Asst. CIT, Circle-2, Pune V. Shri Rajendra Sitaram Goel, Pune

ITA 1485/PUN/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7480 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 15-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL PATHAK; VIPIN GUJRATHI
• Assessee Lawyers: T VIJAYA B REDDY
• Keywords: Capital asset; Business income; Business expenditure; Earning of tax free income; Question of law; Cost of acquisition; Fair market value; Right to appeal; Commercial expediency
• Section: 45(5); 2(14); 14A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , ! , # $ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1310/PUN/2013 #& & / ASSESSMENT YEAR : 2009-10 SHRI RAJENDRA S. GOEL, SAN MAHU COMMERCIAL COMPLEX, 5, BUND GARDEN ROAD, OPPOSITE POONA CLUB, PUNE 411001 PAN : AAWPG 2105J . /APPELLANT V/S ADDL.CIT, RANGE-2, PUNE . /RESPONDENT . / ITA NO.1485/PUN/2013 #& & / ASSESSMENT YEAR : 2009-10 ADDL.CIT, RANGE-2, PUNE . /APPELLANT V/S SHRI RAJENDRA S. GOEL, SAN MAHU COMMERCIAL COMPLEX, 5, BUND GARDEN ROAD, OPPOSITE POONA CLUB, PUNE 411001 PAN : AAWPG 2105J . /RESPONDENT . / ITA NO.748/PUN/2013 #& & / ASSESSMENT YEAR : 2009-10 DEEPAK LAXMAN KUDALE, 6, SAHAJEEVAN SOCIETY, BHOSALE NAGAR, AUNDH, PUNE 411007 PAN : ABFPK3541C . /APPELLANT V/S JT. CIT, RANGE-4, PUNE . /RESPONDENT 2 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 . / ITA NO.749/PUN/2013 #& & / ASSESSMENT YEAR : 2009-10 NEERAJ HORTICULTURISTS PVT. LTD., FLAT NO.5, VIJAYA LAXMAN BUILDING, PARVATI DARSHAN SOCIETY, OFF. SINHAGAD ROAD, PUNE 411 030 PAN :AAACN6323L . /APPELLANT V/S JCIT, RANGE-4, PUNE . /RESPONDENT . / ITA NO.933/PUN/2013 #& & / ASSESSMENT YEAR : 2009-10 NUPOORA DEVELOPERS PVT. LTD., C/O. DEEPAK GROUP, FLAT NO.5, VIJAYA LAXMAN BUILDING, OFF. SINHAGAD ROAD, PARVATI DARSHAN CO.OP SOCIETY, PUNE 411 030 PAN : AAACN6322M . /APPELLANT V/S ACIT, RANGE-2, PUNE . /RESPONDENT / APPELLANT BY : SHRI SUNIL PATHAK & SHRI VIPIN GUJRATHI / RESPONDENT BY : SHRI T. VIJAYA B. REDDY / ORDER PER R.K.PANDA, AM : ITA NO.1310/PUN/2013 FILED BY THE ASSESSEE AND ITA NO.1485/PUN/2013 FILED BY THE REVENUE ARE CROSS APP EALS AND ARE DIRECTED AGAINST THE ORDER DATED 28-02-2013 OF THE CIT(A)-II , PUNE RELATING TO ASSESSMENT YEAR 2009-10. ITA NOS. 748/PUN/2013 AND 749/PUN/2013 FILED BY THE RESPECTIVE ASSESSEES ARE DIRECTED AGAI NST THE SEPARATE ORDERS / DATE OF HEARING :09.11.2016 / DATE OF PRONOUNCEMENT: 09.01.2017 3 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 DATED 09-11-2012 OF THE CIT(A)-II, PUNE RELATING TO ASSESSMENT YEAR 2009- 10. ITA NO. 933/PUN/2013 FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 09-12-2012 OF THE CIT(A)-II, PUNE RELAT ING TO ASSESSMENT YEAR 2009-10. FOR THE SAKE OF CONVENIENCE, ALL THESE APP EALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON O RDER. ITA NO. 1310/PUN/2013 AND ITA NO.1485/PUN/2013 ) : 2. GROUND OF APPEAL NO.1 BY THE ASSESSEE AND ALL GR OUNDS RAISED BY THE REVENUE RELATE TO THE PART RELIEF GRANTED BY THE CI T(A) OUT OF THE DISALLOWANCE OF RS.68,86,009/- MADE BY THE ASSESSIN G OFFICER U/S.14A R.W. RULE 8D OF THE I.T. RULES. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF BUILDERS, PROMOTERS AND DEVELOPERS. HE FILED HIS RETURN OF INCOME ON 31-10-2009 DECLARING TOTAL INCO ME OF RS.8,55,29,700/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASS ESSING OFFICER OBSERVED THAT ASSESSEE HAS SUBSTANTIAL INVESTMENTS FROM WHICH IT IS RECEIVING EXEMPT INCOME. MOST OF THESE INVESTMENTS ARE IN THE FORM OF INVESTMENTS IN SHARES OF COMPANIES AND IN PARTNERSH IP FIRMS, THE INCOME FROM WHICH IS EXEMPT. HE, THEREFORE, ASKED THE ASS ESSEE TO EXPLAIN AS TO WHY PROPORTIONATE DISALLOWANCE SHOULD NOT BE MADE A S PER THE PROVISIONS OF SECTION 14A R.W. RULE 8D. THE ASSESSEE FILED A DET AILED EXPLANATION ACCORDING TO WHICH THE INTEREST FREE FUNDS AVAILABL E AT ITS DISPOSAL ARE MORE THAN THE INVESTMENTS MADE IN THE PARTNERSHIP FIRMS AND SHARES OF INDIAN COMPANIES. IT WAS SUBMITTED THAT RULE 8D SHOULD BE RESORTED ONLY AFTER THE ASSESSING OFFICER IS NOT SATISFIED WITH THE CORRECT NESS OF THE CLAIM OF THE ASSESSEE. 4. HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. HE OBSERVED THAT ASSESSEE H AS NOT MAINTAINED SEPARATE BOOKS OF ACCOUNT FOR ITS BUSINESS WHICH IS YIELDING EXEMPT INCOME 4 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 AND FOR ITS BUSINESS WHICH IS YIELDING TAXABLE INCO ME. MOREOVER, THE ASSESSEE IS HAVING A COMMON POOL OF FUNDS FOR ITS E NTIRE BUSINESS OPERATIONS INCLUDING THE BUSINESS WHICH IS YIELDING EXEMPT INCOME. THEREFORE, THE EXPENDITURE ATTRIBUTABLE TO EARNING OF EXEMPT INCOME CAN ONLY BE REASONABLY DETERMINED BY INVOKING RULE 8D. HE OBSERVED THAT THE ASSESSEE HAS CONSIDERED INTEREST OF ONLY RS.3,16,38 3/- WHILE COMPUTING THE DISALLOWANCE AS PER RULE 8D. HOWEVER, OTHER THAN I NTEREST OF RS.3,16,383/- SEPARATELY CLAIMED IN THE PROFIT AND LOSS ACCOUNT, AN AMOUNT OF RS.2,26,91,805/- HAS ALSO BEEN CLAIMED AND CLUBBED UNDER THE HEAD PURCHASES. HE, THEREFORE, CONSIDERED FOR DISALLOWA NCE U/S.14A THE INTEREST OF RS.2,30,08,188/-, I.E. RS.2,26,91,805/ + RS.3,16 ,383. APPLYING THE PROVISIONS OF SECTION 14A R.W. RULE 8D THE ASSESSIN G OFFICER DISALLOWED AN AMOUNT OF RS.68,86,009/- AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 5. BEFORE CIT(A) IT WAS SUBMITTED THAT AS AGAINST I NCURRING OF TOTAL EXPENDITURE OF RS.3,16,383/- THE ASSESSING OFFICER DISALLOWED AN AMOUNT OF RS.68,86,009/-. REFERRING TO THE DECISION OF THE D ELHI BENCH OF THE TRIBUNAL IN THE CASE OF GILLETTE GROUP INDIA PVT. LTD. VS. A CIT AND OTHERS AND THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CAS E OF M/S.SEARCH ENVIRO LTD. IT WAS ARGUED THAT THE DISALLOWANCE U/S.14A CA NNOT EXCEED THE ACTUAL EXPENDITURE. 6. SO FAR AS THE INTEREST COST OF RS.2,26,91,805/- IS CONCERNED IT WAS STATED THAT THE SAME HAS NOT BEEN CHARGED TO THE PR OFIT AND LOSS ACCOUNT BUT HAS BEEN CAPITALIZED/ADDED TO THE LAND COST AS THE BORROWED FUNDS/WITHDRAWALS MADE FROM THE FIRM WERE UTILIZED FOR THE ACQUISITION OF LAND. ALTERNATIVELY, IT WAS REQUESTED THAT IF THE ENTIRE ADDITION IS NOT DELETED THEN TO RESTRICT THE EXPENDITURE INCURRED AT RS.3,1 6,383/-. 5 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 7. SO FAR AS THE OBSERVATION OF THE ASSESSING OFFIC ER THAT THE ASSESSEE HAS NOT MAINTAINED SEPARATE BOOKS OF ACCOUNT FOR HI S BUSINESS WHICH RELATED THE EXEMPT INCOME AND THE ONE WHICH HAS EAR NED TAXABLE INCOME IS CONCERNED, IT WAS SUBMITTED THAT THERE IS NO CONDIT ION U/S.14A FOR NON MAINTENANCE OF SEPARATE BOOKS OF ACCOUNT. IT WAS A CCORDINGLY ARGUED THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER SHOU LD BE DELETED. 8. HOWEVER, THE CIT(A) WAS NOT FULLY SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. REFERRING TO THE DECISION OF HON BLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE REPORTED IN 328 ITR 81 H E OBSERVED THAT AS PER THE SAID DECISION THE ASSESSING OFFICER IS AUTHORIZ ED TO RECOMPUTE THE DISALLOWANCE U/S.14A AS PER THE PRESCRIBED METHOD O NLY IN CASE HE IS NOT SATISFIED WITH THE CLAIM OF THE ASSESSEE HAVING REG ARD TO ITS ACCOUNTS. 9. SO FAR AS THE ARGUMENT OF THE ASSESSEE THAT ITS OWN FUNDS ARE MORE THAN THE INVESTMENT MADE AND NO DIRECT NEXUS BETWEE N THE BORROWED FUNDS AND THE INVESTMENT IS ESTABLISHED IS CONCERNED, HE OBSERVED THAT ASSESSEE HAS NOT DEMONSTRATED ITS JUSTIFICATION BY WAY OF AN Y ACCOUNTING METHOD OR BY ITS CASH FLOW WHICH CAN LEAD TO INFERENCE THAT N O EXPENDITURE HAS BEEN INCURRED. HE OBSERVED THAT THE ASSESSING OFFICER H AS NOT RESORTED TO ADHOC DISALLOWANCE AS CONTENDED BY THE ASSESSEE BUT HAS A RRIVED AT THE DISALLOWANCE AFTER INVOKING RULE 8D AS PRESCRIBED A ND ONLY THEREAFTER HAS ARRIVED AT THE FIGURE OF THE EXPENDITURE INCURRED B Y THE ASSESSEE. 10. AS REGARDS THE SUBMISSION OF THE ASSESSEE THAT INTEREST COST OF RS.2,30,68,188/- HAS BEEN CAPITALIZED AND ADDED TO THE COST OF THE PURCHASES HE OBSERVED THAT SUCH CAPITALIZED INTERES T HAS DIRECT NEXUS WITH THE LAND PURCHASED BY THE ASSESSEE AND THEREFORE TH E SAID INTEREST COULD NOT FORM PART OF THE INTEREST COST FOR WORKING OUT THE DISALLOWANCE UNDER RULE 8D AS THE SAME HAS NOT BEEN CHARGED TO THE PRO FIT AND LOSS ACCOUNT. HE THEREFORE HELD THAT THE AOS ACTION IN INCLUDING THE AFORESAID INTEREST 6 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 RELATED TO THE CAPITALIZED INTEREST IS NOT CORRECT IN THE GIVEN SET OF FACTS AND CIRCUMSTANCES OF THE CASE. RELYING ON VARIOUS DECI SION AND APPLYING PROVISION OF RULE 8D THE LD.CIT(A) RESTRICTED THE D ISALLOWANCE U/S.14A R.W. RULE 8D AT RS.10,53,815/- AND THEREBY GAVE RELIEF O F RS.58,32,194/- TO THE ASSESSEE. 11. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) IN GIVI NG PART RELIEF THE ASSESSEE AS WELL AS THE REVENUE ARE IN APPEAL BEFOR E THE TRIBUNAL. 12. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITTED THAT THE ASSESSEES OWN CAPITAL IS MORE THAN THE INVESTMENT IN THE PARTNERSHIP FIRM AS WELL AS THE INVESTMENT IN SHARES OF DIFFERENT CO MPANIES. REFERRING TO PAGE 24 OF THE PAPER BOOK HE DREW THE ATTENTION OF THE BENCH TO THE CAPITAL OF THE ASSESSEE AS WELL AS THE INVESTMENT IN PARTNE RSHIP FIRMS. HE SUBMITTED THAT NO DISALLOWANCE HAS BEEN MADE IN THE PRECEDING YEARS. REFERRING TO THE COPY OF THE PROFIT AND LOSS ACCOUN T, COPY OF WHICH IS PLACED AT PAGE 132 OF THE PAPER BOOK, HE DREW THE ATTENTIO N OF THE BENCH TO THE DIRECT EXPENSES OF RS.10,28,969.94 WHICH INCLUDES T HE INTEREST EXPENDITURE OF RS.3,16,383/- AS PER THE DETAILS GIVEN IN PAGE 1 37 OF THE PAPER BOOK. HE SUBMITTED THAT WHEN THE ASSESSEE HAS CLAIMED THE IN TEREST EXPENDITURE AT RS.3,16,383/- IT WAS NOT PROPER ON THE PART OF THE ASSESSING OFFICER TO CONSIDER THE ENTIRE INTEREST AND MAKE THE DISALLOWA NCE. HE ACCORDINGLY SUBMITTED THAT THE DISALLOWANCE SUSTAINED BY THE CI T(A) IS ALSO ON THE HIGHER SIDE AND IN NO CASE IT CAN EXCEED THE AMOUNT DEBITED TO THE PROFIT AND LOSS ACCOUNT. FOR THE ABOVE PROPOSITION, THE L D. AUTHORISED REPRESENTATIVE RELIED ON THE FOLLOWING DECISIONS : 1. SHRI RAVI KUMAR SHEWANI VS. DCIT VIDE ITA NO.2120/P N/2013 ORDER DATED 23-01-2015 2. ACIT VS. BEDMUTHA INDUSTRIES LTD. VIDE ITA NO.1277/PN/ 2013 ORDER DATED 29-01-2015 3. GILLETTE GROUP INDIA PVT. LTD. VS. ACIT REPORTED IN 51 SOT 221 (DELHI) 7 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 13. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHE R HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED THAT RULE 8D HAS COME INTO FORCE FROM THE A.Y. 2008-09. THEREFORE, THE VARIOU S DECISIONS RELIED ON BY THE ASSESSEE BEFORE THE CIT(A) ARE NOT APPLICABLE T O THE FACTS OF THE PRESENT CASE. THE ASSESSEE HAS ALSO NOT EXPLAINED THE NEXU S BETWEEN THE BORROWED FUNDS AND THE INVESTMENT IN THE PARTNERSHI P FIRMS AND SHARES OF DIFFERENT COMPANIES. THEREFORE, RULE 8D HAS TO BE A PPLIED. HE SUBMITTED THAT THE ASSESSEE HAS NOT SHOWN ANY WORK-IN-PROGRES S. LAND WAS NOT SHOWN IN THE WORK-IN-PROGRESS AND THE ASSESSEE HAS NOT PROVED THAT HE HAS CAPITALIZED THE INTEREST. 14. THE LD. COUNSEL FOR THE ASSESSEE IN HIS REJOIND ER DREW THE ATTENTION OF THE BENCH TO THE OBSERVATION OF THE CIT(A) AT PA RA 3.5 OF THE ORDER WHICH READS AS UNDER : 3.5. . . . . . . . . . . . . . . . IT IS AN UNDISPUT ED FACT THAT THE APPELLANT HAD MADE INVESTMENT OF RS.19.82 CRORES IN THE PARTNERSHIP FIRM A ND SHARES OF COMPANIES AND IN MUTUAL FUNDS. THE ASSESSING OFFICER, HO WEVER, HAS CALCULATED THE DISALLOWANCE U/S.14A R.W. RULE 8D BY C ONSIDERING EVEN THE INTEREST COST OF RS.2,30,68,188/- WHICH ALSO INCLUD ED THE CAPITALIZED INTEREST ADDED TO THE COST OF LAND OF RS.2,26,91,805/- IN WORKING OUT THE DISALLOWANCE U/4 8D. THE AFORESAID CAPITALIZED INTER EST HAS A DIRECT NEXUS WITH THE LAND PURCHASED BY THE APPELLANT AND, T HEREFORE, THE SAID INTEREST COULD NOT FORM PART OF THE INTEREST COST FOR WORKING OUT THE DISALLOWANCE U/R 8D AS THE SAME HAS NOT BEEN CHARGED TO THE PROFIT AND LOSS ACCOUNT AND ONLY THE INTEREST AMOUNTING TO RS.3,16 ,383/- DEBITED TO THE PROFIT AND LOSS ACCOUNT COULD BE CONSIDERED FOR WORKING OUT THE DISALLOWANCE. THE ASSESSING OFFICERS ACTION IN INCLUDI NG THE AFORESAID INTEREST RELATED TO THE CAPITALIZED INTEREST, IN MY C ONSIDERED OPINION IS NOT CORRECT IN THE GIVEN SET OF FACT AND CIRCUMSTANC ES OF THE CASE. THUS THE DEFINITION OF VARIABLE AS EMBEDDED IN FORMULA U/ R 8D(2)(II) SPECIFICALLY EXCLUDES INTEREST EXPENDITURE DIRECTLY RE LATED TO EXEMPT INCOME AND IT DOES NOT INCLUDE INTEREST EXPENDITURE D IRECTLY RELATED TO TAXABLE INCOME. THUS THE WORKING OF THE DISALLOWANC E U/S. 14A R.W.R. 8D IS AS UNDER: WORKING AS PER RULE 8D (I) SUB-RULE 1(II) 3,16,383 X 19,44,99,752 75,67,56,500 = 81,316/- (II) SUB-RULE 2(II) 0.5 X 19,44,99,752 = 9,72,499/- TOTAL 10,53,815/- 8 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 HE SUBMITTED THAT THE CIT(A) HAS GIVEN A CATEGORICA L FINDING THAT THE ASSESSEE HAS CAPITALIZED THE INTEREST TO LAND COST. HE ACCORDINGLY SUBMITTED THAT DISALLOWANCE U/S.14A, IF ANY, HAS TO BE RESTRI CTED TO THE AMOUNT CLAIMED IN THE PROFIT AND LOSS ACCOUNT. 15. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. THERE IS NO DISPUTE TO THE FACT T HAT THE ASSESSEE HAS CLAIMED INTEREST EXPENDITURE OF RS.3,16,383/- WHILE COMPUTING THE DISALLOWANCE AS PER RULE 8D. IT IS ALSO AN ADMITTE D FACT THAT ASSESSEE HAS SEPARATELY CLAIMED INTEREST EXPENDITURE OF RS.2,26, 91,805/- WHICH HAS BEEN CLUBBED UNDER THE HEAD PURCHASES. WE FIND THE AS SESSING OFFICER DISALLOWED AN AMOUNT OF RS.2,30,08,188/- U/S.14A R. W. RULE 8D ON THE GROUND THAT ASSESSEE HAS NOT MAINTAINED SEPARATE BO OKS OF ACCOUNT FOR ITS BUSINESS WHICH IS YIELDING EXEMPT INCOME AND FOR IT S BUSINESS WHICH IS YIELDING TAXABLE INCOME. FURTHER, THE ASSESSEE HAS COMMON POOL OF FUNDS FOR ITS ENTIRE BUSINESS OPERATION INCLUDING THE BUS INESS WHICH IS YIELDING THE EXEMPT INCOME. WE FIND IN APPEAL THE LD.CIT(A) HEL D THAT THE INTEREST EXPENDITURE WHICH HAS BEEN CAPITALISED CANNOT BE CO NSIDERED FOR COMPUTING THE DISALLOWANCE U/S.14A R.W. RULE 8D. H E, HOWEVER, APPLYING THE PROVISIONS OF SECTION 14A R.W. RULE 8D RESTRICT ED SUCH DISALLOWANCE TO RS.10,53,815/-. 16. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT SINCE OWN CAPITAL AND FREE RESERVES ARE MORE THAN THE INV ESTMENT IN THE PARTNERSHIP FIRM AND THE INVESTMENT IN SHARES OF IN DIAN COMPANIES, THEREFORE, NO DISALLOWANCE U/S.14A R.W. RULE 8D IS CALLED FOR. IT IS HIS ALTERNATE SUBMISSION THAT THE DISALLOWANCE U/S.14A R.W. RULE 8D IN ANY 9 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 CASE CANNOT EXCEED THE AMOUNT OF INTEREST EXPENDITU RE CLAIMED IN THE PROFIT AND LOSS ACCOUNT. 17. WE FIND SOME FORCE IN THE ABOVE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE. FROM THE VARIOUS DETAILS FURNISHED BY TH E ASSESSEE IN THE PAPER BOOK WE FIND THE FOLLOWING DETAILS : SR. PARTICULARS 01 - 04 - 2008 31 - 03 - 2009 1 INVESTMENT IN PARTNERSHIP FIRM 19,07,64,368/ - 19,82,35,136/ - 2 CAPITAL 26,72,36,768/ - 37,43,92,814/ - 18. FROM THE COPY OF THE BALANCE SHEET FILED ALONG WITH THE SCHEDULES, COPY OF WHICH IS PLACED AT PAGES 131 TO 148 OF THE PAPER BOOM, WE FIND THE INVESTMENT IN SHARES HAS BEEN SHOWN AT RS.4,55,134/ - (PAGE 143 OF PAPER BOOK). THUS, THE TOTAL INVESTMENT IN THE PARTNERSHI P FIRM AS WELL AS THE SHARES OF COMPANIES, THE INCOME OF WHICH IS EXEMPT, IS MUCH LESS THAN THE OWN CAPITAL AND FREE RESERVES OF THE ASSESSEE. THE DIFFERENT BENCHES OF THE TRIBUNAL ARE TAKING THE CONSISTENT VIEW, FOLLOWING THE DECISIONS OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. RELIANCE U TILITIES AND POWER LTD. REPORTED IN 313 ITR 340, AND IN THE CASE OF HDFC LT D. VS. DCIT REPORTED IN 383 ITR 529 AND THE DECISION OF HONBLE PUNJAB & H ARYANA HIGH COURT IN THE CASE OF CIT VS. MAX INDIA LTD. (NO.2) REPORTED IN 388 ITR 81, THAT AS LONG AS ASSESSEE WAS IN POSSESSION OF INTEREST FREE FUNDS IN EXCESS OF THE AMOUNT INVESTED IN EXEMPT INCOME BEARING INVESTMENT S, SUCH INVESTMENTS SHOULD BE PRESUMED TO HAVE BEEN MADE OUT OF INTERES T FREE FUNDS AVAILABLE WITH THE ASSESSEE. THE RATIONALE FOR THE PRESUMPTI ON IS THAT AN ASSESSEE WOULD UTILISE ITS FUNDS PRUDENTLY ENSURING THAT IT DERIVES THE GREATEST FINANCIAL ADVANTAGE. THE THIRD MEMBER OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF WIMCO SEEDLINGS LTD. REPORTED IN 107 ITD 267 (DE LHI)(TM) HAS HELD THAT ONLY EXPENDITURE, WHICH HAS BEEN PROVED TO HAVE BEE N INCURRED IN RELATION TO EARNING OF TAX FREE INCOME CAN BE DISALLOWED AND SECTION 14A CANNOT BE 10 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 EXTENDED TO DISALLOW SUCH EXPENDITURE WHICH IS ASSU MED TO HAVE BEEN INCURRED FOR THE PURPOSE OF EARNING TAX FREE INCOME . 19. SINCE IN THE INSTANT CASE ADMITTEDLY THE OWN CA PITAL OF THE ASSESSEE IS MUCH MORE THAN THE INVESTMENT TOWARDS CAPITAL IN THE PARTNERSHIP FIRMS AND SHARES OF INDIAN COMPANIES THE INCOME OF WHICH IS EXEMPT FROM TAX, THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT NO DISALLOWANCE U/S.14A IN THE INSTANT CASE IS CALLED FOR. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE T HE DISALLOWANCE MADE BY HIM U/S.14A OF THE I.T. ACT. GROUND RAISED BY THE REVENUE IS ACCORDINGLY DISMISSED AND THE GROUND RAISED BY THE ASSESSEE ON THIS ISSUE IS ALLOWED. 20. GROUNDS OF APPEAL NO.2 AND 3 BY THE ASSESSEE RE AD AS UNDER : 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE HONBLE CIT(A)-II, PUNE ERRED IN CONFIRMING THE ADD ITION OF CAPITAL GAIN OF RS.12,15,54,375/- IN RESPECT OF TRANSFER OF PLOT OF LAND SITUATED AT GAT NO.1277 & 1278, VILLAGE WAGHOLI , DIST. PUNE WITHOUT APPRECIATING THE FACTS OF THE CASE IN PROPER PERSPECTIVE. THE APPELLAN T HEREBY PRAYS THAT THE ADDITION MAY PLEASE BE DELETED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND I N LAW, THE HONBLE CIT(A)-II, PUNE FAILED TO APPRECIATE THE FO LLOWING FEATURE/FACTS OF THE TRANSACTION OF SALE OF LAND AND V ARIOUS OBLIGATIONS TO BE PERFORMED BY THE APPELLANT AND CO- OWNERS. (A) THAT THE TRANSACTION UNDER CONSIDERATION HAS TWO L IMBS (I) SALE OF THE PLOT OF LAND SITUATED AT GAT NO.1277 AND 1278, VILLAGE WAGHOLI, DIST. PUNE AT AND FOR THE CONSIDERAT ION OF RS.125.50 LACS AGAINST THE TRANSFER OF THE LAND UNDER CONSIDERATION AND (II) THE CONSIDERATION OF RS.125.50 LACS AGAINST THE PERFORMANCE OF VARIOUS OBLIGATION MENTION ING CLAUSE NO.IV OF THE SALE DEED DATED 2 ND MAY 2008. (B) THAT THE CAPITAL GAIN ARISING FROM THE TRANSFER O F THE LAND @ RS.125.50 LACS PER ACRE IS PROPERLY DECLARED BY THE APPELLANT AND THE BALANCE 50% CONSIDERATION WAS TOWARDS THE PERFORMANCE OF VARIOUS OBLIGATION IN TERMS OF CLAUSE NO.IV OF THE SALE DEED DATED 2 ND MAY 2008. (C) THAT THE CONSIDERATION OF RS.251/- LACS PER ACRE WAS MUCH MORE THAN THE PREVAILING MARKET VALUE OF THE L AND AND THE SAID AMOUNT EMBEDDED THE CONSIDERATION OF PERFORMANCE OF VARIOUS OBLIGATIONS. 11 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 THE APPELLANT HEREBY PRAYS THAT THE ADDITION OF RS.12 ,15,54,375/- MADE ON ACCOUNT OF LONG CAPITAL GAIN MAY PLEASE BE DELETED. 21. FACTS OF THE CASE, IN BRIEF, ARE THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER FOUND THAT THE AS SESSEE ALONG WITH OTHE R CO-OWNERS SOLD AGRICULTURAL LAND ADMEASURING 70 ACR ES SITUATED AT GAT NO . 1277 AND 1278 AT VILLAGE WAGHOLI , DISTRICT PUNE TO M/S. WAGHOLI PROPERTIES PVT . L TD BY A REG I STERED SALE DEED DATED 2 . 5.2008 . THE ASSESSING OFFICER FURTHER NOTICED T HA T AS P E R CLAUSE 3 OF T HE SALE DEED THE CONSIDERAT I ON PAYABLE I N RESPEC T OF T HE LA ND WAS RS . 2, 51 , 00 , 000/ - PER AC R E AND THE TOTAL CONS I DE R ATION OF THE L AND WAS OF RS . 1 , 75 , 80 , 04 , 250/ - . HE NOTED THAT THE ASSESSEE HAS CONSIDERED SALE CONSIDERATION OF RS. 12 , 15 , 54 ,3 75/ - AS AGA I NST THE TOTAL AGREED CONS I DERATION OF RS . 24 , 31 , 08 , 750/ - FOR THE PURPOSE OF COMPUTING CAPITAL GAIN. THE ASSESSING OFFICER, T HEREFORE ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE FULL VALUE OF SAL E CONSIDERATION SHOULD NOT BE ADOPTED FOR COMPUTING THE CAPITAL GAINS ON SALE OF LAND. 22. THE ASSESSEE SUBMITTED BEFORE THE ASSESS I NG OFFICER THAT M/S WAGHOLI PROPERT I ES PVT . LTD HAD PURCHASED THE AFORESAID LAND FOR DEVELOPMENT OF A SPECIAL TOWNSHIP PROJECT AND THE L AND PURCHASED WAS PART OF THE UNDERSTAND I NG BETWEEN THE VENDORS AND THE PURCHASER WHICH WAS REF L ECTED I N CLAUSES II , III , IV , AND V OF THE SALE DEED . IT WAS SUBMITTED THAT AS PER THE UNDERS T AND I NG BETWEEN THE VENDORS AND THE PURCHASERS , THE VENDO R S WERE PA I D CONSIDE R AT I ON OF RS . 1, 25 , 50 , 000/- PER ACRE AGAINST THE TRANSFER O F LAND AND THE BALANCE AMOUNT OF RS . 1 , 25 , 50 , 000/- PER ACRE PAYABLE ON PERFO R MA N CE OF CERTA I N OBLIGAT I ONS AS MENTIONED IN THE CLAUSES OF THE AGREEMENT/SALE DEED . THE ASSESSEE A L SO STATED THAT THE TRANSACTION UNDER CONSIDERATION HAD TWO LIMBS (I) S ALE OF PLOT OF LAND FOR THE CONSIDERATION OF RS . 125 . 50 LAKHS AGAINST THE TRANSFER O F LAND AND (II) THE CONSIDERATION OF RS. 125 . 50 AGAINST THE PERFORMANCE OF VARIOUS OBLIGATIONS MENTIONED AS PER CLAUSE (V) OF THE SALE DEED DATED 2-5-2008 . THUS, IT WAS 12 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 CONTENDED BEFORE THE ASSESSING OFFICER THAT THE INC OME NEITHER ACCRUED NOR WAS RECEIVED BY THE ASSESSEE AND THAT THE CONSI DERATION OF RS . 251 LAKHS PER ACRE WAS MUCH MORE THAN THE PREVAILING MARKET V ALUE OF THE LAND AND THE SAID AMOUNT EMBEDDED THE CONSIDERATION OF P ERFORMANCE OF VARIOUS OBLIGATIONS . 23. HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIE D WITH THE EXPLANATION GIVEN BY THE ASSESSEE. HE ARRIVED AT T HE CONCLUSION THAT THE ENTIRE CONSIDERATION AS PER THE SALE AGREEMENT WAS TAXABLE AS CAPITAL GAINS AND NOT 50% OF THE AMOUNT AS DECLARED BY THE ASSESS EE . HE NOTED THAT THE ASSESSEE ALONG WITH THE OTHER VENDORS HAD SOLD 70 A CRES OF LAND AT WAGHOLI TO M/S WAGHOLI PROPERTIES PVT . LTD . AND THE POSSESSION OF THE SAID PROPERTY HAD ALSO BEEN PASSED TO THE BUYERS AND THE STAMP DUTY ARISING FROM THE TRANSACTION ON THE AGGREGATE CONSIDERATION OF RS . 1 , 75 , 80 , 04 , 250/- AT RS. 7 , 03,20 , 170/- HAD ALSO BEEN PAID AND THAT THE VALUE OF THE ENTIRE TRANSACTION OF 70 ACRES OF LAND AT WAGHOLI HAD BEEN CONFIRMED IN THE INDEX- II AT RS . 1 , 75 , 80 , 04 , 250/- . HE OBSERVED THAT THE CONTENTION OF THE ASSESSEE OF THE LAND SALE TRANSACTION HAVING TWO LIMBS VIZ . TRANSFER OF CAPITAL ASSET AND PERFORMANCE OF SEVERAL OBLIGATIONS DID NOT HAVE ANY CONNECTION BETWEEN THE TWO SO FAR AS THE CALCULATION OF THE AM OUNT FOR THE TOTAL SALES CONSIDERATION WAS CONCERNED . THE ASSESSING OFFICER SPECIFICALLY NOTED THAT THE RATE PER SQ . MTR AND PER ACRE WAS CLEARLY MENTIONED IN THE AGREE MEN T AND THERE WAS NO VALUE ASCRIBED TO THE OBLIGATION T O BE FULFILLED BY THE ASSESSEE AND OTHER VENDORS AND , THEREFORE, THE ENTIRE TRANSACTION COULD BE DIVIDED INTO 2 PARTS VIZ. I) SALE OF 70 ACRES OF LAND II) PROCURING 38 ACRES OF LAND AND FULFILLING CERTAI N OBLIGATIONS . 24. THE ASSESSING OFFICER THUS HELD THAT THE SALE OF 70 ACRES OF LAND AT (I) ABOVE WAS CLEARLY TAXABLE U/S 2(24) (V) OF THE ACT AND FOR THE BALANCE 38 ACRES AT (II ) ABOVE , THE ASSESSEE AND OTHER VENDORS WERE ENTITLED TO 13 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 RECEIVE THE SAME AMOUNT OF CONSIDERATION I . E . 2,51,00,000/- PER ACRE AND THE COST AND EXPENSES TO BE BORNE BY THE ASSESSEE A LONG WITH OTHERS WI LL BE C L AIMED AS A BUSINESS EXPENDITURE WHILE DETERM I NING THE TAXABLE INCOME. THE ASSESS I NG OF FI CER WITH RESPECT TO THE CLAIM OF THE ASSESSEE THAT HE HAD NO 'RIGHT TO RECEIVE ' MONEY HE L D THE SAME TO BE NOT RELEVANT AS THE TRANSACTION WAS BEING TAXED UNDER THE HEAD ' CAPITAL GAINS ' AND NOT ' BUSINESS INCOME ' AND THAT THE ASSESSEE HAD HIMSELF TREATED THE SALE OF LAND AS SALE OF A CAPITA L ASSET . AS REGARDS THE PLEA OF THE ASSESSEE THAT THE FAIR MARKET VALUE OF THE P R OPERTY WAS MUCH LESS THAN THE SALES CONS I DERATION OF RS . 2 , 51,00 , 000/ - PER ACRE I ND I CATING T HE CONSIDERAT I ON COMPRIS I NG OF OTHER COMPONENTS THAN LAND IS CONCERNED, THE ASSESSING OFFICER NOTED THAT T HERE WAS NO MENTION I N THE SALE AGREEMENT THAT 50% OF THE CONSIDERATION RELA T ED TO T HE LAND COMPONENT AND THE BALANCE 50% RELATED TO FULFILLING OF SPEC I F I C OBLIGATIONS LISTED I N THE AGREEMENT. HE NOTED THAT THE ASSESSEE ALONG W I TH OTHERS HAD SHOWN THE FU L L VALUE OF THE T R ANSACT I ON AT RS . 1 , 75 , 80 , 04 , 250/ - F OR T HE PURPOSES OF REG I STRAT I ON AND BEFORE THE STAMP DUTY AUTHOR I TIES. THE ASSESSING OFFICER FURTHE R NOTED THAT THE SALE AGREEMENT ENTERED IN T O BY THE ASSESSEE AND OTHER VENDORS D I D NO T CONTEMPLATE ANY ARTIFICIAL DIVISION OF THE TOTAL CO NSIDERATION AS CONTENDED BY THE ASSESSEE AS T HE - BUYER M/S. WAGHOLI PROPERTIES PVT . LTD . HAD PAID STAMP DUTY ON THE TOTAL CONS I DE R ATION OF RS . 175 . 80 CRORES AND AS SUCH THERE WAS NO AMB I GUITY REGARDING THE SALE CONS I DERATION @ RS. 2 . 51 CRORE PE R ACRE AND THERE BEING NO DISPUTE FOR THE SAME BETWEE N THE PARTIES . THE ASSESSING OFFICER ALSO REJECTED THE CLA I M OF THE ASSESSEE THAT THE EFFECTIVE DATE OF TRANSFER OF THE PROPERTY DID NOT DEPEND SOLELY ON THE AGREEMENT BUT ALSO ON THE INTENTION OF THE PARTIES IN THE TRANSACT I ON . THE ASSESSING OFFICER RELIED ON THE DECIS I ON OF THE JURISDICTIONAL HON ' BLE BOMBAY HIGH COURT IN THE CASE OF CHATTURBHUJ DWARKA DAS KAPAD I A REPORTED IN 260 ITR 497 , WHERE I N IT HAS BEEN HELD THAT AFTER I NTRODUCT I ON OF SECTION 2(47) (V ) R . W . SUB - SECTION 45 , CAPITA L GA I N IS T AXABLE I N THE YEAR IN 14 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 WHICH SUCH TRANSACT I ON IS ENTERED INTO EVEN IF THE TRANSFE R OF IMMOVABLE PROPERTY I S NOT EFFECTIVE OR COMPLETE UNDER THE GENERAL LAW . DISTINGUISHING THE VARIOUS DECISIONS CITED BEFORE HIM THE ASSESSIN G OFFICER HELD THAT SINCE T HE SALE DEED AGREE M EN T FOR THE SALE OF 70 ACRES OF LAND WAS DULY REGISTE R ED ON 02 - 05 - 2008 AND THE STAMP DUTY WAS PAID AND THE POSSESSION OVE R THE PROPERTY WAS A L SO PASSED ON TO THE PU R CHASE R , THEREFORE , THE ENTIRE CONSIDERATION HAS TO BE CONSIDERED FOR T HE PURPOSE OF COMPUTING THE CAP I TAL GA I NS. THE ASSESSING OFFICER ACCORDINGLY ADOPTED THE ASSESSEE ' S SHARE AT RS . 24 , 31 , 08,750/ - AS AGAINST RS.12,15,54,375/- ADOPTED BY THE ASSESSEE FOR THE PURPOSE OF COMPUTIN G CAPITAL GAIN. 25. BEFORE CIT(A) THE ASSESSEE REITERATED THE SAME SUBMISSIONS AS MADE BEFORE THE ASSESSING OFF I CER DURING THE ASSESSMENT PROCEEDINGS. IT WAS ARGUED THAT THE TRANSACTION HAS TWO LIMBS , NAMELY , TRANSFER OF THE CAPITAL ASSET AND PERFORMANCE OF VAR I OUS OBLIGATIONS. THE ATTENTION OF LD.CIT(A) WAS DRAWN TOWARDS CLAUSE NO. (IV) OF THE SALE DEED . IT WAS SUBMIT T ED THAT ACCRUAL OF INCOME MEANS THE ASSESSEE MUST H AVE RIGHT TO R EC EIV E THE INCOME AND SINCE THE ASSESSEE IN THE INSTANT CASE HAS NEITHER RECEIVED THE INCOME NOR THE INCOME HA S ACCRUED , THEREFORE , NOTIONAL INCOME CANNOT BE BROUGHT TO TAX. IT WAS CONTENDED T HAT THE CAPITAL GAIN CANNOT BE TAXED IF THERE I S NO RECEIPT OF CONSIDERATION OR T HE CONSIDERATION HAS NOT ACCRUED TO THE ASSESSEE . IT WAS SUBMITTED THAT IN A SITUATION WHERE THE RIGHT TO RECEIVE PAYMENT IS IN DISPUTE AND IS N OT MERELY A QUESTION OF QUANTIFIED AMOUNT TO BE RECE I VED , INCOME CANNOT BE SAID TO HAVE BEEN ACCRUED TO THE ASSESSEE . THE ASSESSEE STRESSED ON THE POINT OF RIGHT TO RECE I VE THE AMOUNT AND SUBMITTED THAT THE ASSESSEE DID N OT HAVE A RIGHT TO RECEIVE AND , THEREFORE , THERE WAS NO QUESTION OF TAXING THE SAME . IT WAS EXPLAINED THAT THE TRANSACTION BE CONSIDERED IN TWO PARTS I . E . TRANSFER OF LAND FALLING UNDER THE HEAD CAPITAL GAINS AND PERFO RMANCE OF VARIOUS OBLIGATIONS TREATED AS A BUSINESS TRANSACTION . IT WAS STATED THAT THE 15 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 CONSIDERATION OF RS . 251 LAKHS PER ACRE INCLUDES SOMETHING MORE THAN THE CONSIDERATION OF THE CAPITAL ASSETS I.E . THE COST OF THE PERFORMANCE OF CAPITAL ASSETS . RELYING ON VARIOUS DECISIONS IT WAS CONTENDED THAT THE STAMP DUTY CANNOT BE THE BASIS FOR TAXING THE CAPIT AL GAINS . 26. HOWEVER, THE CIT(A) WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND UPHELD THE ACTION OF THE ASSESSING OFFICER BY OBSERVING AS UNDER : 4.3 THE APPELLANT ALONG WITH OTHER CO-OWNERS OF A PROPERTY ADMEASURING 70 ACRES SITUATED AT WAGHOLI HAVE SOLD THE ENTIRE PROPERTY TO WAGHOLI PROPERTIES PVT. LTD BY A REGISTERED SALE DE ED DATED 2-5-2008 FOR A TOTAL CONSIDERATION OF RS. 1,75,80,04,250/- AND THE TOTAL SHARE OF THE APPELLANT BEING 19,80,41,750/-. THE APPELLANT O N THE OTHER HAND HAS OFFERED ONLY 50% OF THE TOTAL VALUE OF SALE CONSIDERA TION FOR COMPUTING CAPITAL GAIN ON SALE OF THE AFORESAID LAND ON THE PLE A THAT THE BALANCE 50% OF THE AMOUNT OF RS. 1,25,50,000/- PER ACRE IS PA YABLE ON PERFORMANCE OF CERTAIN OBLIGATIONS AS PER THE CLAUSES O F THE SALE DEED. THUS THE CONTENTION OF THE APPELLANT IS THAT THE TRAN SACTION HAS TWO LIMBS - ONE RELATING TO THE TRANSFER OF PROPERTY I.E. SALE OF LAND AND SECOND RELATING TO PERFORMANCE OF OBLIGATIONS. THE MA TERIALS BROUGHT ON RECORD CLEARLY INDICATE THAT THE POSSESSION OF THE PROP ERTY IN QUESTION HAS BEEN PASSED ON TO THE BUYERS AND THE STAMP DUTY ARI SING ON THE TOTAL AGGREGATE CONSIDERATION OF RS. 1,75,80,04,250/- OF RS. 7,03,20,170/- HAS ALSO BEEN PAID IN ITS ENTIRETY. T HE SALE DEED OF THE PROPERTY HAS ALSO BEEN DULY REGISTERED WITH THE REGISTE RING AUTHORITY ON 2-5-2008. 4.4 IN THE SCHEME OF THE ACT, WHENEVER AN ASSESSEE REC EIVES MONEY OR MONEY'S WORTH IN THE COURSE OF THE TRANSACTION, INC OME EMBEDDED THEREIN ACCRUES OR ARISES TO HIM. THE CHARGEABILITY OF INCOME TO 'CAPITAL GAINS' IS WITH REFERENCE TO THE FULL VALUE OF CONSIDER ATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF CAPITAL ASSET DE DUCTING THE EXPENDITURE INCURRED THEREIN. THE CHARGE OF CAPITAL GAINS ARISES ONLY WHEN THERE HAS BEEN A DULY EXECUTED AND REGISTERED DE ED OF SALE. THE YEAR OF ASSESSMENT WOULD BE THE YEAR CORRESPONDING TO T HE PREVIOUS YEAR OF THE ASSESSEE IN WHICH THE SALE TOOK PLACE. THIS I S FOR THE REASON THAT SEC. 45 ENACTS THAT THE CAPITAL GAINS SHALL BY FI CTION 'BE DEEMED TO BE THE INCOME OF THE PREVIOUS YEAR IN WHICH THE TRAN SFER TOOK PLACE. SINCE THIS IS STATUTORY FICTION, THE ACTUAL YEAR IN WH ICH THE SALE PRICE WAS RECEIVED, WHETHER IT WAS ONE YEAR OR THREE YEARS OR F IVE YEARS ETC, PREVIOUS TO THE PREVIOUS YEAR OF TRANSFER IS BESIDE THE POINT. THE ENTIRETY OF THE SUM OR SUMS RECEIVED IN ANY EARLIER Y EAR OR YEARS WOULD BE REGARDED AS THE CAPITAL GAIN ARISING IN THE PREVIO US YEAR OF TRANSFER WHERE THE PAYMENT OF THE SALE PRICE IS POSTPONED TO A FUTURE DATE AND THE DEED OF TRANSFER VEST THE TITLE IN THE TRANSFEREE ON THE EXECUTION OF THE DOCUMENTS, EVEN SO, THE ABOVE FICTION OPERATES. IN THE WORDS OF SEC. 45, THE CAPITAL GAINS ARISING FROM THE TRANSFER 'SHALL BE THE INCOME OF THE PREVIOUS YEAR IN WHICH TRANSFER TOOK PLACE'. SO, THE PAYMENT OF CONSIDERATION STIPULATED TO BE PAID IN FUTURE WOULD H AVE TO BE ATTRIBUTED, BY STATUTORY MANDATE TO THE YEAR OF TRAN SFER. MERELY BECAUSE 16 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 THE ASSESSEE RECEIVES THE CONSIDERATION AFTER THE YEAR, L IABILITY CANNOT BE POSTPONED AS CAPITAL GAINS ARISE ON DATE OF TRANSFER. AN ANALYSIS OF SUB-SECTION (1) OF SEC. 45 INDICATES THAT FOLLOWING CO NDITIONS ARE NECESSARY TO ATTRACT THE PROVISIONS OF SUB-SECTION (1) F OR ANY PARTICULAR YEAR VIZ, THERE SHOULD BE A CAPITAL ASSET, THAT CAPITA L ASSET SHOULD HAVE BEEN HELD AS OWNED BY THE ASSESSEE, A 'TRANSFER' OF THAT CAPITAL ASSET SHOULD HAVE BEEN EFFECTED, SUCH TRANSFER SHOULD HAVE BE EN 'EFFECTED', IN THE PREVIOUS YEAR' RELEVANT TO PARTICULAR ASSESSMENT YE AR AND PROFITS OR GAINS SHOULD HAVE ARISEN FROM SUCH TRANSFER. IF THESE CON DITIONS ARE SATISFIED, THEN PROFITS AND GAINS IN QUESTION ARE CHARGE ABLE TO INCOME TAX UNDER THE HEAD 'CAPITAL GAINS' AND WOULD BE DEEM ED TO BE THE INCOME OF THE YEAR IN WHICH TRANSFER TOOK PLACE. IN ORDER TO ATTRACT TAX ON CAPITAL GAINS, SUBJECT MATTER OF TRANSFER SHOULD BE A CAPITAL ASSET WHICH HAS BEEN DEFINED U/S 2(14). IN THE PRESENT CASE, THIS ASPECT HAS NOT BEEN DISPUTED. CAPITAL GAINS ARISE ON TRANSFER OF A CAPITAL ASSET. HENCE, IT IS THE DATE OF TRANSFER, WHICH IS RELEVANT SO THAT THE ASSESSMENT YEAR IS THE ACCOUNTING YEAR DURING WHICH THE TAXABLE EVENT FALLS. NOW THE FINANCIAL YEAR IS MANDATORILY THE ACCOUNTING YEA R, THERE WOULD BE NO CONTROVERSY IN RESPECT OF THE ASSESSMENT YEAR AS LONG AS TH E TAXABLE EVENT WITH REFERENCE TO THE DATE OF TRANSFER IS DETER MINED. THE APPELLANT'S CONTENTION OF 'RIGHT TO RECEIVE' IN THIS CONTEXT IS NOT RELEVANT AS IT IS RELEVANT FOR THE PURPOSE OF BUSINESS AN D OTHER SOURCES. IN THE CASE OF CIT VS RAMESH KHANNA (2001) 249 ITR 359 (DEL), IT WAS DECIDED IN THAT FOR A.Y. 1976-77, WHEN FINANCIAL YE AR WAS NOT MANDATORY, ,THE ASSESSEE COULD CHOOSE THE ACCOUNTING YEA R WITH REFERENCE TO THE PREVIOUS YEAR FOR WHICH ACCOUNTS ARE KEPT BY HIM PURPORTEDLY FOLLOWING THE RULING OF SUPREME COURT I N CIT VS LADY KANCHANBAI (1970) 77 ITR 123 (SC). BUT ASSESSEE'S METHOD OF ACCOUNTING AND THE CHOICE OF ACCOUNTING YEAR IS RELE VANT ONLY FOR BUSINESS OR OTHER SOURCES SO THAT THE DECISION OF THE SUPR EME COURT COULD NOT HAVE APPLIED FOR INCOME FROM CAPITAL GAIN S. IN THE PRESENT CASE, HOWEVER, THE CONSIDERATION IS DETERMINATE AS PER THE FACT ON RECORD AS THE ENTIRE SALE CONSIDERATION FIXED FOR THE LAND HAS BEEN DETERMINED IN THE SALE DEED AND THE BUYER M/S WAGHOLI PROPERTIES PVT. LTD HAS PAID THE ENTIRE REGISTRATION COST ON THE TOTAL SALES CONSIDERATION OF RS. 7,03,20,170/- AND FURTHER THE SALE DEED HAS BEE N ALSO REGISTERED ON 2-5-2008. THUS THE FACT ON RECORD AS BROUGHT OUT, CLEARLY INDICATE THE TRANSFER U/S 2(47) OF THE PROPERTY OR ASSET U/S 2(14) LI ABLE FOR CAPITAL GAINS ON THE FULL CONSIDERATION AND NOT IN PART AS CON TENDED BY THE APPELLANT. THE CALCUTTA HIGH COURT IN THE CASE OF CI T VS BHUPINDER SINGH ATWAL (1983) 140 ITR 928 (CAL) HELD THAT SINCE THIS SE CTION CREATES AN ITEM OF 'ARTIFICIAL INCOME' ITS PROVISIONS SHOULD BE ST RICTLY CONSTRUED. THE CONDITIONS AS ENVISAGED IN SEC. 45 ARE SATISFIED IN THE PRESENT CASE SO AS TO ATTRACT THE CHARGE OF TAX ON THE FULL VALUE CONSIDERATION. THE APPELLANT'S RELIANCE THUS PLACED ON THE CASE OF E.O. S ASSOON & CO LTD VS CIT 26 ITR 27 (SC) WAS IN THE CONTEXT OF TRANSFER OF AN INCOME BEARING ASSET THE EXPECTANCY OF EARNING INCOME THERE FROM AT A FUTURE DATE THE CORPUS AS WELL AS THE EXPECTANCY WOULD FORM A SINGLE CA PITAL ASSET. IN THE PRESENT CASE THERE IS NO SUCH CASE ON FACT, HENCE TH E RELIANCE PLACED IS DISTINGUISHABLE AND NOT APPLICABLE TO THE PRESENT CA SE. THE OTHER CASE LAWS RELIED UPON BY THE APPELLANT WITH RESPECT TO THE ACCRUAL AND ARISAL OF INCOME IS APPLICABLE IN THE CONTEXT OF BUSINESS TRAN SACTIONS FALLING UNDER THE HEAD 'INCOME FROM BUSINESS AND PROFESSION' AND THE SAME DOES NOT APPLY TO INCOME UNDER THE HEAD 'CAPITAL GAI NS'. 4.5 ACCORDING TO SECTION 45(1) OF THE ACT, THE YEAR OF CHARGEABILITY OF CAPITAL GAINS WILL BE THE YEAR IN WHICH THE TRANSFER WITHIN THE MEANING OF ANY OF THE SUB-CLAUSES OF SEC. 2(47) TOOK PLACE. IN CASE OF SMT. LALITHA 17 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 RAMASWAMY VS ITO (2001) 75 ITO 293 (BOM), THE ASSESSEE HAD ENTERED INTO AN AGREEMENT FOR SALE WITH REGARD TO A BUNGALOW AT BANGALORE AND AS PER THE AGREEMENT THE ASSESSEE AGREED TO SELL THE IMMOVABLE PROPERTY IN CONSIDERATION OF RS. 9.60 LACS W HICH WAS TO BE RECEIVED AS PER THE SCHEDULE OF PAYMENTS DECIDED BETWE EN PARTIES. IT WAS HELD THAT WHEREAS EACH FACT TAKEN IN ISOLATION MAY NOT BE SUFFICIENT TO TAKE ONE VIEW OR THE OTHER, BUT THE TOTALITY OF THE FACTS AND CIRCUMSTANCES TAKEN INTO ACCOUNT DO ESTABLISH THAT THE POSSESSION OF THE PROPERTY WAS HANDED OVER TO THE VENDORS BEFORE 31-03- 1987, THEREFORE, CAPITAL GAINS WERE ASSESSABLE DURING THE YEAR WHEN THE A GREEMENT WAS MADE. 4.5.1 IN ADDL. CIT VS G.M. OMARKHAN (1979) 116 ITR 950 (AP) IT WAS HELD THAT TO ATTRACT THE LIABILITY TO TAX U/S 45, IT IS SUFFICIENT IF, IN THE ACCOUNTING YEAR PROFIT HAVE ARISEN OUT OF THE TRANSFE R OF CAPITAL ASSET, IN OTHER WORDS THE ASSESSEE HAD A RIGHT TO RECEIVE THE PROF ITS. ACTUAL RECEIPT OF PROFITS IS NOT A RELEVANT CONSIDERATION. WH ERE ONCE PROFIT HAVE ARISEN IN THE ACCOUNTING YEAR OUT OF THE TRANSFER OF THE CAPITAL ASSET THAT WOULD BE SUFFICIENT TO ATTRACT LIABILITY U/S 45. THIS VIEW WAS LATER AFFIRMED IN G.M. OMAR KHAN VS ADDL CIT (1992) 196 IT R 269 (SC). THE MADRAS HIGH COURT IN THE CASE OF T.V. SUNDARAM IYENGA R & SONS LTD VS CIT (1959) 37 ITR 26 (MAD) HELD THAT THE SEC. 45 DO ES NOT SPEAK OF ANY ARISING RECEIPT AT ALL. THE CRUCIAL WORD USED HERE IS ARISING. EVEN IN A CASE WHERE TRANSFER IS MADE IN A CURRENT YEAR BUT PRIC E IS TO BE PAID AT ANY FUTURE DATE DURING THE NEXT YEAR THE ASSESSEE WOULD HAVE RECEIVED A RIGHT TO RECEIVE THE PRICE IN THE YEAR OF TRANSFER. THEREFORE, PROFITS WOULD HAVE ARISEN TO THE ASSESSEE IN THE YEAR IN WHICH T RANSFER TOOK PLACE EVEN THOUGH THE PRICE WAS PAID IN A SUBSEQUENT Y EAR. 4.5.2 IN ICI INDIA VS DCIT (2002) 80 ITD 58 (CAL) (TRIB) THERE WAS A SINGLE AGREEMENT AND BY A SINGLE CONVEYANCE DEED PROP ERTY WAS TRANSFERRED BY THE ASSESSEE. THE ENTIRE TRANSFER PROCESS WA S ONE AND INDIVISIBLE IT WAS, THEREFORE, NOT POSSIBLE TO COMPREHE ND THAT A PART OF PROPERTY WAS TRANSFERRED UNDER DEEMING PROVISIONS OF SE C. 2(47)(VI) IN ONE YEAR AND BALANCE PORTION UNDER ACTUAL PROVISION OF SEC. 45 IN LATER YEAR. ALTHOUGH THE MOU PROVIDED ONLY FOR ALLOWING A LICENSE TO THE PURCHASER TO USE THE PROPERTY, THIS SHOULD BE CONSIDERED AS SUFFICIENT SITUATION INVOLVING ACTUAL HAND OVER OF THE POSSESSION OF THE PROPERTY IN RESPECT OF SUCH PARTS THEREOF WHICH HAD BEEN STIPULA TED IN THE ORIGINAL AGREEMENT. HENCE, THE PRESENT CASE COULD COM E WITHIN THE AMBIT OF 'PART PERFORMANCE' AS MENTIONED IN SEE 53A O F THE TRANSFER OF PROPERTY ACT, AND CONSEQUENTLY UNDER THE PURVIEW OF SEE 2(47)(V) OF THE ACT. THE COURT THUS UPHELD THE 'TRANSFER' BY VIR TUE OF THE EXTENDED DEFINITION OF 'TRANSFER'. 4.5.3 IN THE CASE OF CIT VS ROHTAK TEXTILE MILLS LTD (DEL) 128 ITR 195, SALE TOOK PLACE DURING THE YEAR, THE CAPITAL GAIN WA S HELD TO BE TAXABLE DURING THAT YEAR EVEN THOUGH DISPUTE ON SALE PRICE IS STILL PE NDING. IN TV. SUNDARAM IYENGAR & SONS LTD VS CIT (1959) 37 ITR 26 (MAD), CAPITAL GAIN IS ATTRACTED MOMENT THE ASSESSEE HAS ACQUIRE D THE RIGHT TO RECEIVE THE PROFITS AND IT IS NOT NECESSARY THAT THE ASSE SSEE SHOULD HAVE ACTUALLY RECEIVED THE PROFITS. IF SUBSEQUENTLY THE MON EY IS NOT ACTUALLY RECEIVED, THAT WOULD BE A CAPITAL LOSS ARISING IN THE YEAR WHEN THE MONEY BECAME IRRECOVERABLE. ACCORDING TO SECTION 48, THE INCOME CHARGEABLE UNDER THE HEAD 'CAPITAL GAINS' IS TO BE CO MPUTED BY DEDUCTING FROM THE FULL VALUE OF CONSIDERATION RECEI VED OR ACCRUING AS A RESULT OF TRANSFER OF CAPITAL ASSET, THE EXPENDITURE IN CURRED WHOLLY AND 18 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 EXCLUSIVELY IN CONNECTION WITH SUCH TRANSFER AND THE C OST OF ACQUISITION OF THE ASSET AND THE COST OF ANY IMPROVEMENT THERETO. IT IS, THEREFORE, NECESSARY TO APPRECIATE THE SIGNIFICANCE AND SCOPE OF T HE WORDS 'FULL VALUE OF CONSIDERATION' SO AS TO IDENTIFY AMOUNTS WHIC H CONSTITUTE A PART OF THE FULL VALUE OF CONSIDERATION AND THE AMOU NTS WHICH DO NOT. IN THE CASE OF CIT VS GEORGE HENDERSON & CO. LTD. (1967), 66 ITR 622 (SC), THE APEX COURT WAS OF THE VIEW THAT THE EXPRESSI ON 'FULL VALUE ON CONSIDERATION CANNOT BE CONSTRUED AS HAVING REFERENCE TO THE MARKET VALUE OF THE ASSET TRANSFERRED BUT THE EXPRESSION ONLY MEANT THE FULL VALUE OF CONSIDERATION RECEIVED BY THE TRANSFEREE IN EXCHANGE OF THE CAPITAL ASSET TRANSFERRED BY HIM. THE SUPREME COURT AL SO OBSERVED THAT IN THE CASE OF A SALE THE FULL VALUE OF CONSIDERATION IS THE FULL SALE PRICE ACTUALLY PAID. IT WAS FURTHER OF THE VIEW THAT THE E XPRESSION 'FULL VALUE' MEANS THE WHOLE PRICE WITHOUT ANY DEDUCTION, WHATSOEV ER, AND IT CANNOT REFER TO THE ADEQUACY OR INADEQUACY OF THE P RICE BARGAINED FOR. IN THE CASE OF CIT VS GILLANDERS ARBUTHNOT & CO. (197 3) 87 ITR 407 (SC) THE HON'BLE COURT OBSERVED THAT IN THE CASE OF A SALE PRICE OF AN ASSET ALL THAT ONE HAD TO SEE WAS WHAT WAS THE CONSIDERATION BARG AINED FOR. THUS THE DECISIONS MAKE IT MORE CLEAR THAT THE EXPRESSIO N 'FULL VALUE OF CONSIDERATION' THAT IS USED IN SECTION 48 IS TO THE REFE RENCE ONLY TO THE CONSIDERATION REFERRED TO IN THE SALE DEEDS AS THE SALE PRICE OF THE ASSETS WHICH HAVE BEEN TRANSFERRED. 4.5.4 IN THE CASE OF CIT VS SMT. NILOFER I. SINGH (2 009) 309 ITR 233 (DEL), IT WAS HELD THAT THE EXPRESSION 'FULL VALUE OF CONSIDERATION' THAT IS USED IN SECTION 48 DOES NOT HAVE ANY REFERENCE TO THE MARKET VALUE BUT ONLY TO THE CONSIDERATION REFERRED TO IN THE SALE DEE D AS THE SALE PRICE OF THE ASSET WHICH HAVE BEEN TRANSFERRED. THE ISSUE OF 'FUL L VALUE OF CONSIDERATION' ALSO CAME UP BEFORE THE MADRAS HIGH COU RT IN THE CASE OF VENKATESH VS CIT (2000) 243 ITR 367 (MAD), WHERE T HE ASSESSEE ENTERED INTO AN AGREEMENT TO SELL THE SHARES HELD BY H IM IN TWO COMPANIES FOR THE ABOVE MARKET PRICE. THE ASSESSING OFF ICER COMPUTED THE DIFFERENCE BETWEEN THE VALUE OF SALE PRICE AND T HE COST OF ACQUISITION AS LONG-TERM CAPITAL GAINS. THE ASSESSEE SUB MITTED THAT THE SALE PRICE DID NOT WHOLLY PERTAIN TO VALUE OF THE SHA RES HELD BY HIM BUT PART OF THE AMOUNT WAS RECEIVED AS CONSIDERATION AND R EPRESENTED TRANSFER OF CONTROLLING INTEREST IN COMPANIES. IT WAS H ELD THAT THE CONTROLLING INTEREST IS AN INCIDENCE ARISING FROM HOLD ING OF A PARTICULAR NUMBER OF SHARES IN A COMPANY AND CANNOT BE SEPARATELY ACQUIRED OR TRANSFERRED, THEREFORE, IT IS NOT A SEPARATE CAPITAL ASSET U/S 2(14). THEREFORE, THE PRICE PAID FOR THE SHARES BY THE VENDO R IS, THEREFORE, THE PRICE PAID FOR ACQUIRING THE SHARES AND THE ENTIRE CO NSIDERATION IS REQUIRED TO BE CONSIDERED FOR THE PURPOSE OF COMPUTIN G THE CAPITAL GAINS IN THE HANDS OF THE ASSESSEE. SIMILAR VIEW WAS ALSO TAKEN IN THE CASE OF SMT. P.S. VASANTHA VS CIT (2004) 186 CTR 288 ( MAD), FOLLOWING THE DECISION IN THE CASE OF VENKATESH & ORS VS CIT (CITED SUPRA). 4.6 THE APPELLANT'S CONTENTION OF THE COMPARATIVE SA LE INSTANCES TO JUSTIFY THE COST OF THE PERFORMANCE OF CAPITAL ASSET IN CLUSIVE IN THE SALES CONSIDERATION DOES NOT BECOME RELEVANT FOR THE PURPOSE S OF SALES CONSIDERATION TAKEN FOR THE PURPOSES OF CAPITAL GAINS U /S 45 OF THE ACT. THE APPELLANT HAS NOT ARTIFICIALLY DECIDED THE TOTAL CONSIDERATION FOR THE PURPOSES OF REGISTRATION. THE BUYER HAS GOT THE PROPERT Y REGISTERED AND PAID THE STAMP DUTY ON TOTAL CONSIDERATION WHICH IS STA TED BY THE APPELLANT TO INCLUDE THE COST OF CERTAIN PERFORMANCE S AND UNDER OBLIGATIONS FOR WHICH THE APPELLANT'S CONTENTION OF THE TRANSACTION HAVING TWO LIMBS DOES NOT HOLD GOOD FOR THE PURPOSES OF TAXATION OF 19 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 INCOME UNDER THE HEAD CAPITAL GAINS. THE APPELLANT HAS NOT BROUGHT ON RECORD ANY SUCH MATERIAL WHICH COULD JUSTIFY ANY SUCH VALUE TO THE ABOVE STATED PERFORMANCE OR OBLIGATIONS AS ENVISAGED IN THE SALE DEED. THE SALE DEED EVEN ENVISAGES OF TRANSFERRING FURTHER LA ND HAVING AREA OF 38 ACRES (108 - 70), BUT THE SAME HAS NOT BEEN PERF ORMED DURING THE YEAR UNDER CONSIDERATION AS THE SAME HAS NOT YET BEEN T RANSFERRED BY THE APPELLANT. THE APPELLANT'S CONTENTION OF THE PER FORMANCE OF VARIOUS OBLIGATIONS BE TREATED AS BUSINESS TRANSACTION, IT IS SEEN THAT THE APPELLANT, AS IS EVIDENT FROM MATERIAL ON RECORD HAS B EEN THE OWNER OF THE LAND FOR A SUBSTANTIAL PERIOD OF TIME AND SHOWN IT AS AN INVESTMENT AND NOT STOCK-IN-TRADE. THE MATERIAL ON RECORD AS BRO UGHT OUT DURING THE COURSE OF THE APPELLATE PROCEEDINGS PRIMA FACIE I NDICATE THAT THE PURCHASE OF LAND WAS NOT FOR THE PURPOSE OF BUSINESS AND THAT THE APPELLANT WAS ALSO NOT A DEALER IN LAND AND THE APPEL LANT HAS NOT CARRIED ON ANY BUSINESS WITH RESPECT TO LAND. THE GAIN S ARISING FROM TRANSFER OF LAND WILL BE 'CAPITAL GAINS' AND NOT BUSIN ESS INCOME SINCE THE LAND HAS BEEN SHOWN TO HAVE BEEN HELD AS INVESTMENT AND NOT STOCK-IN- TRADE. IN ANY CASE, THE AFORESAID ISSUE IS NOT RELEVANT AS THE SAID TRANSACTION OF THE PROCURING 38 ACRES OF LAND IS NOT T HE ISSUE IN THIS GROUND OF APPEAL RAISED BY THE APPELLANT. 4.7 IN VIEW OF THE ABOVE FACTS, THE ACTION OF THE A SSESSING OFFICER IN ADOPTING THE FULL VALUE OF CONSIDERATION FOR COMPUTI NG THE CAPITAL GAINS OF RS. 24,31,08,750/- AS AGAINST RS. 12,15,54,375/- SHOW N BY THE APPELLANT IS JUSTIFIED AND, THEREFORE, THE SAME IS UPHE LD AND THE GROUNDS OF APPEAL NO 2 & 3 RAISED BY THE APPELLANT ARE LIABL E TO BE DISMISSED. 27. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 28. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO T HE COPY OF THE SALE DEED WITH M/S. WAGHOLI PROPERTIES PVT. LTD., A COPY OF WHICH IS PLACED AT PAGES 50 TO 81 OF THE PAPER BOOK, DREW THE ATTENTI ON OF THE BENCH TO THE VARIOUS CLAUSES OF THE SALE DEED. REFERRING TO PAG E 11 OF THE SALE DEED THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO CLAUSE (III) OF THE SALE DEED WHICH SPECIFIES THE OBLIGATION OF THE ASSESSEE. AS PER THE SAID CLAUSE (III) THE VENDORS AND CONSENTING PARTIE S HAVE AGREED TO GET TOTAL CONTIGUOUS LAND ADMEASURING 108 ACRES (APPROXIMATEL Y) OF MOUJE WAGHOLI, TALUKA HAVELI, DIST. PUNE TO BE TRANSFERRED IN FAVO UR OF THE PURCHASER FOR A CONSIDERATION @ RS.2,51,00,000/- PER ACRE. REFERRI NG TO THE PAGE 12 OF THE SALE DEED THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO CLAUSE (V) OF THE SALE DEED ACCORDING TO WHICH T HE VENDORS AND CONSENTING PARTIES REQUIRE TIME TO FULFIL THE SAID OBLIGATIONS FOR WHICH IT WAS 20 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 AGREED BY AND BETWEEN THE PARTIES THAT THE PURCHASE RS SHALL PAY 50% OF THE TOTAL CONSIDERATION IN RESPECT OF THE SAID PROP ERTY AT THE TIME OF EXECUTION OF THE SALE DEED AND THE BALANCE 50% CON SIDERATION TO BE PAID BY THE PURCHASER WITHIN 30 DAYS UPON THE VENDORS AN D THE CONSENTING PARTIES COMPLETING IN ENTIRETY THEIR OBLIGATION AS ENUMERATED IN CLAUSE (IV) ABOVE. 29. REFERRING TO PAGE 13 OF THE SALE DEED, COPY OF WHICH IS PLACED AT PAGE 66 OF THE PAPER BOOK, THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO CLAUSE (II) ACCORDING TO WHICH THE VENDORS AND THE CONSENTING PARTIES HAVE AGREED THAT THE PURCHASER S HALL PAY THE BALANCE AMOUNT OF RS.87,90,02,125/- WITHIN 30 DAYS FROM THE VENDORS AND THE CONSENTING PARTIES COMPLETING THEIR OBLIGATIONS AS ENUMERATED IN CLAUSE (IV) ABOVE. HE ACCORDINGLY SUBMITTED THAT THE RIGHT TO RECEIVE THE ABOVE AMOUNT OF RS.87.90 CRORES WAS ONLY AFTER COMPLETION OF THE OBLIGATION. REFERRING TO PAGE 14 OF THE SALE DEED (PAGE 67 OF T HE PAPER BOOK) THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE LAST PARA ACCORDING TO WHICH THE VALUE AS PER READY RECKONER IS RS.49,38,000/- PER HECTARE ONLY. THUS THE MARKET VALUE IS RS.41 CRORE S WHEREAS THE CONSIDERATION AGREED BETWEEN THE PARTIES IS RS.1,75 ,80,04,250/- AND THE STAMP DUTY IS RS.7,03,20,170/-. HE SUBMITTED THAT THE ASSESSEE HAS DELIVERED THE POSSESSION FOR 70 ACRES AND NOT 108 A CRES. HE FURTHER SUBMITTED THAT NOBODY WILL PAY SUCH A HUGE AMOUNT F OR A SINGLE SALE OF LAND. REFERRING TO PAGES 82 TO 89 OF THE PAPER BOO K THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE VAR IOUS CLAUSE OF THE MAHARASHTRA REGIONAL AND TOWN PLANNING ACT, 1966. REFERRING TO CLAUSE 5.2 (I) OF THE SAID ACT (PAGE 85 OF THE PAPER BOOK) HE DREW THE ATTENTION OF THE BENCH TO THE FOLLOWING : 21 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 5.2 SPECIAL TOWNSHIP IN AGRICULTURE/NO DEVELOPMENT ZONE (I) DEVELOPMENT OF SPECIAL TOWNSHIPS PROJECT IN AGRIC ULTURAL/NO DEVELOPMENT ZONE, GREEN ZONE AND URBANIZABLE ZONE, CONTAINED IN THE REGIONAL PLAN SHALL BE PERMISSIBLE SUBJECT TO CONDITION S THAT 50% OF THE GROSS AREA OF THE PROJECT SHALL BE KEPT OPEN WHILE THE PROJECT OF SPECIAL TOWNSHIP SHALL BE EXECUTED ON THE REMAINING 50% LAND WITH GROSS BUILT UP AREA /FSI OF 0.50 WORKED OUT ON THE ENTIRE GROSS AREA OF THE PROJECT. FURTHER, WHILE DEVELOPING SUCH PROJECTS, IT WOULD BE OBLIGATORY ON THE PART OF THE DEVELOPER TO PROVIDE AND DEVELOP ALL THE INFRASTRUCTURE FACILITIES INCLUDING SITES REQUIRED FOR PUBLIC PURPOSES AS PER THE PRESCRIBED PLANNING NORMS. AS REGARDS 50% OF L AND WHICH IS REQUIRED TO BE KEPT OPEN, THE SAME SHALL BE MADE FREE OF ENCUMBRANCES AND NO DEVELOPMENT EXCEPT TOWN LEVEL OPEN AMENITIES SHALL BE PERMISSIBLE THEREON. 30. REFERRING TO THE AREA REQUIREMENT FOR SUBSTANTI AL TOWNSHIP FOR AREA UNDER PUNE REGIONAL PLAN THE LD. COUNSEL FOR THE AS SESSEE DREW THE ATTENTION OF THE BENCH TO THE FOLLOWING CLAUSE OF T HE SAID ACT (PAGE 88 OF THE PAPER BOOK). 1.1 AREA REQUIREMENT : ANY SUITABLE AREA HAVING SUFF ICIENTLY WIDE MEANS OF ACCESS (NOT LESS THAN 18 MT WIDE) CAN BE I DENTIFIED FOR THE PURPOSE OF DEVELOPMENT AS SPECIAL TOWNSHIP. THE AREA NOTIFIED UNDER THE SPECIAL TOWNSHIP SHALL BE ONE CONTINUOUS UNB ROKEN AND UNINTERRUPTED AND IN ANY CASE SHALL NOT BE LESS THAN 4 0HA (100 ACRES) AT ONE PLACE, WHICH SHALL NOT INCLUDE THE AREA UNDER NOTIFIED FOREST, WATER BODIES LIKE RIVER, CREEK CANAL, RESERVOIR, TRIB AL LANDS, LANDS FALLING WITHIN THE BELT OF 500 MT. FROM THE HFL OF MAJOR LA KES, LAND FALLING IN THE COMMAND AREA OF IRRIGATION PROJECTS, LAND FALLI NG WITHIN THE BELT OF 200 MT. FROM THE HISTORICAL MONUMENTS AND PLACES OF AR CHAEOLOGICAL IMPORTANCE, ARCHAEOLOGICAL MONUMENTS, HERITAGE PRECI NCTS AND PLACES, ANY RESTRICTED AREA, NOTIFIED NATIONAL PARKS, EXISTING AND PROPOSED INDUSTRIAL ZONE, GAOTHAN AREAS OR CONGESTED AREAS. HE SUBMITTED THAT THE AMOUNT RECEIVED BY THE ASSESS EE IS NOT A CONSIDERATION FOR TRANSFER OF THE ASSETS ONLY BUT I T WILL ACCRUE TO THE ASSESSEE ONLY AFTER FULFILMENT OF THE OBLIGATIONS. REFERRING TO THE COPY OF THE TAX PAYABLE FOR A.Y. 2009-10 (PAGE 99 OF THE PA PER BOOK) BY SHOWING THE SAME AS INCOME FROM CAPITAL GAIN THE LD. COUNSE L FOR THE ASSESSEE SUBMITTED THAT IF THE METHOD ADOPTED BY THE ASSESSI NG OFFICER IS CONSIDERED, THEN THE TAX PAYABLE FOR THE YEAR COMES TO RS.2,75,44,229/-. HE SUBMITTED THAT IF THE SAME IS CONSIDERED AS BUSI NESS INCOME, THEN THE 22 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 TAX PAYABLE IN A.Y. 2014-15 COMES TO RS.3,94,93,061 /-. HE SUBMITTED THAT THE ASSESSEE HAS PAID HIGHER TAX BY OFFERING THE BA LANCE AMOUNT AS BUSINESS INCOME IN A.Y. 2014-15. 31. REFERRING TO THE DECISION OF HONBLE BOMBAY HIG H COURT IN THE CASE OF CIT VS. MRS. HEMAL RAJU SHETE IN INCOME TAX APPE AL NO.2348/2013 ORDER DATED 29-03-2016 HE SUBMITTED THAT THE HONBL E HIGH COURT IN THE SAID DECISION HAS HELD THAT WHEN THE CONSIDERATION IS POSTPONED THEN THE CAPITAL GAIN HAS TO BE TAXED IN THE LATER YEAR. 32. REFERRING TO PAGE 3 OF THE PAPER BOOK NO.3 THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE MAP CONTAINING THE ACCESS ROAD. REFERRING TO PAGE 5 OF THE PAPER BOOK NO.3 H E DREW THE ATTENTION OF THE BENCH TO THE LETTER DATED 11-12-2015 BY M/S. PR OXIMA CREATIONS TO THE ASSESSEE ACCORDING TO WHICH THEY HAVE AGREED TO HAN D OVER THE AREA OF 490 SQ.MTRS OUT OF THEIR LAND BEARING S.NO.68/1B, K HARADI TO THE CONCERNED AUTHORITIES OF MUNICIPAL CORPORATION, PUNE AT THE R EQUEST OF THE ASSESSEE FOR THE TOWNSHIP PROJECT BY M/S. WAGHOLI PROPERTIES PVT. LTD. ON THE LAND SOLD BY THE ASSESSEE. REFERRING TO THE LETTER WRIT TEN BY MARVEL LANDMARKS PVT. LTD. ON 11-12-2015, COPY OF WHICH IS PLACED AT PAGE 6 OF THE PAPER BOOK, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED TH AT THEY HAVE ALSO AGREED TO HAND OVER THE PORTION OF LAND ADMEASURING 5260.94 SQ.MTRS OUT OF THEIR LAND HOLDING OF 64314.66 SQ.MTRS. TO THE C ONCERNED MUNICIPAL AUTHORITIES FOR GETTING THE ROAD EXECUTED. REFERRIN G TO THE LETTER WRITTEN BY MARVEL BHARUCHA REALTORS DATED 11-12-2015, COPY OF WHICH IS PLACED AT PAGE 7 OF THE PAPER BOOK, HE SUBMITTED THAT THEY HA VE ALSO AGREED TO HAND OVER THE AREA ADMEASURING 453.64 SQ.MTRS OUT OF THE IR LAND HOLDING OF 23150 SQ.MTRS. TO THE CONCERNED MUNICIPAL AUTHORITI ES FOR EXECUTION OF THE SAID ROAD. REFERRING TO THE LETTER ADDRESSED BY MR. BHARAT M. PARWANI (MANAGER OF HUF), MR. CHANDAN M. PARWANI (MANAGER O F HUF) AND MRS. 23 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 INDIRA M. PARWANI VIDE COMMON LETTER DATED 15-12-20 15, COPY OF WHICH IS PLACED AT PAGE 8 OF THE PAPER BOOK, HE SUBMITTED TH AT THEY HAVE ALSO AGREED TO OFFER A PART OF THEIR LAND ADMEASURING 00 .40 ARES IN FAVOUR OF WAGHOLI PROPERTIES FOR FACILITATING THEIR TOWNSHIP PROJECT. REFERRING TO PAGE 9 OF THE PAPER BOOK HE SUBMITTED THAT THE MUTATION OF THE LAND WAS DONE ON 01-04-2013. HE SUBMITTED THAT THE ASSESSEE HAS COMP LETED HIS PART OF OBLIGATION IN F.Y. 2013-13 RELEVANT TO A.Y. 2014-15 . 33. REFERRING TO THE LETTER ADDRESSED BY MR. ATUL C HORDIA, DIRECTOR OF WAGHOLI PROPERTIES PVT. LTD. TO THE DCIT ON 26-03-2 012, COPY OF WHICH IS PLACED AT PAGES 41 TO 44 OF THE PAPER BOOK NO.III H E SUBMITTED THAT MR. CHORDIA HAS REPLIED TO THE ASSESSING OFFICER IN RES PONSE TO NOTICE U/S.226(3) FOR RECOVERY OF DUES IN CASE OF THE ASSE SSEE FOR A SUM OF RS.4,66,82,600/- ACCORDING TO WHICH THE BALANCE AMO UNT OF RS.17.01 CRORES ALTHOUGH ACCRUED IS DUE AND PAYABLE ONLY ON COMPLIA NCE OF CERTAIN CONDITIONS MENTIONED IN THE AFORESAID AGREEMENT. I T HAS BEEN MENTIONED IN THE SAID LETTER THAT SINCE CERTAIN CONDITIONS AS PE R SALE DEED WERE NOT SATISFIED, THEREFORE, THE BALANCE AMOUNT OF RS.17.0 1 CRORES HAS NOT BECOME DUE AS ON DATE WITHIN THE MEANING OF SECTION 226(3) OF THE I.T. ACT. ACCORDINGLY, THEY HAVE EXPRESSED THEIR INABILITY TO PAY ANY AMOUNT AND OBJECTED TO THE SAID NOTICE U/S.226(3). 34. REFERRING TO PROVISIONS OF SECTION 48 OF THE I. T. ACT HE SUBMITTED THAT CONSIDERATION IS LINKED TO TRANSFER. THEREFORE, FOR THE PURPOSE OF CAPITAL GAIN ONLY RS.75 CRORES AND NOT WHOLE OF THE AMOUNT CAN B E CONSIDERED. HE SUBMITTED THAT IF THE ENTIRE CONSIDERATION IS BROUG HT TO TAX THEN IT AMOUNTS TO REWRITING OF THE AGREEMENT WHICH IS NOT PERMISSIBLE . FOR THE ABOVE PROPOSITION, HE RELIED ON THE DECISION OF THE HONB LE SUPREME COURT IN THE CASE OF MANGALORE GANESH BEEDI WORKS VS. DCIT REPOR TED IN 378 ITR 640 AND THE DECISION OF HONBLE BOMBAY HIGH COURT IN TH E CASE OF CITIBANK N.A. 24 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 REPORTED IN 261 ITR 570. 35. REFERRING TO DECISION OF THE HONBLE SUPREME CO URT IN THE CASE OF CIT VS. HINDUSTAN HOUSING AND LAND DEVELOPMENT TRUS T LTD. REPORTED IN 161 ITR 524 HE SUBMITTED THAT THE HONBLE SUPREME C OURT IN THE SAID DECISION HAS HELD THAT THERE IS A CLEAR DISTINCTION BETWEEN CASES WHERE THE RIGHT TO RECEIVE PAYMENT IS IN DISPUTE AND IT IS NO T A QUESTION OF MERELY QUANTIFYING THE AMOUNT TO BE RECEIVED AND CASES WHE RE THE RIGHT TO RECEIVE THE PAYMENT IS ADMITTED AND THE QUANTIFICATION ONLY OF THE AMOUNT PAYABLE IS LEFT TO BE DETERMINED IN ACCORDANCE WITH THE SET TLED OR ACCEPTED PRINCIPLES. ACCORDINGLY, THEY UPHELD THE DECISION OF HONBLE CALCUTTA HIGH COURT IN HOLDING THAT IT IS ONLY ON THE FINAL DETER MINATION OF THE AMOUNT OF COMPENSATION THAT THE RIGHT TO SUCH INCOME IN THE N ATURE OF COMPENSATION ARISES OR ACCRUES AND TILL THEN THERE IS NO LIABILI TY IN PRAESENTI IN RESPECT OF THE ADDITIONAL AMOUNT OF COMPENSATION CLAIMED BY TH E OWNER OF THE LAND. HE SUBMITTED THAT RIGHT TO RECEIVE IN THE INSTANT C ASE IS DISPUTED. THEREFORE, THE CASE OF THE ASSESSEE SQUARELY FALLS WITH THE CASE DECIDED BY THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN HOUSING AND LAND DEVELOPMENT CORPORATION (SUPRA). 36. SO FAR AS THE VARIOUS DECISIONS RELIED ON BY TH E CIT(A) ARE CONCERNED HE SUBMITTED THAT ALL THOSE DECISIONS ARE DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN AL L THOSE CASES THERE WAS RIGHT TO RECEIVE BUT THEY WERE DEFERRING THE RECEIP T OF THE PAYMENT. HOWEVER, IN THE INSTANT CASE, THE RIGHT TO RECEIVE IS CONTINGENT UPON FULFILMENT OF CERTAIN CONDITIONS. HE ACCORDINGLY S UBMITTED THAT THE ORDER OF THE CIT(A) BE SET ASIDE AND THE GROUNDS RAISED BY T HE ASSESSEE BE ALLOWED. HE ALSO RELIED ON THE FOLLOWING DECISIONS : 1. AZIENDE COLORI NAZIONALI AFFINI VS. CIT REPORTED IN 110 ITR 0145 2. CIT VS. CITIBANK N.A. REPORTED IN 261 ITR 0570 3. CIT VS. KOLHIA HIRDAGARH CO. LTD. REPORTED IN 17 ITR 0545 25 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 37. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHE R HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). REFERRING TO PA GE 14 OF THE SALE DEED (PAGE 67 OF THE PAPER BOOK) HE SUBMITTED THAT THE C ONSIDERATION AGREED BETWEEN THE PARTIES IS RS.175, 80,04,250/-. HE SUB MITTED THAT THIS IS THE VALUE OF PROPERTY AND IT HAS NOTHING TO DO WITH THE OBLIGATIONS. REFERRING TO PAGE 12 OF THE SALE DEED (PAGE 65 OF THE PAPER BOOK ) HE SUBMITTED THAT THERE IS ABSOLUTE TRANSFER OF THE SAID LAND BY THE VENDORS AND THE CONSENTING PARTIES TO THE PURCHASER. REFERRING TO PAGE 14 OF THE SALE DEED (PAGE 67 OF THE PAPER BOOK) HE SUBMITTED THAT THE VENDORS AT THE TIME OF THE EXECUTION OF THE DEED HAVE DELIVERED TO THE PUR CHASER, THE VACANT AND PEACEFUL POSSESSION OF THE SAID PROPERTY AND THE PU RCHASER HEREIN CONFIRMS HAVING RECEIVED THE SAME. 38. SO FAR AS THE CLAUSE RELATING TO THE VENDORS AN D THE CONSENTING PARTIES AGREEING THAT THE PURCHASER SHALL PAY THE B ALANCE 50% AMOUNT OF RS.8,79,02,125/- WITHIN 30 DAYS FROM THE VENDORS AN D THE CONSENTING PARTIES COMPLETING THEIR OBLIGATIONS IS CONCERNED, HE SUBMITTED THAT IT HAS NOTHING TO DO WITH THE TRANSFER. THE CLAUSE DID NO T SAY THAT IN ABSENCE OF FULFILMENT OF OBLIGATION IT WILL REVERT BACK. SO FA R AS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE PRICE IS MUCH MOR E THAN THE STAMP DUTY VALUATION IS CONCERNED, HE SUBMITTED THAT IT IS OBL IGATORY ON THE PART OF THE ASSESSEE TO FULFIL THE OBLIGATIONS CONFIRMING TO TH E RECITALS. CONSIDERING THE SIZE OF THE PLOT, THE MARKET VALUE IN THE INSTANT C ASE IS REASONABLE. FURTHER, MEETING THE OBLIGATIONS IS VERY EASY SINCE THE ASSE SSEE HAD SUFFICIENT LAND WITH HIM. HE ACCORDINGLY SUBMITTED THAT THE ASSESS ING OFFICER WAS FULLY JUSTIFIED IN BRINGING TO TAX THE WHOLE OF THE AMOUN T AND THE CIT(A) WAS ALSO JUSTIFIED IN UPHOLDING THE SAME. HE ACCORDINGLY SU BMITTED THAT THE GROUNDS RAISED BY THE ASSESSEE SHOULD BE DISMISSED. HE ALS O RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF K. P. VARGHESE VS. ITO REPORTED IN 131 ITR 597. 26 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 39. THE LD. COUNSEL FOR THE ASSESSEE IN HIS REJOIND ER SUBMITTED THAT THE DEED HAS TO BE READ AS A WHOLE. WE CANNOT IGNORE T HE VARIOUS OTHER CLAUSES OF THE SALE DEED. IF THE AGREEMENT IS READ AS A WHOLE THE AMOUNT OF RS.175, 80,04,250/- DOES NOT ACCRUE TO THE ASSES SEE. TRANSFER IS COMPLETE ONLY FOR 70 ACRES. THE CONSIDERATION RECE IVED WAS AS A RESULT OF TRANSFER AND THE RESULT OF FULFILMENT OF THE OBLIGA TIONS. HE SUBMITTED THAT THE ASSESSEE HAD DECLARED THE EXTENT OF THE AMOUNT RECE IVED DURING THE YEAR SINCE IT COULD NOT HAVE WAITED FOR 5 YEARS TO GET H IS MONEY FOR SMALL TAX SAVINGS. 40. SO FAR AS THE SUBMISSION OF THE LD. DEPARTMENTA L REPRESENTATIVE THAT THE AS PER THE CLAUSE THERE IS ABSOLUTE TRANSF ER AND THERE IS PEACEFUL AND VACANT POSSESSION IS CONCERNED HE SUBMITTED TH AT IT IS THE USUAL LANGUAGE WRITTEN IN THE SALE DEEDS. NO TIME LIMIT IS REQUIRED AND IT IS CONTINGENT UPON FULFILMENT OF THE OBLIGATIONS. SO FAR AS THE DECISION RELIED ON BY THE LD. DEPARTMENTAL REPRESENTATIVE IN THE CA SE OF K.P. VARGHESE REPORTED IN 131 ITR 597 IS CONCERNED HE SUBMITTED T HAT THE SAME IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE AND IS DISTINGUISHABLE SINCE IN THE INSTANT CASE THE RIGHT TO RECEIVE HAS NOT BEEN POSTPONED. IT IS NOT DUE, THEREFORE, THE INCOME DOES NOT ACCRUE. 41. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAP ER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIO US DECISIONS CITED BEFORE US. WE FIND THE ASSESSEE DURING THE YEAR UN DER CONSIDERATION HAS SOLD A PLOT OF LAND ADMEASURING ABOUT 70 ACRES TO W AGHOLI PROPERTIES PVT. LTD. ALONG WITH VARIOUS CO-OWNERS. THE PLOT OF THE LAND SITUATED AT GUT NOS. 1277 AND 1278 AT VILLAGE WAGHOLI, DIST, PUNE WAS SO LD VIDE SALE DEED DATED 02-05-2008 WHICH WAS REGISTERED IN THE OFFICE OF THE SUB-REGISTRAR, HAVELI-19. AS PER THE CLAUSE (III) OF THE SALE DEE D (PAGE 11 OF THE SALE 27 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 DEED) THE CONSIDERATION FOR THE SALE WAS RS.2,51,00 ,000/- PER ACRE. THE TOTAL CONSIDERATION OF THE LAND ADMEASURING ABOUT 7 0 ACRES WAS RS.175,80,04,250/-. OUT OF THE TOTAL SALE CONSIDE RATION PAYABLE THE BUYER HAS PAID 50% OF CONSIDERATION AT THE TIME OF EXECUT ION OF THE SALE DEED, I.E. AN AMOUNT OF RS.87,90,02,125/-. THE ASSESSEES SHA RE IN THE TOTAL SALE CONSIDERATION WAS RS.24,31,08,750/-. HOWEVER, THE ASSESSEE HAD WORKED OUT THE CAPITAL GAIN BY CONSIDERING THE SALE CONSID ERATION AT RS.12,15,54,375/- BEING THE AMOUNT RECEIVED BY THE ASSESSEE AT THE TIME OF EXECUTION OF THE SAID AGREEMENT. WE FIND THE AS SESSING OFFICER COMPUTED THE CAPITAL GAIN ON SALE OF LAND BY ADOPTI NG THE FULL VALUE OF SALE CONSIDERATION AT RS.24,31,08,750/-. HE ACCORDINGLY DETERMINED LONG TERM CAPITAL GAIN ON ACCOUNT OF SALE OF LAND AT WAGHOLI AT RS.24,11,76,938/- WHICH HAS BEEN UPHELD BY THE CIT(A). THE REASONING OF THE CIT(A) IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER HAS A LREADY BEEN REPRODUCED IN THE PRECEDING PARAGRAPHS. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT ASSESSEE HAS RECEIVED ONLY 50% OF THE AMOUNT AND THE BALANCE 50% AMOUNT WILL BE RECEIVED ONLY ON COMPLET ION OF CERTAIN OBLIGATIONS. SINCE THE OBLIGATIONS WERE NOT CARRIED OUT DURING THE IMPUGNED ASSESSMENT YEAR, THEREFORE, THE RIGHT TO RECEIVE AL THOUGH ACCRUED HAS NOT BECOME DUE. ACCORDING TO HIM IF A PART OF THE CONS IDERATION IS POSTPONED DUE TO NON-FULFILMENT OF CERTAIN CONDITIONS, THEN T HE CAPITAL GAIN HAS TO BE TAXED IN THE LATER YEAR, I.E. IN THE YEAR IN WHICH SUCH AMOUNT IS RECEIVED AND THE ENTIRE AMOUNT CANNOT BE BROUGHT TO TAX IN THE Y EAR OF THE TRANSFER. 42. WE FIND SOME FORCE IN THE ABOVE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE. WE FIND CLAUSE (III TO V) OF THE SALE DE ED (PAGE 64 TO 66 OF THE PAPER BOOK AND PAGE 11 TO 13 OF THE SALE DEED) READ AS UNDER : III. THE PURCHASER HAS INFORMED THE PARTIES TO THIS AG REEMENT THAT THEY INTEND TO ACQUIRE THE SAID PROPERTY MORE PARTIC ULARLY DESCRIBED IN SCHEDULE V HEREUNDER WRITTEN FOR THE PURPOSE OF DEVE LOPMENT OF A SPECIAL TOWNSHIP, PROJECT IN ACCORDANCE WITH THE REG ULATIONS FRAMED 28 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 BY THE DEVELOPMENT OF SPECIAL TOWNSHIP BY THE GOVERN MENT UNDER THE PROVISIONS OF THE MAHARASHTRA REGIONAL AND TOWN PLANNI NG ACT, 1966 FOR WHICH PURPOSE THE PURCHASER ARE REQUIRED TO ACQUI RE LAND ADMEASURING A MINIMUM AREA OF 100 ACRES. THE VENDORS AND CONSENTING PARTIES HAVE AGREED TO GET TOTAL CONTIGUOU S LAND ADMEASURING 108 ACRES (APPROXIMATELY) OF MOUJE WAHOLI , TALUKA HAVELI DISTRICT PUNE TRANSFERRED IN FAVOUR OF THE PUR CHASER AT AND FOR THE CONSIDERATION CALCULATED AT THE RATE OF RS.2,51,0 0,000/- PER ACRE (RS.6275/P- PER SQ.MT.) OF LAND AVAILABLE AT SITE ON M EASUREMENT. AS PART OF THE SAID TRANSACTION AND RELYING UPON THE ASSU RANCE OF THE VENDORS THAT THEY SHALL GET CONVEYED REMAINING LAND O UT OF THE SAID TOTAL CONTIGUOUS AREA OF 108 ACRES (APPROXIMATELY), T HE PURCHASER HAS ACCORDINGLY AGREED TO PURCHASE THE SAID PROPERTY MORE PARTICULARLY DESCRIBED IN SCHEDULE V WRITTEN HEREUNDER AND ADMEASU RING 2,80,160 SQ.MTRS., AT AND FOR THE TOTAL CONSIDERATION OF RS.175, 80,04,250/- (RUPEES ONE HUNDRED AND SEVENTY FIVE CRORE EIGHTY LAK H FOUR THOUSAND TWO HUNDRED AND FIFTY ONLY). OUT OF THE SAID TOTAL CONSIDERATION, RS.87,90,02,125/- (EIGHTY SEVEN CRORE NINETY LAKHS TWO THOUSAND ONE HUNDRED AND TWENTY FIVE ONLY) IS TO BE PAID TO THE V ENDORS AND THE CONSENTING PARTIES ON THE EXECUTION OF THIS SALE DEED. IV. THE VENDORS AND THE CONSENTING PARTIES ARE AWARE THAT THE PURCHASER HAS PURCHASED THE SAID PROPERTY FOR DEVELOPME NT OF A SPECIAL TOWNSHIP SCHEME AND HAVE THEREBY JOINTLY AND SEVERALLY REPRESENTED TO, THE PURCHASER TO COMPLETE THE FOLLOWI NG OBLIGATIONS IN ENTIRETY AT THEIR OWN COSTS AND EXPENSE, WHICH OBLIGA TIONS FORM THE ESSENCE OF THIS CONTRACT (THE SAID OBLIGATIONS). A. TO EXECUTE SALE DEEDS IN FAVOUR OF THE PURCHASER H EREIN FOR A TOTAL CONTIGUOUS LAND AREA OF 108 ACRES (APPROX IMATELY); B. TO FURNISH DEMARCATION CERTIFICATES ISSUED BY THE CONCERNED AUTHORITY OF LAND RECORDS ALONG WITH A SEP ARATE 7/12 EXTRACT IN FAVOUR OF THE PURCHASER FOR THE ENTIRE LA ND ADMEASURING 108 ACRES (APPROXIMATELY INCLUDING THE SA ID PROPERTY. C. TO DELIVER AT THEIR OWN COSTS AND EXPENSES CLEAR AND MARKETABLE TITLE TO THE ENTIRE CONTIGUOUS LAND ADMEA SURING 108 ACRES (APPROXIMATELY) FOR THE DEVELOPMENT OF SPECIAL TOWNSHIP PROJECT IN ACCORDANCE WITH THE REGULATIONS FRAMED B Y THE DEVELOPMENT OF SPECIAL TOWNSHIP BY THE GOVERNMENT UN DER THE PROVISIONS OF THE MAHARASHTRA REGIONAL AND TOWNSHIP ACT 1966 AND ALSO AT THEIR OWN COSTS AND EXPENSE TO FENCE THE EN TIRE CONTIGUOUS LAND AREA OF 108 ACRES FOR THE PURCHASER HE REIN; D. TO DELIVER A LEGAL AND PRACTICAL 24 METER ACCESS R OAD TO THE CONTIGUOUS 108 ACRES LAND; E. TO OBTAIN CONSENT OF CO-OWNERS OF BALANCE PLOTS, S O AS TO ENABLE THE PURCHASER TO OBTAIN ALL OTHER PERMISSIONS AS WOULD BE REQUIRED FOR SMOOTH IMPLEMENTATION OF THE SPECIAL TOWNSHIP PROJECT. 29 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 F. DELIVERY OF ALL ORIGINAL TITLE DOCUMENTS, REVENUE RECORDS AND OTHER RELEVANT DOCUMENTS TO THE SATISFACTION OF TH E PURCHASER HEREIN RELATING TO THE ENTIRE CONTIGUOUS LA ND OF 108 ACRES (APPROXIMATELY) INCLUDING THE LAND IN THE SCHED ULE HEREIN; G. TO RECORD OCCUPANT CLASS I ON 7/12 EXTRACT OF GAT NO.1277 (OLD 2263) IN ACCORDANCE WITH MUTATION ENTR Y NO.1021 DATED 10.12.2003. H. TO REPAY AND OBTAIN NO DUES CERTIFICATE FROM RELE VANT AUTHORITIES WITH RESPECT OF THE LOAN AMOUNT OWED BY S HRI BALU DAULATI AVHALI AND SOU. ASHA BALASAHEB AVHALI TO THE WAGHOLI VKS CREDIT SOCIETY AND TO GET THE CHARGE CREATED TH EREON VIDE MUTATION ENTRY NOS.6205 AND 6206 DATED 15.04.1998 RE MOVED. V. AS THE VENDORS AND THE CONSENTING PARTIES REQUIRE TI ME TO FULFIL THE SAID OBLIGATIONS, IT IS AGREED BY AND BETWEEN THE PARTIES THAT THE PURCHASER SHALL PAY 50 (FIFTY) PER CENT OF THE TOTAL CONSIDERATION AS MORE SPECIFICALLY DESCRIBED IN SCHEDULE VI HEREUNDER IN RESPECT OF THE SAID PROPERTY AT THE TIME OF EXECUTION OF THIS SALE D EED AND THE BALANCE 50 (FIFTY) PER CENT CONSIDERATION TO BE PAID BY THE PURCHASER WITHIN 30 DAYS UPON THE VENDORS AND THE CONSENTING PARTIES COMPLY ING IN ENTIRETY THEIR OBLIGATIONS AS ENUMERATED IN CLAUSE IV HEREINABOVE. UPON RECEIPT OF BALANCE CONSIDERATION THE VENDORS AND THE CONSENTING PARTIES SHALL SIMULTANEOUSLY, EXECUTE A PROPER RECEIPT ACKNOWLEDGING THE ENTIRE PRICE AND CONSIDERATION. UPON THE VENDOR S AND CONSENTING PARTIES SUCCESSFULLY COMPLETING THE EXECUTION AND REGIST RATION OF THE SALE DEEDS WITH RESPECT TO 108 ACRES IN FAVOUR OF THE PURCHASER HEREIN, THE PURCHASER SHALL DELIVER TO THE VENDOR A BANK GUAR ANTEE FOR THE BALANCE 50% CONSIDERATION, UPON COMPLIANCE OF THE OB LIGATIONS IN ENTIRETY AS ENUMERATED IN CLAUSE IV HEREINABOVE BY TH E VENDORS AND CONSENTING PARTIES. NOW THEREFORE THIS DEED WITNESSES THAT IN CONSIDERAT ION OF SAID SALE, CONVEYANCE AND OTHERWISE ABSOLUTE TRANSFER OF THE SAID LAND BY THE VENDORS AND THE CONSENTING PARTIES TO THE PURCHASER , THE PURCHASER, IS PAID TO THE VENDORS AND THE CONSENTING P ARTIES AND THE VENDORS AND CONSENTING PARTIES ACCORDINGLY ACCEPTED FR OM THE PURCHASER, THE SAID CONSIDERATION OF RS.175,80,04,250/- (RUPEES ONE HUNDRED AND SEVENTY FIVE CRORE EIGHTY LAKH FOUR THOU SAND TWO HUNDRED AND FIFTY ONLY) AS MORE PARTICULARLY DESCRIBED IN SCH EDULE VI HEREUNDER. FURTHER, THE VENDORS AND THE CONSENTING PARTIES HAVE A GREED THAT THE PURCHASER SHALL PAY THE BALANCE 50% (FIFTY PERCENT) A MOUNT OF RS.87,90,02,125/- (EIGHTY SEVEN CRORE NINETY LAKHS TWO THOUSAND ONE HUNDRED AND TWENTY FIVE ONLY) WITHIN 30 DAYS FROM TH E VENDORS AND THE CONSENTING PARTIES COMPLETING THEIR OBLIGATIONS A S ENUMERATED IN CLAUSE IV HEREINABOVE. 43. FROM THE ABOVE, IT IS CLEAR THAT THE SALE DEED IS COMPLETE ONLY AFTER FULFILMENT OF THE OBLIGATIONS THAT HAS BEEN UNDERTA KEN BY THE ASSESSEE. WE FIND SOMEWHAT IDENTICAL ISSUE HAD COME UP BEFORE TH E HONBLE BOMBAY 30 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 HIGH COURT IN THE CASE OF HEMAL RAJU SHETE (SUPRA). IN THAT CASE THE ASSESSEE FILED HER RETURN DECLARING TOTAL INCOME OF RS.11,68,470/-. SHE HAD SHOWN THE LONG TERM CAPITAL GAIN OF RS.42,38,674/- ARISING OUT OF THE SALE OF 75,000 SHARES OF M/S. UNISOL INFRASERVICES LTD. (M/ S. UNISOL) TO ONE M/S. RADHA KRISHNA HOSPITALITY SERVICES PVT. LTD. IN TER MS OF AN AGREEMENT DATED 25-01-2006. THE ASSESSING OFFICER ON PERUSAL OF THE AGREEMENT DATED 25-01-2006 NOTED THAT THE RESPONDENT ASSESSEE AS WELL AS OTHER CO- OWNERS (SHETE FAMILY) OF M/S. UNISOL WERE TO RECEIV E IN AGGREGATE A SUM OF RS.20 CRORES IN THE SUBJECT ASSESSMENT YEAR AND PRO CEEDED TO TAX THE ENTIRE AMOUNT OF RS.20 CRORES IN THE SUBJECT ASSESS MENT YEAR IN THE HANDS OF ALL CO-OWNERS OF SHARES. THIS RESULTED IN THE R ESPONDENT ASSESSEE BEING TAXED ON HER SHARE OF CAPITAL GAIN AT RS.4.48 CRORE S AFTER AVAILING EXEMPTION U/S.54EC OF THE ACT. THUS, THE ASSESSING OFFICER COMPUTED THE INCOME AT RS.4.60 CRORES. IN APPEAL CIT(A) DELETED THE ADDITION OF RS.4.48 CRORES MADE BY THE ASSESSING OFFICER ON THE GROUND THAT IT IS NOTIONAL. HE NOTED THAT IN TERMS OF THE AGREEMENT THE RESPONDENT ASSESSEE ALONGWITH OTHER CO-OWNERS OF SHARES OF M/S. UNISOL WERE TO RE CEIVE RS.2.70 CRORES AS INITIAL CONSIDERATION. THE RESPONDENT ASSESSEE HAD OFFERED HER SHARE OUT OF RS.2.70 CRORES RECEIVED AS INITIAL CONSIDERATION TO TAX IN HER RETURN OF INCOME FOR THE SAID ASSESSMENT YEAR. THE CIT(A) FU RTHER OBSERVED THAT THE AGREEMENT DATED 25-01-2006 ALSO PROVIDED FOR DEFERR ED CONSIDERATION WHICH WAS CAPPED AT RS.20 CRORES WHICH HAD TO BE P AID IN TERMS OF FORMULA PRESCRIBED IN THE AGREEMENT DATED 25-01-200 6. WORKING OUT OF THE FORMULA LED TO A SITUATION WHERE NO AMOUNT ON ACCOU NT OF DEFERRED CONSIDERATION FOR THE SALE OF SHARES WAS RECEIVABLE BY THE RESPONDENT ASSESSEE IN THE IMMEDIATE SUCCEEDING ASSESSMENT YEA R, I.E. A.Y. 2007-08. THE CIT(A) CONCLUDED THAT NO AMOUNT OF THE DEFERRED CONSIDERATION CAN BE BROUGHT TO TAX IN THE SAID ASSESSMENT YEAR EITHER O N RECEIPT BASIS OR ON ACCRUAL BASIS. THUS, HE DELETED THE ADDITION. THE REVENUE PREFERRED AN APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL UPHELD TH E ACTION OF THE 31 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 ASSESSING OFFICER HOLDING THAT AS THERE IS NO CERTA INTY OF RECEIVING ANY AMOUNT AS DEFERRED CONSIDERATION, THE BRINGING TO TAX THE MAXIMUM AMOUNT OF RS.20 CRORES PROVIDED AS A CAP ON THE CO NSIDERATION IN THE AGREEMENT DATED 25-01-2006 IS NOT TENABLE. THE TRI BUNAL FURTHER HELD THAT WHAT HAS TO BE BROUGHT TO TAX IS THE AMOUNT WHICH H AS BEEN RECEIVED AND/ OR ACCRUED TO THE ASSESSEE AND NOT ANY NOTIONAL OR HYPOTHETICAL INCOME AS THE REVENUE IS SEEKING TO TAX THE RESPONDENT ASSESS EE IN THE SAID ASSESSMENT YEAR 2006-07. THE HONBLE HIGH COURT BE FORE DECIDING THE ISSUE REFERRED TO THE VARIOUS CLAUSES OF THE SAID A GREEMENT AND THEREAFTER DISMISSED THE APPEAL FILED BY THE REVENUE. THE REL EVANT OBSERVATION OF HONBLE HIGH COURT FORM PARA 7 ONWARDS READ AS UNDE R : 7. MR.PINTO, LEARNED COUNSEL FOR THE REVENUE URGE D THAT IN TERMS OF SECTION 45(1) OF THE ACT THAT TRANSFER OF CAPITAL ASSET WOULD ATTRACT THE CAPITAL GAINS TAX. IT IS FURTHER SUBMITTED THAT THE AM OUNT TO BE TAXED UNDER SECTION 45(1) IS NOT DEPENDENT UPON THE RECEIPT OF THE CONSIDERATION. IN SUPPORT OF THE ABOVE HE INVITES OUR ATTENTION TO SECTION 45(1)(A) AND SECTION 45(5) OF THE ACT WHICH IN CONTRAST BRINGS TO TAX CAPITAL GAINS ON AMOUNT RECEIVED. IN THE ABOV E VIEW, IT IS HIS SUBMISSION THAT THE ASSESSING OFFICER WAS JUSTIFIED IN BRI NGING TO TAX ENTIRE AMOUNT OF THE RESPONDENT-ASSESSEE'S SHARE IN RS.20 CRORES REFERRED TO IN THE AGREEMENT DATED 25TH JANUARY, 20 06 AS MAXIMUM AMOUNT THAT COULD BE RECEIVED ON THE SALE OF SHARES IN M/S. UNISOL BY ITS CO-OWNERS FROM M/S. RKHS. 8. IN THE PRESENT CASE, FROM THE READING OF THE ABO VE CLAUSES OF THE AGREEMENT THE DEFERRED CONSIDERATION IS PAYABLE OVER A PERIOD OF FOUR YEARS I.E. 2006-07, 2007-08, 2008-09 AND 2009-10. FU RTHER THE FORMULA PRESCRIBED IN THE AGREEMENT ITSELF MAKES IT CLEAR THAT THE DEFERRED CONSIDERATION TO BE RECEIVED BY THE RESPONDENT-ASSESSEE I N THE FOUR YEARS WOULD BE DEPENDENT UPON THE PROFITS MADE BY M/S. UNISOL IN EACH OF THE YEARS. THUS IN CASE M/S. UNISOL DOES NOT MA KE NET PROFIT IN TERMS OF THE FORMULA FOR THE YEAR UNDER CONSIDERATIO N FOR PAYMENT OF DEFERRED CONSIDERATION THEN NO AMOUNT WOULD BE PAYAB LE TO THE RESPONDENT-ASSESSEE AS DEFERRED CONSIDERATION. THE CONSIDER ATION OF RS.20 CRORES IS NOT AN ASSURED CONSIDERATION TO BE RECEIV ED BY THE SHETE FAMILY. IT IS ONLY THE MAXIMUM THAT COULD BE RECEIVE D. THEREFORE IT IS NOT A CASE WHERE ANY CONSIDERATION OUT OF RS.20 CRORES OR PART THEREOF (AFTER REDUCING RS.2.70 CRORES) HAS BEEN RECEIVED OR H AS ACCRUED TO THE RESPONDENT-ASSESSEE. AS OBSERVED BY THE APEX COURT IN MORV I INDUSTRIES LTD. VS. CIT (1971) 82 ITR 835. THE INCOME CAN BE SAID TO ACCRUE WHEN IT BECOMES DUE.... THE MOMENT THE INCOME ACCRUES, THE ASSESSEE GETS VESTED RIGHT TO CLAIM THAT AMOUNT, EVEN THO UGH NOT IMMEDIATELY. IN FACT THE APPLICATION OF FORMULA IN THE AGREEMENT DATED 25TH JANUARY, 2006 ITSELF MAKES THE AMOUNT WHICH IS RE CEIVABLE AS DEFERRED CONSIDERATION CONTINGENT UPON THE PROFITS OF M/S.UNISOL AND NOT AN ASCERTAINED AMOUNT. THUS IN THE SUBJECT ASSESSMENT YEAR NO 32 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 RIGHT TO CLAIM ANY PARTICULAR AMOUNT GETS VESTED IN T HE HANDS OF THE RESPONDENT-ASSESSEE. THEREFORE, ENTIRE AMOUNT OF RS.20 CR ORES WHICH IS SOUGHT TO BE TAXED BY THE ASSESSING OFFICER IS NOT THE AM OUNT WHICH HAS ACCRUED TO THE RESPONDENT-ASSESSEE. THE TEST OF ACCRUAL IS WHETHER THERE IS A RIGHT TO RECEIVE THE AMOUNT THOUGH LATER AND SUCH RIGHT IS LEGALLY ENFORCEABLE. IN FACT AS OBSERVED BY THE SUPRE ME COURT IN E.D. SASSOON & CO. LTD. VS. CIT (1954) 26 ITR 27 IT IS CLEA R THEREFORE THAT INCOME MAY ACCRUE TO AN ASSESEE WITHOUT THE ACTUAL RE CEIPT OF THE SAME. IF THE ASSESSEE ACQUIRES A RIGHT TO RECEIVE THE INC OME, THE INCOME CAN BE SAID TO HAVE ACCRUED TO HIM THOUGH IT MAY BE RECEIVED LATER ON ITS BEING ASCERTAINED. THE BASIC CONCEPTION IS THAT HE MUST HAVE ACQUIRED A RIGHT TO RECEIVE THE INCOME. THERE MUST B E A DEBT OWED TO HIM BY SOMEBODY. THERE MUST BE AS IS OTHERWISE EXPRESSED D EBITUM IN PRESENTI, SOLVENDUM IN FUTURO . . .. IN THIS CASE A LL THE CO-OWNERS OF THE SHARES OF M/S.UNISOL HAVE NO RIGHT IN THE SUBJECT ASSE SSMENT YEAR TO RECEIVE RS.20 CRORES BUT THAT IS THE MAXIMUM WHICH COU LD BE RECEIVED BY THEM. THIS AMOUNT WHICH COULD BE RECEIVED AS DEFER RED CONSIDERATION IS DEPENDENT/CONTINGENT UPON CERTAIN UN CERTAIN EVENTS, THEREFORE, IT CANNOT BE SAID TO HAVE ACCRUED TO THE RESPONDENT-ASSESSEE. THE TRIBUNAL IN THE IMPUGNED ORDER HAS CORRECTLY HEL D THAT WHAT HAS TO BE TAXED IS THE AMOUNT RECEIVED OR ACCRUED AND NOT A NY NOTIONAL OR HYPOTHETICAL INCOME. AS OBSERVED BY THE APEX COURT IN COMMISSIONER OF INCOME-TAX VS. M/S. SHOORJI VALLABDAS AND CO. (1962 ) 46 ITR 144 INCOME-TAX IS A LEVY ON INCOME. NO DOUBT, THE INCOM E-TAX ACT TAKES INTO ACCOUNT TWO POINTS OF TIME AT WHICH LIABILITY T O TAX IS ATTRACTED, VIZ., THE ACCRUAL OF ITS INCOME OR ITS RECEIPT; BUT THE SUBST ANCE OF THE MATTER IS INCOME, IF INCOME DOES NOT RESULT, THERE CANNOT BE A TAX, EVEN THOUGH IN BOOK-KEEPING AN ENTRY IS MADE ABOUT A HYPOTHETICA L INCOME, WHICH DOES NOT MATERIALIZE. IN THIS CASE RS.20 CRORES CAP IN THE AGREEMENT IS NOT INCOME IN THE SUBJECT ASSESSMENT YEAR. IT HAS BEEN OB SERVED BY THE APEX COURT IN THE CASE OF K.P. VARGHESE VS. INCOME-TAX OFFICER, ERNAKULAM & ANR. 181 ITR PAGE 597 THAT ONE HAS TO RE AD CAPITAL GAIN PROVISION ALONG WITH COMPUTATION PROVISION AND THE STA RTING POINT OF THE COMPUTATION IS THE FULL VALUE OF THE CONSIDERATI ON RECEIVED OR ACCRUING. IN THIS CASE THE AMOUNT OF RS.20 CRORES IS NE ITHER RECEIVED NOR IT HAS ACCRUED TO THE RESPONDENT-ASSESSEE DURING THE SUBJECT ASSESSMENT YEAR. WE ARE INFORMED THAT FOR THE SUBSEQUENT ASSESSMENT YEAR (SAVE ASSESSMENT YEAR 2007-08 FOR WHICH THERE IS NO DEFERRED CONSIDERATION ON APPLICATION OF FORMULA), THE ASSESSEE H AS OFFERED TO TAX THE AMOUNTS WHICH HAVE BEEN RECEIVED ON THE APPL ICATION OF FORMULA PROVIDED IN THE AGREEMENT DATED 25TH JANUAR Y, 2006 PERTAINING TO THE TRANSFER OF SHARES. 9. THE CONTENTION OF THE REVENUE THAT THE IMPUGNED ORDER IS SEEKING TO TAX THE AMOUNT ON RECEIPT BASIS BY NOT HAVI NG BROUGHT IT TO TAX IN THE SUBJECT ASSESSMENT YEAR, IS NOT CORRECT. THI S FOR THE REASON, THAT THE AMOUNTS TO BE RECEIVED AS DEFERRED CONSIDERA TION UNDER THE AGREEMENT COULD NOT BE SUBJECTED TO TAX IN THE ASSESSMEN T YEAR 2006- 07 AS THE SAME HAS NOT ACCRUED DURING THE YEAR. AS POIN TED OUT ABOVE, ACCRUAL WOULD BE A RIGHT TO RECEIVE THE AMOUNT AND THE RESPONDENT- ASSESSEE ALONGWITH ITS CO-OWNERS HAVE NOT UNDER THE AGRE EMENT DATED 25TH JANUARY, 2006 OBTAINED A RIGHT TO RECEIVE RS.20 CRORES OR ANY SPECIFIED PART THEREOF IN THE SUBJECT ASSESSMENT YEAR. 33 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 10. IN THE ABOVE VIEW THERE COULD BE NO OCCASION TO BRING THE MAXIMUM AMOUNT OF RS. 20 CRORES, WHICH COULD BE RECE IVED AS DEFERRED CONSIDERATION TO TAX IN THE SUBJECT ASSESSMENT YEAR AS IT HAD NOT ACCRUED TO THE RESPONDENT-ASSESSEE. 11. WE FIND THAT BOTH THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THE TRIBUNAL HAVE IN VIEW OF THE CLEAR CLAUSES OF AGREEMENT DATED 25TH JANUARY, 2006 HAVE IN THE FACTS OF THE PRESENT C ASE CORRECTLY HELD THAT THE RESPONDENT-ASSESSEE AND THE CO-OWNERS OF THE SHA RES DID NOT HAVE A RIGHT TO RECEIVE RS.20 CRORES IN THE SUBJECT ASSE SSMENT YEAR. 12. IN THE ABOVE VIEW, IN THE PRESENT FACTS THE QUEST ION OF LAW AS FRAMED DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW. ACCORDINGLY, APPEAL IS DISMISSED. NO ORDER AS TO COSTS. 44. WE FIND THE HONBLE SUPREME COURT IN THE CASE O F CIT VS. HINDUSTAN HOUSING AND LAND DEVELOPMENT TRUST LTD. HAS OBSERVE D AS UNDER : THE QUESTION RAISED IN THIS APPEAL IS LIMITED TO THE POINT WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE REVENUE CA N CLAIM THAT THE SUM OF RS. 7,24,914 PAYABLE TO THE ASSESSEE AS COMPENSATIO N CAN BE SAID TO HAVE ACCRUED TO IT AS INCOME DURING THE PREVI OUS YEAR ENDED MARCH 31, 1956, RELEVANT TO THE ASSESSMENT YEAR 1956-57 . AS LONG AGO AS E. D. SASSOON & CO. V. CIT (1954] 26 ITR 27 (SC), T HIS COURT CONSIDERED THE QUESTION AS TO THE POINT AT WHICH INCOM E COULD BE SAID TO ACCRUE OR ARISE TO AN ASSES SEE FOR THE PURPOSE OF THE I NDIAN INCOME-TAX ACT. IN THE MAJORITY JUDGMENT DELIVERED BY N. H. BH AGWATI J., IT WAS EXPLAINED THAT THE WORDS ' ARISING OR ACCRUING ' DESCR IBE A RIGHT TO RECEIVE PROFITS, AND THAT THERE MUST BE A DEBT OWED B Y SOMEBODY. ' UNLESS AND UNTIL THERE IS CREATED IN FAVOUR OF THE ASSESSE E A DEBT DUE BY SOMEBODY ', IT WAS OBSERVED, 'IT CANNOT BE SAID THAT H E HAS ACQUIRED A RIGHT TO RECEIVE THE INCOME OR THE INCOME HAS ACCRU ED TO HIM '. IN THE PRESENT CASE, ALTHOUGH THE AWARD WAS MADE BY THE ARBIT RATOR ON JULY 29, 1955, ENHANCING THE AMOUNT OF COMPENSATION PAYABLE T O THE ASSESSEE, THE ENTIRE AMOUNT WAS IN DISPUTE IN THE APPEAL FILED BY THE STATE GOVERNMENT. INDEED, THE DISPUTE WAS REGARDED BY THE C OURT AS REAL AND SUBSTANTIAL, BECAUSE THE ASSESSEE WAS NOT PERMITTED TO WITH DRAW THE SUM OF RS. 7,36,691 DEPOSITED BY THE STATE GOVERNMENT ON APRIL 25, 1956, WITHOUT FURNISHING A SECURITY BOND FOR REFUNDIN G THE AMOUNT IN THE EVENT OF THE APPEAL BEING ALLOWED. THERE WAS NO ABSOLUTE RIGHT TO RECEIVE THE AMOUNT AT THAT STAGE. IF THE APPEAL WAS A LLOWED IN ITS ENTIRETY, THE RIGHT TO PAYMENT OF THE ENHANCED COMP ENSATION WOULD HAVE FALLEN ALTOGETHER. THIS IS A CASE WHICH MUST BE DI STINGUISHED FROM THAT DECIDED BY THIS COURT IN KEDARNATH JUTE MFG. CO . LTD. V. CIT [1971] 82 ITR 363 (SC), WHERE THE LIABILITY TO SALES TAX ARO SE IMMEDIATELY ON A DEALER EFFECTING SALES WHICH WERE SUBJECT TO SALES TAX A ND WHAT REMAINED TO BE DONE WAS A MERE QUANTIFICATION OF THA T LIABILITY. THE CASE COMPARES RATHER WITH CIT V. JAI PRAKASH OM PARKASH CO. LTD. [1961] 41 ITR 718 (PUNJ). THE VERY FOUNDATION OF THE CLAIM MA DE BY THE ASSESSEE WAS IN SERIOUS JEOPARDY AND NOTHING WOULD BE DUE IF TH E APPEAL WAS DECIDED AGAINST THE ASSESSEE. OUR ATTENTION HAS BEEN DRA WN BY THE REVENUE TO POPE THE KING MATCH FACTORY V. CIT [1963 ] 50 ITR 495 (MAD). THAT CASE, HOWEVER, PROCEEDED ON THE BASIS THAT EXCISE DUTY WAS PAYABLE AND ITS QUANTIFICATION ALONE REMAINED TO BE DECIDED IN THE APPEAL. WE MAY POINT OUT THAT THE ANDHRA PRADESH HIG H COURT, DEALING 34 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 WITH THE TAXABILITY OF COMPENSATION RECEIVED UNDER T HE LAND ACQUISITION ACT IN KHAN BAHADUR AHMED ALLADIN & SONS V. CIT [1969] 74 ITR 651 (AP), HELD THAT WHEN LAND WAS TAKEN OVER BY THE GOVERNMENT, THE RIGHT OF THE OWNER TO COMPENSATION WAS AN INCHOAT E RIGHT UNTIL THE COMPENSATION HAD BEEN ACTUALLY DETERMINED AND HAD BE COME PAYABLE. IT WAS OBSERVED THAT THE ENHANCED COMPENSATION ACCRUED TO AN ASSESSEE ONLY WHEN THE COURT ACCEPTED THE CLAIM AND NOT WHEN THE LAND WAS TAKEN OVER BY THE GOVERNMENT. EXAMINING THE QUESTION WHETHER INCOME COULD BE SAID TO HAVE ACCRUED TO THE ASSESSEE ON THE DAT E WHEN POSSESSION OF THE LAND WAS TAKEN BY THE GOVERNMENT FOR T HE PURPOSE OF ASSESSMENT TO TAX IN THE YEAR OF ASSESSMENT, P. JAGANMOHAN REDDY C.J., SPEAKING FOR THE COURT, SAID (PP. 657, 658); ' IF THE ACTUAL AMOUNT OF COMPENSATION HAS NOT BEEN F IXED, NO INCOME COULD ACCRUE TO HIM. IT CANNOT BE CONTENDED THAT THE MERE CLAIM BY THE ASSESSEE, AFTER TAKING OF POSSESSION, AT A PARTICULA R RATE OR FOR A CERTAIN SUM IS THE COMPENSATION. IT IS THE AMOUNT ACTUA LLY AWARDED BY THE COLLECTOR OR SUBSEQUENTLY DECREED BY THE COURT WH ICH ACCRUES TO HIM, AND THE RESPECTIVE AMOUNTS, WHETHER AWARDED BY T HE COLLECTOR OR THE COURT ACCRUE ON THE RESPECTIVE DATES ON WHICH THE AWARD OR THE DECREE IS PASSED. INCOME-TAX IS NOT LEVIED ON A MERE RI GHT TO RECEIVE COMPENSATION; THERE MUST BE SOMETHING TANGIBLE, SOMETHI NG IN THE NATURE OF A DEBT, SOMETHING IN THE NATURE OF AN OBLI GATION TO PAY AN ASCERTAINED AMOUNT. TILL SUCH TIME, NO INCOME CAN BE SAID TO HAVE ACCRUED ...... ON THE DATE WHEN THE COLLECTOR AWARD ED THE COMPENSATION, IT IS ONLY THAT AMOUNT WHICH HAD ACCRUED OR WAS DEEME D TO ACCRUE, WHETHER IN FACT PAID OR NOT. BUT BY NO STRETCH OF TH E WORDS IN SECTION 4(1)(B)(I), COULD IT BE SAID THAT THE RIGHT TO ENHAN CED COMPENSATION, WHICH HAS NOT YET BEEN ACCEPTED BY THE PROPER FORUM, NAMELY, THE COURT, HAS ALSO BECOME PAYABLE ON THE DATE WHEN THE O RIGINAL COMPENSATION BECAME PAYABLE, FOR BEING INCLUDED IN T HAT YEAR OF ASSESSMENT. THE ENHANCED COMPENSATION ACCRUES ONLY WHEN I T BECOMES PAYABLE, I.E., WHEN THE COURT ACCEPTS THE CLAIM. AS H AS BEEN STATED EARLIER, A MERE CLAIM BY THE ASSESSEE, AFTER TAKING OF POSSESSION OF THE LAND, AT A PARTICULAR RATE OR FOR A CERTAIN SUM IS NO T COMPENSATION. IT MUST NOT BE FORGOTTEN THAT, EVEN IF A COURT HAS AWARD ED ENHANCED COMPENSATION, THERE IS A RIGHT OF APPEAL BY THE GOVER NMENT TO THE HIGH COURT, AND THE HIGH COURT MAY EITHER DISALLOW THAT C LAIM OR REDUCE THE COMPENSATION. AS AGAINST THAT JUDGMENT, THERE IS A FURT HER RIGHT OF APPEAL TO THE SUPREME COURT. THE ASSESSEE ALSO CAN APPEA L AGAINST THE INSUFFICIENCY OF THE ENHANCED COMPENSATION. CAN IT BE SAID THAT THE FINAL DETERMINATION BY THE HIGHEST COURT OF THE COMPENSATIO N WOULD ENTITLE THE INCOME-TAX OFFICER, NOTWITHSTANDING THE PERIOD O F LIMITATION FIXED UNDER THE INCOME-TAX ACT, TO REOPEN THE ASSESSMENT IN W HICH HE HAD INCLUDED THE INITIAL COMPENSATION AWARDED BY THE COL LECTOR AND RECOMPUTE THE ENTIRE INCOME ON THE BASIS OF THE FINAL COMPENSATION? WE DO NOT THINK THERE CAN BE ANY JUSTIFICATION FOR SUCH A PROPOSITION. ON A PROPER CONSTRUCTION OF THE TERMS 'ACCRUE' OR 'ARISE', WE ARE OF THE VIEW THAT SUCH AN INTERPRETATION CANNOT BE PLACED. THE IN TERPRETATION GIVEN BY US DOES NOT AFFECT THE INTERESTS OF THE REVENUE. AT THE SAME TIME, IT SAFEGUARDS THE ASSESSEE AND PREVENTS HARASSMENT. TO HOLD OTH ERWISE WOULD BE CONTRARY TO THE PROVISIONS OF LAW. THE LEGAL POSITION WAS EXPLAINED IN FURTHER DETAIL B Y THE GUJARAT HIGH COURT IN TOPANDAS KUNDANMAL V. CIT [1978] 114 I TR 237. THE HIGH COURT WAS CALLED UPON TO DECIDE WHETHER THE RIG HT TO RECEIVE THE ENHANCED COMPENSATION UNDER THE LAND ACQUISITION ACT ACCRUED OR AROSE TO THE ASSESSEE WHEN BE SOUGHT A REFERENCE UNDER SE CTION 18 OF 35 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 THE ACT OR WHEN THE AWARD WAS MADE BY THE CIVIL JUDG E ALTHOUGH AN APPEAL WAS PENDING AGAINST THAT AWARD. THE LEARNED JU DGES REFERRED TO THE NATURE OF AN AWARD MADE BY THE COLLECTOR, AND A DVERTING TO THE OPINION OF THIS COURT IN RAJA HARISH CHANDRA RAJ SING H V. DEPUTY LAND ACQUISITION OFFICER [1962] 1 SCR 676 ; AIR 1961 SC 1 500, THAT THE AWARD MADE BY THE COLLECTOR WAS MERELY AN OFFER OR TENDER OF THE COMPENSATION DETERMINED BY THE COL LECTOR TO THE OW NER OF THE PROPERTY ON THE ACQUISITION, THE HIGH COURT OBSERVED (P. 247 O F 114 ITR): ' ........... THE LEGAL POSITION WHICH EMERGES IS THAT THERE IS NO LIABILITY IN PRAESENTI TO PAY AN ENHANCED COMPENSATIO N TILL IT IS JUDICIALLY DETERMINED BY THE FINAL COURT SINCE THE ENTIRE QUESTI ON, NAMELY, WHETHER THE OFFER MADE BY THE LAND ACQUISITION OFFIC ER IS INADEQUATE AND THE CLAIMANT IS ENTITLED TO AN ADDITIONAL COMPEN SATION AND IF YES, AT WHAT RATE IS IN FLUX TILL THE QUESTION IS SET AT REST FINALLY, WE DO NOT THINK THAT ANY ENFORCE ABLE RIGHT TO A PARTICULAR AMOUNT OF COMPENSATION ARISES. THE OFFER MADE BY THE LAND ACQUISITION OFFICER , BY HIS AWARD, IF NOT ACCEPTED BY A CLAIMANT WOULD NOT RESULT AUTOMATI CALLY IN A LIABILITY TO PAY ADDITIONAL COMPENSATION AS CLAIMED BY A PARTY AGGRIEVED. THERE IS NO DOUBT A LIABILITY TO PAY A COMPENSATION AS OFFER ED BY THE LAND ACQUISITION OFFICER. BAT THAT IS FAR FROM SAYING THAT THAT LIABILITY IS A LIABILITY TO PAY ADDITIONAL COMPENSATION OR ENHANCED COMPENSATION AS CLAIMED BY A PARTY AGGRIEVED. IF THERE IS AN EXISTING LIABILITY, THE MERE FACT THAT THE PAYMENT IS POSTPONED TO THE FUTURE WOUL D NOT DETRACT THAT LIABILITY FROM BECOMING A DEBT BUT THE LIABILITY TO PAY UNLIQUIDATED DAMAGES OR ADDITIONAL COMPENSATION WHICH ARE INCHOATE OR CONTINGENT WOULD NOT CREATE A DEBT.' KHAN BAHADUR AHMED ALLADIN & SONS [1969] 74 ITR 651 (AP) AND TOPANDAS KUNDANMAL [1978] 114 ITR 237 (GUJ) WERE RELIED ON BY THE GUJARAT HIGH COURT IN ADDL. CIT V. NEW JEHANGIR VAKIL MILLS CO. LTD. [1979] 117 ITR 849 FOR REAFFIRMING THAT IT WAS ON TH E FINAL DETERMINATION OF THE AMOUNT OF COMPENSATION THAT THE RIGHT TO SUCH INCOME IN THE NATURE OF COMPENSATION WOULD ARISE OR A CCRUE AND TILL THEN THERE WAS NO LIABILITY IN PRAESENTI IN RESPECT OF THE ADDITIONAL AMOUNT OF COMPENSATION CLAIMED BY THE OWNER OF THE L AND. IT IS UNNECESSARY TO REFER TO ALL THE CASES CITED BEFORE US. IT IS SUFFICIENT TO POINT OUT THAT THERE IS A CLEAR DISTINCT ION BETWEEN CASES SUCH AS THE PRESENT ONE, WHERE THE RIGHT TO RECEIVE PA YMENT IS IN DISPUTE AND IT IS NOT A QUESTION OF MERELY QUANTIFYING THE AMOUNT TO BE RECEIVED, AND CASES WHERE THE RIGHT TO RECEIVE PAYMEN T IS ADMITTED AND THE QUANTIFICATION ONLY OF THE AMOUNT PAYABLE IS LEF T TO BE DETERMINED IN ACCORDANCE WITH SETTLED OR ACCEPTED PRINCIPLES. WE AR E OF THE OPINION THAT THE HIGH COURT IS RIGHT IN THE VIEW TAKEN BY IT AND, THEREFORE, THIS APPEAL MUST BE DISMISSED. THE APPEAL IS DISMISSED. THERE IS NO ORDER AS TO COSTS. 45. WE FIND FROM THE MAHARASHTRA REGIONAL AND TOWN PLANNING ACT, 1966 THAT FOR THE PURPOSE OF DEVELOPMENT OF A SPECI AL TOWNSHIP, THE AREA REQUIRED IS ON CONTIGUOUS UNBROKEN AND UNINTERRUPTE D AREA OF NOT LESS THAN 100 ACRES AT ONE PLACE. ADMITTEDLY, FROM THE COPY OF THE SALE DEED THE 36 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 ASSESSEE AND THE CO-OWNERS WERE HAVING ONLY 70 ACRE S OF CONTIGUOUS LAND AND THEY HAD AGREED TO ARRANGE THE BALANCE LAND AND ALSO TO DELIVER A LEGAL AND PRACTICAL 24 METRES ACCESS ROAD TO THE CONTIGUO US 108 ACRES OF THE LAND. SINCE VENDORS AND THE CONSENTING PARTIES REQU IRE TIME TO FULFIL THE VARIOUS OBLIGATIONS CONTAINED IN THE SALE DEED IT W AS AGREED BY AND BETWEEN THE PARTIES THAT THE PURCHASER SHALL PAY 50 % OF THE TOTAL CONSIDERATION AT THE TIME OF EXECUTION OF THE SALE DEED AND THE BALANCE 50% CONSIDERATION TO BE PAID BY THE PURCHASER WITHI N 30 DAYS UPON THE VENDORS AND THE CONSENTING PARTIES COMPLYING IN ENT IRETY THEIR OBLIGATION AS ENUMERATED. 46. IT HAS BEEN HELD IN VARIOUS DECISIONS THAT THE TERMS AND CONDITIONS OF AN AGREEMENT HAS TO BE READ AS A WHOLE AND IT CANNO T BE READ IN PIECE- MEAL. THE HONBLE SUPREME COURT IN THE CASE OF MAN GALORE GANESH BEEDI WORKS VS. CIT REPORTED IN 378 ITR 640 (SC) HELD THA T THE REVENUE CANNOT RE-WRITE THE AGREEMENT FOR BRINGING THE ENTIRE CONS IDERATION TO TAX. THE RELEVANT OBSERVATION OF THE HONBLE SUPREME COURT R EADS AS UNDER : 33. IN THIS CONTEXT, IT MAY ALSO BE MENTIONED THAT BY DENYING THAT THE TRADEMARKS WERE AUCTIONED TO THE HIGHEST BIDDER, THE REVENUE IS ACTUALLY SEEKING TO RE-WRITE CLAUSE 16 OF THE AGREEME NT BETWEEN THE ERSTWHILE PARTNERS OF MGBW. THIS CLAUSE SPECIFICALLY STAT ES THAT THE GOING CONCERN AND ALL THE TRADEMARKS USED IN THE COUR SE OF THE SAID BUSINESS BY THE SAID FIRM AND UNDER WHICH THE BUSINESS OF THE PARTNERSHIP IS CARRIED ON SHALL VEST IN AND BELONG TO T HE HIGHEST BIDDER. UNDER THE CIRCUMSTANCES, IT IS DIFFICULT TO APPRECIATE HOW IT COULD BE CONCLUDED BY THE REVENUE THAT THE TRADEMARKS WERE NO T AUCTIONED OFF AND ONLY THE GOODWILL IN THE ERSTWHILE FIRM WAS AUCTI ONED OFF. IN D. S. BIST & SONS V. CIT11 IT WAS HELD THAT THE ACT DOES NOT CLOTHE THE TAXING AUTHORITIES WITH ANY POWER OR JURISDICTION TO RE-WRIT E THE TERMS OF THE AGREEMENT ARRIVED AT BETWEEN THE PARTIES WITH EACH O THER AT ARMS LENGTH AND WITH NO ALLEGATION OF ANY COLLUSION BETWE EN THEM. THE COMMERCIAL EXPEDIENCY OF THE CONTRACT IS TO BE ADJUD GED BY THE CONTRACTING PARTIES AS TO ITS TERMS. 47. IN THE INSTANT CASE ADMITTEDLY THE ASSESSEE ALO NG WITH OTHER CO- OWNERS WAS HAVING LAND ADMEASURING 70 ACRES SITUATE D AT WAGHOLI AND WAS NOT HAVING 108 ACRES OF CONTIGUOUS LAND THAT HAD BE EN AGREED UPON TO BE 37 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 SOLD AT THE RELEVANT TIME. FURTHER THE SALE DEED C ONTAINED CERTAIN OBLIGATIONS ON THE PART OF THE ASSESSEE AND THE CO- OWNERS TO BE FULFILLED AND THE ASSESSEE HAS RECEIVED ONLY 50% OF THE CONSIDERA TION DURING THE IMPUGNED ASSESSMENT YEAR. WE FIND FROM THE LETTER ADDRESSED BY MR. ATUL CHORDIA, DIRECTOR OF WAGHOLI PROPERTIES PVT. LTD., COPY OF WHICH IS PLACED AT PAGES 41 TO 44 OF PAPER BOOK NO.III, THAT IN RESPON SE TO NOTICE U/S.226(3) FOR RECOVERY OF DUES IN CASE OF THE ASSESSEE, HE HAS CA TEGORICALLY STATED THAT THE BALANCE AMOUNT OF RS.17.01 CRORES IS PAYABLE ON LY AFTER FULFILLMENT OF CERTAIN CONDITIONS MENTIONED IN THE AGREEMENT. IN OUR OPINION, THE CONTENTS OF THE AGREEMENT HAS TO BE READ AS A WHOLE AND THE REVENUE CANNOT RE-WRITE THE AGREEMENT. THE VARIOUS DECISIONS RELIED ON BY CIT(A) IN OUR OPINION ARE DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN ALL THOSE CASES, THE RIGHT TO RECEIVE THE CONSIDERATION HAS BEEN POSTPONED. HOWEVER, IN THE INSTANT CASE THE RIGHT TO RECEIVE T HE CONSIDERATION IS ON FULFILLMENT OF CERTAIN OBLIGATIONS. FURTHER, THE A SSESSEE HAS OFFERED THE BALANCE AMOUNT TO TAX IN A.Y. 2014-15 AS BUSINESS I NCOME. IN VIEW OF THE ABOVE DISCUSSION AND RESPECTFULLY FOLLOWING THE DEC ISIONS CITED ABOVE, WE ARE OF THE CONSIDERED OPINION THAT ASSESSEE IS LIAB LE TO CAPITAL GAIN TAX ONLY ON 50% OF THE CONSIDERATION THAT HAS BEEN RECEIVED DURING THE YEAR. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) AND AL LOW THE GROUNDS RAISED BY THE ASSESSEE. 48. THE LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING DID NOT PRESS GROUND OF APPEAL NO.4 FOR WHICH THE LD. DEPAR TMENTAL REPRESENTATIVE HAS NO OBJECTION. ACCORDINGLY, THIS GROUND BY THE ASSESSEE IS DISMISSED AS NOT PRESSED. 38 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 ITA NO. 748/PUN/2013 - DEEPAK LAXMAN KUDALE ITA NO. 749/PUN/2013 - NEERAJ HORTICULTURISTS PVT. LTD. ITA NO. 933/PUN/2013 - NUPOORA DEVELOPERS PVT. LTD. 49. IDENTICAL GROUNDS HAVE BEEN RAISED BY THE ABOVE ASSESSEES. FOR THE SAKE OF CONVENIENCE, WE REPRODUCE THE GROUNDS O F APPEAL RAISED IN ITA NO.748/PUN/2013 : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED ASSESSING OFFICER ERRED MAKING ADDITION OF CAPI TAL GAIN OF RS. 9,90,20,875/- IN RESPECT OF TRANSFER OF PLOT OF LAND SITUATED AT GAT NO. 1277 & 1278, VILLAGE WAGHOLI, DIST: PUNE WITHOUT APPRECIATI NG THE FACTS OF THE CASE IN PROPER PERSPECTIVE. THE APPELLANT HERE BY PRAYS THAT THE ADDITION MAY PLEASE BE DELETED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, LEARNED ASSESSING OFFICER COULD NOT APPRECIATE THE FOLL OWING FEATURE/FACTS OF THE TRANSACTION OF SALE OF LAND AND V ARIOUS OBLIGATIONS TO BE PERFORMED BY THE APPELLANT AND THE CO-OWNERS A. THAT THE TRANSACTION UNDER CONSIDERATION HAS TWO LI MBS - I) SALE OF THE PLOT OF LAND SITUATED AT GAT NO. 1277 AND 1278, VILLAGE WAGHOLI, DIST: PUNE AT AND FOR THE CONSIDERAT ION OF RS. 125.50 LACS AGAINST THE TRANSFER OF THE LAND UNDER CON SIDERATION AND II) THE CONSIDERATION OF RS. 125.50 LACS AGAINST THE PERFORMANCE OF VARIOUS OBLIGATION MENTIONING CLAUSE NO. IV OF THE SALE DEED DATED 2 ND MAY 2008. B. THE LEARNED ASSESSING OFFICER FAILS TO APPRECIATE THA T THE CAPITAL GAIN ARISING FROM THE TRANSFER OF THE LAND @ RS. 125.50 LACS PER ACRE IS PROPERLY DECLARED BY THE APPELLANT AND THE BALANCE 50% CONSIDERATION WAS TOWARDS THE PERFORMANCE OF VARIOUS OBLIGATION IN TERMS OF CLAUSE NO. IV OF THE SAL E DEED DATED 2 ND MAY 2008 WAS NEITHER ACCRUED NOR RECEIVED BY THE AP PELLANT. C. THAT THE CONSIDERATION OF RS.251 LAKHS PER ACRE WAS MUCH MORE THAN THE PREVAILING MARKET VALUE OF THE LAND A ND THE SAID AMOUNT EMBEDDED THE CONSIDERATION OF PERFORMANCE OF VARIOUS OBLIGATIONS. THE APPELLANT HEREBY PRAYS THAT THE ADDITION OF RS.9, 90,20,875/- MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN MAY PLEASE BE D ELETED. 3. THE APPELLANT CRAVES TO ADD, TO AMEND OR TO ALTER ANY OF THE ABOVE GROUNDS OF APPEAL. 50. AFTER HEARING BOTH THE SIDES, WE FIND THE ABOVE GROUNDS ARE IDENTICAL TO THE GROUNDS OF APPEAL NO.2 &3 IN ITA NO.1310/PUN /2013. WE HAVE ALREADY DECIDED THE ISSUE AND THE GROUNDS RAISED BY THE ASSESSEE HAVE BEEN ALLOWED. FOLLOWING THE SAME REASONINGS, THE GR OUNDS BY THE ABOVE ASSESSEES ARE ALLOWED. 39 ITA NO.1310, 1485,748, 749 & 933 /PUN/2013 51. IN THE RESULT, ITA NO.1310/PUN/2013 FILED BY TH E ASSESSEE IS PARTLY ALLOWED. ITA NO.1485/PUN/2013 FILED BY THE REVENUE IS DISMISSED AND ITA NOS. 748, 749 AND 933/PUN/2013 FILED BY THE RES PECTIVE ASSESSEES ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON 09-01-2017. SD/- SD/- (VIKAS AWASTHY) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE; DATED : 09 TH JANUARY, 2017 ) *#,! -! / COPY OF THE ORDER FORWARDED TO : / BY ORDER , // # % / TRUE COPY // // TRUE COPY // )*/ ASSISTANT REGISTRAR 6, / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT (A ), I I , PUNE 4. 5. THE CIT-II, PUNE # %%6, 6, B BENCH / DR, ITAT, B BENCH PUNE; 6. @ / GUARD FILE.