Siddhivinayak Associates, Nashik V. Dy. Comm. of Income-tax, Nashik

CO 100/PUN/2011

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3905 (ITAT-PUNE)
• Duration Of Justice: 6 year(s) 6 month(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-06-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 21-03-2018
• Assessment Year: 2008-2009
• Appeal Filed On: 15-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E . , , ! , ' # BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AW ASTHY, JM . / ITA NO. 1350/PUN/2011 '% & '& / ASSESSMENT YEAR : 2008-09 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1, NASHIK. .... / APPELLANT (% / V/S. M/S. SIDHIVINAYAK ASSOCIATES, DABIR APARTMENT, GOLE COLONY, NASHIK. PAN: AACAS8945F / RESPONDENT )*# . /CO.NO.100/PUN/2011 '% & '& /ASSESSMENT YEAR: 2008-09 (ARISING OUT OF ITA NO.1350/PUN/2011) M/S. SIDHIVINAYAK ASSOCIATES, DABIR APARTMENT, GOLE COLONY, NASHIK-422002 PAN: AACAS8945F .. / CROSS OBJECTOR (% / V/S. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1, NASHIK. / RESPONDENT REVENUE BY : SHRI RAJEEV KUMAR ASSESSEE BY : SHRI NIKHIL PATHAK 2 ITA NO.1350 /PUN/2011 CO. NO. 100/PUN/2011 A.Y.2008-09 / DATE OF HEARING : 21.03.2018 / DATE OF PRONOUNCEMENT : 18.06.2018 + / ORDER PER VIKAS AWASTHY, JM THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY TH E ASSESSEE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, NASHIK DATED 29.08.2011 FOR THE ASSESSMENT YEAR 2008-09. 2. THE FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE AOP IS A LAND DEVELOPER. THE ASSESSEE FILED ORIGINAL RETURN OF INC OME FOR THE IMPUGNED ASSESSMENT YEAR ON 30.09.2008 DECLARING TOTAL INC OME 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 T HE ASSESSEE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY, MANDATORY NOT ICE U/S.143(2) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE AC T) WAS ISSUED TO THE ASSESSEE ON 23.04.2010. IN THE COURSE OF SCRUTINY ASSESS MENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD PURCHASED FOLLOWING LANDS: SR. NO. DESCRIPTION OF THE LAND AREA 1. GAT NO.85, VILLAGE : CHINCHOL I 21 H 77 R 2. GAT NO. 86, VILLAGE : CHINCHOL I 4 H 24 R 3. GAT NO. 307, VILLAGE : MOH A 3H 52 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 VA SANTRAO 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 RE ALIZED 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 A CRE. FURTHER, IN LINE WITH THE EARLIER MOU BETWEEN THE ASSESSEE AND COOR DINATORS, THE CONSIDERATION TO BE PAID BY JUTURNA DEVELOPERS PVT. LTD. WAS TO BE SHARED BETWEEN THE ASSESSEE AND COORDINATORS AS UNDER: 1. ASSESSEES SHARE RS.21.50 LAKHS PER ACRE. 2. COORDINATORS SHARE RS. 7.00 LAKHS PER ACRE TOTAL RS.28.50 LAKHS PER ACRE 3. THE ASSESSEE EXECUTED REGISTERED SALE DEEDS ON 15.0 2.2008 WITH RESPECT TO LAND COMPRISING IN GAT NO. 85 AND GAT NO. 307 IN FAVOUR OF JUTURNA DEVELOPERS PVT. LTD. @ RS.12 LAKHS PER ACRE. O N THE SAME DATE, THE ASSESSEE EXECUTED AGREEMENT OF SALE WITH RESPECT TO LAN D COMPRISING IN GAT NO. 86 WITH JUTURNA DEVELOPERS PVT. LTD. WITH CONSIDERATIO N @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 PE R ACRE TO BE PAID BY JUTURNA DEVELOPERS PVT. LTD. TO ASSESSEE AFTER REMO VAL OF ENCUMBRANCES AND AFTER OBTAINING CLEARANCE WITH RESPECT TO LAND COMPRIS ING IN GAT NO.86. THE LAND IN GAT NO. 86 WAS NAZRANA LAND (TENURE PROPE RTY) 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 ORIGIN AL RETURN OF INCOME OFFERED INCOME FROM SALE OF LAND COMPRISING IN GAT NO. 85 AN D GAT NO. 307 @ RS.12 LAKHS PER ACRE. IN THE REVISED RETURN OF INCOME FILE D 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/ DISALLOWANC ES: 1. PROVISIONS FOR CONTINGENT LIABILITY RS.1,12,00,000/ - 2. COMPENSATION PAID TO RIGHT HOLDERS RS.1,56,50,000/ - 3. COMPENSATION PAID FOR REMOVAL OF ENCROACHMENT RS.1,10,00,000/ - 4. COMPENSATION PAID FOR SETTLEMENT OF COURT CASES/ CLAIMS TO LAND OWNERS RS.10,00,760/ - 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 CO NSIDERATION @ 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 RETURNE D ( AS PER REVISED RETURN OF INCOME) AT RS.9,84,58,770/-. 4. AGGRIEVED BY THE ASSESSMENT ORDER DATED 31.12.2010 P ASSED U/S.143 (3) R.W.S 115WE(3) OF THE ACT, THE ASSESSEE FILED APPEAL BEFO RE THE COMMISSIONER OF INCOME TAX (APPEALS). BEFORE THE COMMISSIONE R OF INCOME TAX (APPEALS), THE ASSESSEE ASSAILED THE FINDINGS OF ASSESSI NG OFFICER IN NOT ALLOWING THE EXPENDITURE INCURRED BY THE ASSESSEE FOR SET TLING THE CLAIMS OF VARIOUS STAKE HOLDERS. THE EXPENDITURE WAS INCURRED BY T HE ASSESSEE FOR CLEARING THE TITLE AND REMOVAL OF ENCROACHERS. THE ASSESSE E 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 PE R 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 15.02.200 8. THE COMMISSIONER OF INCOME TAX (APPEALS) REJECTED THE GROUND S RAISED BY THE ASSESSEE IN APPEAL IN RESPECT OF DISALLOWANCE OF VARIOUS E XPENDITURES CLAIMED FOR SETTLING THE CLAIMS OF STAKE HOLDERS AND FOR REMOVAL O F ENCROACHMENTS. HOWEVER, THE FIRST APPELLATE AUTHORITY ALLOWED THE ADDITION AL GROUND AGITATED BY THE ASSESSEE. AGAINST THE FINDINGS OF COMMISSIONER OF INC OME TAX (APPEALS), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AND T HE ASSESSEE FILED CROSS OBJECTIONS. 5. THE REVENUE IN APPEAL HAS ASSAILED THE ORDER OF THE CO MMISSIONER OF 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 REVI SED 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 ADDI TION 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 ADDI TION MADE OF RS.8.60 LACS ON PROTECTIVE BASIS FOR THE EXPENSES IN THE CA SE OF SHRI SUHAS G DANDE. 4. THE APPELLANT PRAYS THE ORDER OF THE ASSESSING O FFICER MAY BE RESTORED. 5. THE APPELLANT PRAYS TO REDUCE SUCH FURTHER EVIDE NCE 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 OCCA SION DEMANDS. 6. THE ASSESSEE IN CROSS OBJECTION HAS IMPUGNED THE FIND INGS OF 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) (H EREINAFTER REFERRED TO AS 'CIT(A)') ERRED IN UPHOLDING THE DIS ALLOWANCE OF RS.1,12,00,000/- AND RS.1,56,50,000/-, BEING AMOUNT S PAID/PAYABLE TO THE INVESTORS, ON THE GROUND THAT THEY HAVE NOT ACC RUED. THEREFORE, IT IS PRAYED TO ALLOW THE DEDUCTION OF THE SAID AMOUNTS P AID/PAYABLE TO THE INVESTORS. 2.THE LEARNED CIT(A) ERRED IN UPHOLDING THE DISALLO WANCE OF RS.1,10,00,000/-, BEING THE COST FOR REMOVAL OF ENC ROACHERS, ADDITIONAL PRICE TO LAND OWNERS AND SERVICE CHARGED TO MEDIATO RS, ON THE GROUND THEY HAVE NOT ACCRUED. THEREFORE, IT IS PRAYED TO A LLOW THE DEDUCTION OF THE SAID EXPENDITURES. 3. THE LEARNED CIT(A) ERRED IN UPHOLDING THE DISALL OWANCE OF RS.10,00,760/-, BEING THE COST FOR OUT OF COURT SET TLEMENT OF DISPUTE WITH LAND OWNER, ON THE GROUND IT WAS NOT ACCRUED. THERE FORE, IT IS PRAYED TO ALLOW THE DEDUCTION OF THE SAID AMOUNT. 4. THE RESPONDENT CRAVES LEAVE TO ADD/AMEND/ALTER/C LARIFY ANY OR ALL GROUNDS BEFORE OR AT THE TIME OF HEARING. 7. SHRI NIKHIL PATHAK APPEARING ON BEHALF OF THE ASSESSEE S UBMITTED THAT THE ASSESSEE IS AN AOP COMPRISING OF TWELVE MEMBERS. A MO U 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 PV T. 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 CONT IGUOUS PIECE OF LAND. THE LAND IN GAT NO. 86 IS SANDWICHED BETWEEN THE LAN D FALLING IN GAT NO.85 AND GAT NO.307. AS PER MOU DATED 19.07.2007, JUTU RNA DEVELOPERS PVT. LTD. AGREED TO PAY CONSIDERATION FOR PURCHASE OF LAN D @ RS.28.50 LAKHS PER ACRE. THE CONSIDERATION WAS TO BE SHARED BETWEEN T HE ASSESSEE @ RS.21.50 LAKHS PER ACRE AND THE COORDINATORS @ RS.7 LAK HS PER ACRE. THE SALE DEED IN RESPECT OF GAT NO.85 AND GAT NO.307 WAS EX ECUTED BY THE ASSESSEE IN FAVOUR OF JUTURNA DEVELOPERS PVT. LTD. ON 1 5.02.2008. 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 O F JUTURNA DEVELOPERS. SINCE THE LAND IN GAT NO.86 WAS NAZRANA LAND, THE ASSE SSEE 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 GOVERN MENT BEFORE THE NATURE OF LAND COULD BE CHANGED TO NON AGRICULTURE. AS P ER SALE AGREEMENT DATED 15.02.2008 IN RESPECT OF GAT NO.86, THE ASSESSEE W AS TO RECEIVE CONSIDERATION @ RS.12 LAKHS PER ACRE. THE SUPPLEMENTARY AGREEMENT DATED 15.02.2008 WAS EXECUTED FOR PAYMENT OF BALANCE RS.9.50 LAK HS 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.8 6. THE ASSESSEE IN ITS ORIGINAL RETURN OF INCOME FOR ASSESSMENT YEAR 2008-09 OFFERED THE CONSIDERATION RECEIVED @ RS.12 LAKHS PER ACRE AS BUSIN ESS INCOME. THE SAME WAS DULY ACCEPTED BY THE DEPARTMENT. THE ASSES SEE FURTHER OFFERED BALANCE RS.9.50 LAKHS PER ACRE IN RESPECT OF LAND COMPRIS ING 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 C OORDINATORS DATED 08.06.2007 AT PAGE NO. 180 TO 201 OF THE PAPER BOOK WOU LD SHOW THAT ASSESSEE WAS UNDER OBLIGATION TO PAY ENTIRE OUTSTANDING NAZRANA FEE IN RESPECT OF LAND COMPRISING IN GAT NO.86 AND OBTAIN NECESS ARY 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 N O.86 @ RS.21.50 LAKHS PER ACRE IN THE PERIOD RELEVANT TO ASSESSMENT YE AR 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 ASS ESSMENT YEAR 2008- 09. THE ASSESSEE OFFERED ADDITIONAL INCOME @ RS.9.50 LAKHS P ER ACRE IN 8 ITA NO.1350 /PUN/2011 CO. NO. 100/PUN/2011 A.Y.2008-09 REVISED RETURN ERRONEOUSLY ON GUIDANCE OF DDIT (INVESTIG ATION) 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 CO NSIDERATION RECEIVED BY THE ASSESSEE @ RS.9.50 LAKHS PER ACRE IN ACCORDANCE WITH TERMS OF SUPPLEMENTARY AGREEMENT DATED 15.02.2008. IN SUPPORT O F HIS SUBMISSIONS THAT INCOME CHARGEABLE TO TAX MUST ACCRUE OR ARISE IN T HE 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 COMMI SSIONER 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 29 TH 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 ASS ESSEE HAS ASSAILED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN NOT ALLO WING THE EXPENDITURE INCURRED FOR REMOVING THE ENCUMBRANCES AND ENCROACHMENT FROM THE SAID LAND AND PAYMENTS MADE TO STAKE HOLDERS FOR SE TTLING THEIR CLAIMS IN RESPECT OF LAND UNDER CONSIDERATION. 8. ON THE OTHER HAND, SHRI RAJEEV KUMAR REPRESENTING T HE DEPARTMENT VEHEMENTLY DEFENDED THE ASSESSMENT ORDER. THE LD. DR SU BMITTED THAT IN THE ORIGINAL RETURN OF INCOME, THE ASSESSEE HAD DISCLOSED INCOM E 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 A DDITIONAL INCOME @RS.9.50 LAKHS PER ACRE IN RESPECT OF LAND COMPRISING IN G AT 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 REV ISED 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 POSSES SION OF THE LAND HAS BEEN HANDED OVER BY THE ASSESSEE TO JUTURNA DEVELOPE RS 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. D R PLACED RELIANCE ON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN TH E 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 L AND COMPRISING GAT NO.86 IS CONCERNED, IT IS PART OF SAME TRANSACTION AS IS E VIDENT FROM MOU DATED 19.07.2007 AT PAGE NO.202 TO 217 OF THE PAPER BOO K. THE LAND IN GAT NO.86 CANNOT BE TREATED AS SEPARATE/INDEPENDENT TRANS ACTION. THE SALE DEED IN RESPECT OF GAT NO.86 MAY HAVE BEEN EXECUTED AT LATE R POINT OF TIME BUT IT IS PART OF COMPOSITE CONTRACT COMPRISING OF GAT NO.85, GAT N O. 86 AND GAT NO. 307. THUS, THE ENTIRE SALE CONSIDERATION IN RESPECT OF LAN D COMPRISING IN GAT 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 ASSESSE E IN CONNECTION WITH LANDS COMPRISING IN GAT NO.85, GAT NO.86 AND GAT NO.307. 9. CONTROVERTING THE SUBMISSIONS MADE BY THE DR, THE LD. AR SUBMITTED THAT THE ASSESSEE WAS OWNER OF THE LAND COMPRISING IN GA T 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 HA VING 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 BU T THERE WAS DISPUTE IN RESPECT OF LAND COMPRISING IN GAT NO.85. TO SUPPORT HIS S UBMISSION 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 T HE PAPER BOOK. THUS, THERE WERE ENCUMBRANCES ON THE TITLE OF LAND WHIC H THE ASSESSEE REMOVED OVER THE PERIOD OF TIME AFTER EXECUTION OF MOU DATED 19.07.200 7. 9.1 THE LD. AR FURTHER SUBMITTED THAT IN RESPECT OF NAZR ANA LAND COMPRISING IN GAT NO.86, THE ASSESSEE PAID NAZRANA FEE A ND OBTAINED CLEARANCE FROM OFFICE OF DISTRICT COLLECTOR IN 2009 AND THEREA FTER, THE SALE DEED IN RESPECT OF GAT NO.86 WAS EXECUTED ON 17.07.200 9. 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 INE XTRICABLY 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 HAV E BEEN OF NO USE TO THE PURCHASER. THE LD. AR REFERRED TO THE SITE MA P OF THE LAND AT PAGE NO.414 OF THE PAPER BOOK AND POINTED THAT THE LAND COMP RISING 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. TH EREFORE, THE ENTIRE PIECE OF LAND ADMEASURING 74 ACRES COMPRISING GAT NO. 85, G AT NO. 86 AND GAT NO.307 IS CONTIGUOUS LAND. THEREFORE, THE PURCHASER OF THE LAND I.E. JUTURNA DEVELOPERS PVT. LTD. WITHHELD PART OF CONSIDERAT ION IN RESPECT OF GAT NO.85 AND GAT NO. 307 AND ONLY PAID RS.12 LAKHS PER AC RE AT THE TIME OF EXECUTION OF SALE DEED. THE REMAINING AMOUNT OF RS.9.50 LAK HS PER ACRE WAS RECEIVED BY THE ASSESSEE AT LATER DATE IN ACCORDANCE W ITH TERMS OF SUPPLEMENTARY AGREEMENT DATED 15.02.2008. THE LD. AR SUBM ITTED THAT RELIANCE ON THE DECISION RENDERED IN THE CASE OF CHATURBH UJ 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 POS SESSION 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 PUR CHASER 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 . 10. WE HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTAT IVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. WE HA VE CONSIDERED THE DECISIONS ON WHICH RELIANCE HAS BEEN PLACED BY BOTH THE S IDES. WE HAVE ALSO EXAMINED DOCUMENTS WHICH WERE REFERRED BY THE RIVAL SID ES WHILE MAKING SUBMISSIONS. THE UNDISPUTED FACTS OF THE CASE ARE THAT TH E ASSESSEE ENTERED INTO MOU DATED 19.07.2007 WITH JUTURNA DEVELOPERS PVT L TD. 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. SINN AR FOR A CONSIDERATION OF RS.28.50 LAKHS PER ACRE. IT IS ALSO UNDISPU TED 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 COMPRIS ING IN GAT NO.86, THE ASSESSEE WAS HAVING RIGHTS. THE LAND IN GAT NO. 86 WAS N AZRANA 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 TH E 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 DEVE LOPERS 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. A N AGREEMENT OF SALE WITH RESPECT TO GAT NO. 86 WAS EXECUTED ON SAME DATE WITH JUTURNA DEVELOPERS PVT. LTD. A SUPPLEMENTARY AGREEMENT DATED 1 5.02.2008 WAS EXECUTED FOR PAYMENT OF BALANCE CONSIDERATION I.E. RS.9.50 L AKHS (RS.21.50 LAKHS- RS.12 LAKHS) BY JUTURNA DEVELOPERS PVT. LTD. TO T HE ASSESSEE ON REMOVAL OF ENCUMBRANCES AND AFTER OBTAINING CLEARANCE IN R ESPECT OF NAZRANA LAND. 11. THE ASSESSEE IN ORIGINAL RETURN OF INCOME FILED ON 30.09 .2008 OFFERED TO TAX CONSIDERATION RECEIVED @ RS. 12 LAKHS PER ACRE IN RE SPECT OF GAT NO. 35 AND GAT NO. 307 AS BUSINESS INCOME. HOWEVER, THE ASSE SSEE 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, PAY MENT MADE FOR SETTLING CLAIMS OUT OF COURT TO STAKE HOLDERS IN RESPECT O F LAND IN GAT NO. 85 ETC. THE ASSESSING OFFICER DISALLOWED EXPENDITURE CLAIMED BY T HE ASSESSEE FOR SETTLING VARIOUS CLAIMS AS MENTIONED ABOVE AND ASSESSED T OTAL INCOME ON THE BASIS OF REVISED RETURN FILED BY THE ASSESSEE. 12. BEFORE THE FIRST APPELLATE AUTHORITY, ASSESSEE RAISED ADDITIONAL GROUND 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 COMMIS SIONER OF INCOME TAX (APPEALS) HELD THAT THE SAME SHOULD BE CONSIDERED IN THE ASSESSMENT YEAR IN WHICH THE ASSESSEE OFFERS ADDITIONAL INCOME @ RS.9.5 0 LAKHS PER ACRE IN RESPECT OF GAT NO. 85 AND GAT NO. 307. 13. IN THE BACKDROPS OF ABOVE FACTUAL MATRIX, ISSUES THA T EMERGE BEFORE US FOR ADJUDICATION ARE: 1. WHETHER THE COMMISSIONER OF INCOME TAX (APPEALS) CAN ENTE RTAIN ADDITIONAL GROUND OF APPEAL AND REDUCE INCOME RETURNED IN THE REVISED RETURN OF INCOME? 2. THE YEAR OF TAXABILITY OF ADDITIONAL CONSIDERATION I.E. RS.9.50 LAKHS PER ACRE RECEIVED BY THE ASSESSEE IN RESPECT OF SALE O F LAND COMPRISING IN GAT NO. 85 AND GAT NO. 307 AND ENTIRE CONSI DERATION RECEIVED IN RESPECT OF GAT NO.86. 14. THE COMMISSIONER OF INCOME TAX (APPEALS) ADMITTED THE ADDITIONAL GROUND OF APPEAL BY FOLLOWING THE DECISION OF HON'BLE JURISDICT IONAL HIGH COURT IN THE CASE OF ASBESTOS CEMENT LTD. VS. COMMISSION ER OF INCOME TAX, REPORTED AS 203 ITR 358 AND THEREAFTER, ADJUDICATED T HE 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 68 8 AND HELD THAT THE FIRST APPELLATE AUTHORITY HAS POWER TO CONSIDER THE ADDIT IONAL 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) ADMITT ING 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 INCO ME HAS ACCRUED. THE CBDT VIDE CIRCULAR NO.14 DATED 11.04.1955 HAS EMPHASIZ ED THAT THE ASSESSING OFFICER SHOULD NOT TAKE ADVANTAGE OF AN ASSESSE ES IGNORANCE TO COLLECT MORE TAX THAN WHAT IS LEGITIMATELY DUE FROM HIM. THU S, 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 ADDITION AL GROUND BEFORE THE APPELLATE AUTHORITY. 15. THE ASSESSEE IN THE REVISED RETURN OF INCOME HAD OFFE RED ADDITIONAL INCOME FROM THE SALE OF LAND THOUGH THE SAME HAD NOT AC CRUED TO THE ASSESSEE IN THE ASSESSMENT YEAR UNDER APPEAL. A PERUSA L 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 RECE IVE BALANCE CONSIDERATION OF RS.9.50 LAKHS PER ACRE ON HANDING OVER O F ABSOLUTE UNENCUMBERED VACANT POSSESSION OF LAND. AT THE TIME OF EX ECUTION OF SALE DEED, THE ASSESSEE PURPORTEDLY HANDED OVER SYMBOLIC PO SSESSION OF THE LAND COMPRISING IN GAT NO. 85 AND GAT NO. 307 TO THE PURCHAS ER. 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 RECEIVE D CONSIDERATION IN RESPECT OF AFORESAID LAND @ RS. 12 LAKHS PER ACRE, AS A GAINST AGREED CONSIDERATION OF RS.21.50 LAKHS PER ACRE. THUS, BALANCE CON SIDERATION RS.9.50 LAKHS PER ACRE WAS TO BE RECEIVED BY THE ASSES SEE IN ACCORDANCE WITH THE SUPPLEMENTARY AGREEMENT UPON CLEARING ALL ENCUMBRANC ES AND ENCROACHMENT FROM THE LAND. IN OTHER WORDS, THE ADDITION AL INCOME COULD ACCRUE TO THE ASSESSEE ONLY ON COMPLIANCE OF THE CONDIT IONS 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 ASS ESSEE IS IN MOU EXECUTED ON 19.07.2007 BUT THERE WERE CONDITIONS ATTACH ED TO IT. IT IS ONLY ON COMPLIANCE OF THE CONDITIONS THAT THE ASSESSEE WOULD HAVE BEEN ENTITLED TO RECEIVE THE ENTIRE SALE CONSIDERATION. 16. A PERUSAL OF THE MOU DATED 19.07.2007 ENTERED BETWEE N THE ASSESSEE, COORDINATORS AND JUTURNA DEVELOPERS PVT. LTD. REVEAL TH AT 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 AN D 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 COU LD GET CLEARANCE IN RESPECT OF GAT NO. 86 IN THE YEAR 2009 AND HAD ALSO REM OVED 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 EXECUT ED ON 17.07.2009. THUS, THE ASSESSEE COULD FINALLY COMPLY WITH THE TERMS A ND CONDITIONS OF MOU DATED 19.07.2007 ONLY IN THE YEAR 2009. IN THE RETU RN OF INCOME FOR ASSESSMENT YEAR 2010-11, THE ASSESSEE HAS OFFERED CON SIDERATION 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 O F THE PAPER BOOK) SHOWS THAT THE ASSESSEE HAS NOT OFFERED BALANCE CONSIDE RATION RS. 9.50 LAKHS PER ACRE IN THE RETURN OF INCOME. HOWEVER, DURING THE AS SESSMENT PROCEEDINGS, THE ASSESSEE AGREED FOR THE ADDITION OF BALAN CE CONSIDERATION @ RS.9.50LAKHS PER ACRE NET OF THE EXPENDITURE CLAIMED FOR REMOVING ENCUMBRANCES ETC. THE ASSESSING OFFICER HAS MADE THE AD DITION OF THE AMOUNT DELETED IN ASSESSMENT YEAR 2008-09. THUS, THE D ISPUTE RAISED BY THE REVENUE QUA TAXATION OF ADDITIONAL INCOME IN ASSESSMENT YE AR 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. N O 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 R ECORD, WE CONCUR WITH THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN HO LDING 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. 17. THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF M/ S. P.G & W SAWOO PVT. LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX (SUPRA.) A FTER CONSIDERING THE JUDGMENT RENDERED IN THE CASE OF E.D. SESSON & CO. L TD. VS. COMMISSIONER OF INCOME TAX, REPORTED AS 26 ITR 27 HELD T HAT 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 BROUG HT IT TO TAX IN THE SUBJECT ASSESSMENT YEAR IS NOT CORRECT. THIS FOR TH E REASON, THAT THE AMOUNTS TO BE RECEIVED AS DEFERRED CONSIDERATION UN DER THE AGREEMENT COULD NOT BE SUBJECTED TO TAX IN THE ASSESSMENT YEA R 2006-07 AS THE SAME HAS NOT ACCRUED DURING THE YEAR. AS POINTED OU T ABOVE, ACCRUAL WOULD BE A RIGHT TO RECEIVE THE AMOUNT AND THE RESP ONDENT-ASSESSEE ALONG WITH ITS CO-OWNERS HAVE NOT UNDER THE AGREEME NT DATED 25 TH JANUARY, 2006 OBTAINED A RIGHT TO RECEIVE RS.20 CRO RES OR ANY SPECIFIED PART THEREOF IN THE SUBJECT ASSESSMENT YEAR. 18. IN SO FAR AS THE JUDGMENT OF HON'BLE BOMBAY HIGH COU RT IN THE CASE OF CHATURBHUJ DWARKADAS KAPADIA VS. COMMISSIONER OF TAX (S UPRA.) IS CONCERNED, THERE IS NO DISPUTE ABOUT THE RATIO LAID DOWN IN THE SAID CASE. HOWEVER, IN OUR CONSIDERED OPINION THE SAME WOULD NOT APP LY 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 AGREEME NT WAS EXECUTED, SUBSTANTIAL CONSIDERATION WAS RECEIVED AND POSSESSION OF L AND WAS HANDED OVER TO THE DEVELOPER. PERMISSIONS FROM VARIOUS AUTHORITIES WERE TAKEN AND COMMENCEMENT CERTIFICATE WAS ALSO OBTAINED. IN THE PRESEN T 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 ENCUM BRANCES AND ENCROACHMENTS FROM THE LAND AND THE CLAIMS OF STAKE HOLDE RS WERE NOT SETTLED. THE ASSESSEE ONLY GAVE SYMBOLIC POSSESSION OF TH E LAND. THE ASSESSEE RECEIVED BALANCE CONSIDERATION AFTER COMPLYING WITH THE TE RMS & CONDITIONS; IT WAS UNDER OBLIGATION TO PERFORM. THUS, THE INCOME ACCRUED TO THE ASS ESSEE ON COMPLETING HIS PART OF OBLIGATION. 19. IN VIEW OF THE FACTS OF THE CASE AND JUDGMENT DISCUSS ED ABOVE, GROUND NO. 1 RAISED IN APPEAL BY THE REVENUE IS DISMISSED . 20. IN GROUND NO. 2 OF THE APPEAL, THE REVENUE HAS ASSA ILED DELETING OF ADDITION OF RS. 2,27,90,000/- MADE ON ACCOUNT OF INCOME ACCR UED 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 A FTER OBTAINING VATAN ORDER ON PAYMENT OF NAZRANA FROM THE OFFICE OF CO LLECTOR. THE ASSESSEE HAD RECEIVED SALE CONSIDERATION IN RESPECT OF SA ID 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 21. IN GROUND NO.3 OF THE APPEAL, THE REVENUE HAS ASSAILED DELETING THE 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 A MOUNT TO DOUBLE TAXATION TO THE SAME AMOUNT, ESPECIALLY WHEN ADDITION WA S MADE IN THE HANDS OF ASSESSEE ON PROTECTIVE BASIS. THE COMMISSIONER O F 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 . 22. THE GROUND NOS. 4 TO 6 ARE GENERAL IN NATURE AND H ENCE REQUIRES NO ADJUDICATION. 23. THUS, IN VIEW OF OUR ABOVE FINDINGS, THE APPEAL OF REVENUE IS DISMISSED . 24. IN THE CROSS OBJECTION, THE ASSESSEE HAS ASSAILED DIS ALLOWANCES OF VARIOUS EXPENDITURE BY THE COMMISSIONER OF INCOME TAX (AP PEALS). WE FIND THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS DIRECTE D 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 C ONSIDERATION QUA GAT NO. 85 AND GAT NO.307. A PERUSAL OF THE ASSESSMENT ORDER FOR ASSE SSMENT 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 EX PENDITURE 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 EXPENDITUR E IN REVISED RETURN OF INCOME AGAINST THE ADDITIONAL INCOME. THE ASSESSE ES CLAIM OF EXPENDITURE HAS BEEN DEFERRED TO THE YEAR OF ASSESSEE OFFERING ADDITIONAL INCOME BY THE COMMISSIONER OF INCOME TAX (APPEALS) WITH A D IRECTION TO ALLOW THE SAME AGAINST ADDITIONAL INCOME. WE CONCUR WITH THE FINDIN GS OF COMMISSIONER OF INCOME TAX (APPEALS). HENCE, THE CROSS OBJ ECTIONS OF THE ASSESSEE CLAIMING EXPENDITURE IN THE ASSESSMENT YEAR UND ER APPEAL ARE DISMISSED. 25. IN THE RESULT, APPEAL OF THE REVENUE AND CROSS OBJ ECTIONS RAISED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON MONDAY , THE 18 TH DAY OF JUNE, 2018 SD/- SD/- ( . /D. KARUNAKARA RAO) ( ! /VIKAS AWASTHY) / ACCOUNTANT MEMBER ! / JUDICIAL MEMBER / PUNE; '# / DATED : 18 TH JUNE, 2018 SB + , )'-. / '- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEAL)-1, NASHIK. 4. THE CIT-1, NASHIK. 5. &'( !!)* , + )* , ,-. , / DR, ITAT, A BENCH, PUNE. 6. (/0 12 / GUARD FILE. // TRUE COPY // +3 / BY ORDER, !4 ). / PRIVATE SECRETARY + )* , / ITAT, PUNE.