (Appeals) in holding that the

additional income offered by the assessee in revised return had not accrued

to the assessee in the assessment year 2008-09. We find no infirmity in the

order of Commissioner of Income Tax (Appeals) in accepting the additional

grounds raised by the assessee in appeal.

Pvt. Ltd. Vs. Assistant Commissioner of Income Tax (supra.) after considering

the judgment rendered in the case of E.D. Sesson & Co. Ltd. Vs.

Commissioner of Income Tax, reported as 26 ITR 27 held that the income to

be chargeable to tax must accrue or arise at any point of time during the

previous year.

Similar view has been taken in the case of Commissioner of Income Tax

Vs. Hemal Raju Shete (supra.). The Hon'ble Jurisdictional High Court held:

“9. The contention of the Revenue that the impugned order is seeking to tax the amount on receipt basis by not having brought it to tax in the subject assessment year is not correct. This for the reason, that the amounts to be received as deferred consideration under the agreement could not be subjected to tax in the assessment year 2006-07 as the same has not accrued during the year. As pointed out above, accrual would be a right to receive the amount and the respondent-assessee along with its co-owners have not under the agreement dated 25th January, 2006 obtained a right to receive Rs.20 Crores or any specified part thereof in the subject assessment year.”

Chaturbhuj Dwarkadas Kapadia Vs. Commissioner of Tax (supra.) is

concerned, there is no dispute about the ratio laid down in the said case.

However, in our considered opinion the same would not apply to the facts of

17 ITA No.1350 /PUN/2011 CO. No. 100/PUN/2011 A.Y.2008-09

the instant case. In the said case, Development Agreement was executed,

substantial consideration was received and possession of land was handed

over to the developer. Permissions from various authorities were taken and

commencement certificate was also obtained. In the present case, only part

performance of the terms and conditions as stated in MOU dated 19.07.2007

were carried out. The assessee was yet to clear encumbrances and

encroachments from the land and the claims of stake holders were not

settled. The assessee only gave symbolic possession of the land. The assessee

received balance consideration after complying with the terms & conditions; it

was under obligation to perform. Thus, the income accrued to the assessee on

completing his part of obligation.

No. 1 raised in appeal by the Revenue is dismissed.

addition of Rs. 2,27,90,000/- made on account of income accrued on sale of

land in Gat No. 86. It is an admitted position that the sale deed in respect of

land comprising in Gat No. 86 was executed on 17.07.2009 after obtaining

“VATAN” order on payment of Nazrana from the office of Collector. The

assessee had received sale consideration in respect of said land in the period

relevant to the assessment year 2010-11. Thus, there was no occasion for the

assessee to offer income from sale of land comprising in Gat No. 86 in the

assessment year under appeal. We are in agreement with the Commissioner

of Income Tax (Appeals) in deleting the addition. Hence, ground No. 2 raised

in appeal by the Revenue is dismissed being devoid of any merit.

18 ITA No.1350 /PUN/2011 CO. No. 100/PUN/2011 A.Y.2008-09

addition of Rs. 8.60 Lakhs on account of payment made to Shri Suhas G

Dande. The Commissioner of Income Tax (Appeals) deleted the addition on

the ground that Shri Suhas G Dande has offered the sum of Rs. 8.60 Lakhs

in his return of income for the assessment year 2010-11. Since the amount

has been offered to tax in the return of income by Shri Suhas G Dande,

adding the same amount in the hands of assessee would amount to double

taxation to the same amount, especially when addition was made in the

hands of assessee on protective basis. The Commissioner of Income Tax

(Appeals) has rightly deleted the addition in the hands of assessee. We do not

find any merit in the ground No. 3 raised in appeal by the Revenue and

accordingly, the same is dismissed.

adjudication.

various expenditure by the Commissioner of Income Tax (Appeals). We find

that the Commissioner of Income Tax (Appeals) has directed the Assessing

Officer to allow the expenditure claimed by the assessee in the year additional

income is offered by the assessee on account of balance consideration qua

Gat No. 85 and Gat No.307. A perusal of the assessment order for assessment

year 2010-11 shows that the income arising from balance consideration in

respect of Gat No.85 and Gat No.307 has been assessed to tax in assessment

year 2010-11 and the Assessing Officer has allowed the expenditure as

claimed in accordance with the direction of Commissioner of

19 ITA No.1350 /PUN/2011 CO. No. 100/PUN/2011 A.Y.2008-09

Income Tax (Appeals). The assessee had claimed expenditure in revised return of income against the additional income. The assessee’s claim of expenditure has been deferred to the year of assessee offering additional income by the Commissioner of Income Tax (Appeals) with a direction to allow the same against additional income. We concur with the findings of Commissioner of Income Tax (Appeals). Hence, the cross objections of the assessee claiming expenditure in the assessment year under appeal are dismissed.

Sd/- Sd/- (डी. क�णाकरा राव/D. KARUNAKARA RAO) (�वकास अव�थी /VIKAS AWASTHY) लेखा सद�य/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER

पुणे / Pune; �दनांक / Dated : 18th June, 2018 SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :

अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT (Appeal)-1, Nashik. 4. The CIT-1, Nashik. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “ए” ब�च, 5. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 6.

// True Copy // आदेशानुसार / BY ORDER,

�नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.