Vinod Properties Pvt. Ltd., V. DCIT,. Central Circle-8,

ITA 3549/DEL/2002

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3557 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-07-2010
• Assessment Year: 1995-1996
• Appeal Filed On: 02-09-2002
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: C S AGGARWAL; RAMIT KOCHAR

Judgement Text

ITA NO. 3549/DEL/2002 A.Y. 1995-96 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 3549/DEL/2002 A.Y. : 1995-96 M/S VENAD PROPERTIES PRIVATE LIMITED, DY. COMMIS SIONER OF INCOME TAX, USHUS, JAWAHAR NAGAR, CENTRAL CIRCLE 8, MAYU R BHAVAN, THIRUVANANTHAPURAM NEW DELHI 110 001 (PAN/GIR NO. 4-V) [APPELLANT] (RESPONDENT) ASSESSEE BY : SH. C.S. AGGARWAL, ADVOCATE & SH. RAMIT KOCHAR, CA DEPARTMENT BY : SHRI MANISH GUPTA, D.R. PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 17.6.200 2 PERTAINING TO ASSESSMENT YEAR 1995-96. 2. THE GROUND RAISED READS AS UNDER:- THE LD. DCIT AS WELL AS LD. C.I.T.(A) HAS ERRED BO TH IN FACTS AND LAW IN CONCLUDING THAT THE ASSESSEE HAS EARNED INCOME OF 1 5% ON COST OF LAND DURING THE RELEVANT ASSESSMENT YEAR AS NO RIGHT TO RECEIVE THE INCOME GET VESTED IN THE ASSESSEE AS RIGHT TO RECEIVE THE INCO ME WILL GET VESTED ONLY ON SUCCESSFUL COMPLETION OF THE PROJECT BY SI PROPERTIE S DEVELOPMENT LIMITED IN TERMS OF MOU. ITA NO. 3549/DEL/2002 A.Y. 1995-96 2 3. THE ASSESSEE IN THIS CASE IS A PRIVATE LIMITED C OMPANY INCORPORATED ON 13.1.1995 FOR CARRYING ON BUSINESS OF PURCHASE, DE VELOPMENT AND SALE OF LANDED PROPERTIES. THE COMPANY ENTERED INTO AN MEMORANDUM OF UNDERSTANDING (MOU) DATED 20.1.1995 FOR DEVELOPMENT OF LAND AT THYCAD O WNED BY MRS. PADMINI PANICKER. AS PER THE MOU THE COMPANY HAD ACQUIRED THE SOLE RIGHTS FOR MARKETING AND IDENTIFICATION OF THE PURCHASERS FOR THE PROPERTY IN RETURN FOR AN ASSURED REALIZATION OF RS. 70 LACS TO MRS. PADMINI PANICKER. THE ASSESSEE COMPANY ALSO ENTERED INTO MOU DATED 20.2.1995 WITH M/S SI PROPERTIES DEVELOPMENT LIMITED. BY VIRTUE OF WHICH THE ASSESSE E COMPANY TRANSFERRED ITS RIGHT TO M/S SI PROPERTIES DEVELOPMENT LIMITED WHIC H PAID CONSIDERATION OF RS. 70 LACS TO MRS. PADMINI PANICKER. THE FIRST INSTAL MENT OF RS. 35 LACS WAS PAID ON EXECUTION OF THE MOU DATED 23.2.1995 AND THE SECOND INSTALMENT OF RS. 35 LACS ON 15.5.1995. 3.1 ASSESSING OFFICER WAS OF THE OPINION THAT 15% OF THE LAND VALUE HAD ACCRUED TO THE ASSESSEE IN TERMS OF THE MOU WITH M/ S SI PROPERTIES DEVELOPMENT LIMITED. ASSESSING OFFICER WAS ALSO OF THE VIEW T HAT THE MOU DATED 20.2.1995, THE ASSESSEE COMPANY AND M/S SI PROPERTIES DEVELOP MENT LIMITED HAS BEEN PUT TO EFFECT WITH THE PAYMENT OF THE AMOUNT OF RS. 70 LACS BEING THE CONSIDERATION AMOUNT AND UPON PAYMENT OF WHICH THE ASSESSEE HAS A CCRUED THE RIGHT TO 15% OF THE TOTAL SANCTIONED AREA ALONGWITH 15% OF THE COVE RED CAR PARKING SPACE PROPOSED TO BE CONSTRUCTED ON THE LAND DESCRIBED IN THE SCHEDULE TO THE MOU. THE ASSESSEES CONTENTION THAT UNLESS THE ENTIRE AM OUNT WAS PAID TO MRS. PADMINI PANIKER BY SI PROPERTY DEVELOPMENT LTD. THEY COULD NOT BE CONSIDERED TO HAVE TAKEN OVER THE LAND COMPLETELY AS THEY MADE THE PAY MENT IN TWO PARTS ONE IN THE ITA NO. 3549/DEL/2002 A.Y. 1995-96 3 ASSESSMENT YEAR 1995-96 AND ANOTHER IN ASSESSMENT Y EAR 1996-97 WAS NOT ACCEPTED BY THE ASSESSING OFFICER . ASSESSING OFF ICER FURTHER HELD AS UNDER:- IN THIS ASPECT IT IS TO BE STATED THAT THE MOU D ATED 20.1.1995 BETWEEN THE ASSESSEE AND MRS. PADMINI PANIKER STIPULATED TH AT THE SUM OF RS. 7 0 LACS WAS TO BE PAID WITHIN ONE MONTH FROM THIS DATE I.E. BY 20.2.2002. CLAUSE 2 OF THE MOU DATED 20.1.95 STIPUALTED THAT THE AGENT ASSURES THE MINIMUM GUARANTEED REALIZATION OF RS. 70 LACS WITHI N A PERIOD OF ONE MONTH FROM THIS DATE. IF THE AGENT IS UNABLE TO IDENTIFY PURCHASERS WITHIN THE ABOVE PERIOD, THE AGENT AGREES TO MAKE GOOD THE SAID SUM IN THE FORM OF EMD WITHIN A PERIOD OF ONE MONTH FROM THE EXPI RY OF THE SAID PERIOD OF ONE MONTH. CLAUSE 4 OF THE SAME MOU ALSO STIPULATE S THAT THE THE 2 ND PARTY (THE ASSESSEE) WILL BE ENTITLED TO ACT IN PUR SUANCE TO THE SAID POWER OF ATTORNEY ONLY AFTER REALIZATION OF THE SAID CONSID ERATION OF RS. 70 LACS OR IN FAILURE THEREOF PAYMENT OF THE SAID EARNED MONEY OF RS. 70 LACS TO THE FIRST PARTY. HOWEVER, AS STATED BY THE ASSESSEE IN ITS L ETTER DATED 27.12.2001 THE CONSIDERATION FOR RS. 70 LACS WAS PAID TO MRS. PADMINI PANIKER BY SI PROPERTY DEVELOPMENT LTD. IN TWO DIFFERENT INSTALM ENT OF RS. 35 LAKHS EACH. THE FIRST SUCH PAYMENT WAS MADE BY CROSSED CHEQUE NO. 692873 DATED 23.2.95 AND THE 2 ND PAYMENT WAS MADE BY CROSSED CHEQUE 691471 DATED 15.5.1995. IT IS THUS VERY CLEAR THAT THE CONSIDE RATION RECEIVED BY MRS. PADMINI PANIKER THROUGH HER AGENT I.E. THE ASSESSEE WAS NOT STRICTLY AS PER THE CONDITIONS OF THE MOU DATED 20.1.95. THERE IS NO EVIDENCE THAT THE SAID MOU HAD BEEN ANNULLED OR CANCELLED ON ACCOUNT OF NON-PAYMENT OF THE ENTIRE AMOUNT OF RS. 70 LACS WITHIN ONE MONTH F ROM 20.1.95. THERE IS NO ITA NO. 3549/DEL/2002 A.Y. 1995-96 4 EVIDENCE THAT THE SAID MOU HAD BEEN ANNULLED OR CA NCELLED ON ACCOUNT OF NON-PAYMENT OF THE ENTIRE AMOUNT OF RS. 70 LAKHS WI THIN ONE FORM 201.95. THE MOU WAS VERY MUCH IN EFFECT DESPITE THE DELAY I N PAYMENT OF THE CONSIDERATION AS PER PROVISIONS OF THE MOU. SIMILARLY PROVISIONS OF THE MOU DATED 20.2.95 BE TWEEN THE ASSESSEE AND SI PROPERTY DEVELOPMENT LTD. STIPULATE D THAT THE EARNEST MONEY DEPOSIT OF RS. 7 0 LAKHS WOULD BE PAID AS FOL LOWS:- A) ON EXECUTION OF THIS MOU RS. 35 LAKHS HAS BEEN PAID BY THE 2 ND PARTY TO THE FIRST PARTY, AND THE FIRST PARTY ACKNO WLEDGES RECEIPT OF THE SAME. B) ON 20.3.95 AND ON VACATING THE TENANT RS. 35 LAKHS. ON THIS ALSO DATES OF PAYMENT WERE NOT ADHERED TO S TRICTLY AS PER THE PROVISIONS OF MOU, SINCE THE 2 ND PAYMENTS MADE IN MAY, 95, AS DISCUSSED ABOVE. IT IS THUS CLEAR THAT DESPITE OF T HESE DELAYS THE MOU IS VERY MUCH IN EFFECT. THE ASSESSEES CONTENTION THAT THE RIGHT TO RECEIVE THE SHARE IS NOT VESTED IN THE ASSESSEE DU RING THE SAID ASSTT. YEAR AS UNLESS THE ENTIRE AMOUNT IS PAID, SI PROPER TY DEVELOPMENT LTD. COULD NOT HAVE CONSIDERED TO HAVE TAKEN OVER T HE LAND COMPLETELY..EVEN THE LAND PAYMENTS WERE NOT IN FUL L AND THERE IS NO QUESTION OF OUR HAVING ESTABLISHMENT ANY RIGHT TO RECEIVE THE INCOME AS PER PERFORMANCE OF THE MOU TO THE EXTENT OF EVE N THE PAYMENT OF LAND VALUE HAS NOT BEEN FULFILLED BY M/S SI PROP ERTY DEVELOPMENT LT. IS NOT ACCEPTABLE. THE ASSESSEE CANNOT MAKE T HIS CONTENTION THAT ITA NO. 3549/DEL/2002 A.Y. 1995-96 5 THE RIGHT OVER THE LAND HAS NOT BEEN TAKEN OVER BY SI PROPERTY DEVELOPMENT LTD. JUST BECAUSE THE PAYMENT WAS DELAYE D WHEN THERE IS EVERY EVIDENCE THAT THE MOU IS TILL IN FORCE. IT MAY BE MENTIONED HERE AGAIN THAT THE MOU DATED 20.1.1995 SPECIFICALLY LAYS DOWN THAT THE FIRST PA RTY HAS ON THIS DATE, DEPOSITED THE ORIGINAL TITLE DEEDS PERTAINING TO TH E SCHEDULE PROPERTY WITH THE 2 ND PARTY I.E. THE ASSESSEE. THE FIRST PARTY SHALL PU T THE 2 ND PARTY IN PROCESSION OF THE SCHEDULE PROPERTY ON REC EIPT OF THE SUM OF RS. 70 LAKSH. THE ASSESSEE HAS STATED IN THIS LETTE R DATED 8.2.2001, THAT NO PROJECT HAD STARTED AND NO BUSINESS ACTIVIT Y ON THE LAND HAD COMMENCED AND AGAIN IN HIS LETTER DATED 19.12.2001 THAT THE VALUE OF 15% OF THE CONSTRUCTED AREA WILL BE REALIZED BY THE COMPANY AFTER THE COMPLETION OF THE CONSTRUCTION. HOWEVER, THERE IS NO DOUBT THAT AS FAR AS THE RIGHT OF THE ASSESSEE TO 15% OF THE V ALUE OF THE COST OF LAND ALONE IS CONCERNED, THE ASSESSEE HAS ALREADY A CCRUED THE RIGHT TO 15% OF THE TOTAL SANCTIONED AREA AND THEREFORE T HE OWNERSHIP TO THAT MUCH OF THE LAND AS THE MOU ARE IN FORCE. THUS EVEN THOUGH AS CONTENDED BY THE ASSESSEE, NO INCOME FROM THE BUSIN ESS HAS BEEN ACCRUED TO THE COMPANY DURING THE PREVIOUS YEAR REL EVANT TO THE PREVIOUS YEAR UNDER CONSIDERATION ON ACCOUNT OF N ON- COMMENCEMENT OR NON-COMPLETION OF PROJECTS BUSINESS , INCOME TO THE EXTENT OF THE VALUE OF 15% OF THE COST OF THE LAND ON WHICH THE BUILT UP AREA IS TO BE CONSTRUCTED HAS BEEN ACCRUED BY THE ASSESSEE DURING THE RELEVANT F.Y. UNDER CONSIDERATION. ITA NO. 3549/DEL/2002 A.Y. 1995-96 6 ON THE BASIS OF THE FACTS THUS DISCUSSED ABOVE RS. 10,50,000/- BEING 15% OF THE COST OF LAND IS TREATED AS THE IN COME OF THE ASSESSEE DURING THE RELEVANT F.Y. THE VALUE OF 15 % OF THE CONSTRUCTED AREA WILL BE DETERMINED AS AND WHEN THE CONSTRUCTION IS COMPLETED AND THE POSSESSION IS TAKEN OVER BY THE ASSESSEE. 4. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) ASSESSEE SUBMITTED THAT THE ASSESSEE HAS JUST ENTERED AN AGREEMENT WIT H THE LAND OWNER AND A SECOND AGREEMENT WITH THE DEVELOPER TO DEVELOP AND BUILD FLATS ON THIS LAND. THE DEVELOPER WOULD GIVE 15% OF THE BUILT-UP AREA INCLU DING PARKING AREA TO THE ASSESSEE. NO INTEREST HAS ACCRUED TO THE ASSESSEE SINCE VARIOUS FORMALITIES WERE TO BE COMPLETED. IT WAS ARGUED THAT IT IS ONLY A T ECHNICAL FORMALITY THAT IT HAS BEEN MENTIONED IN THE AGREEMENT THAT THE ASSESSEE W OULD GET A PERCENTAGE OF THE LAND DIRECTLY FROM THE OWNER. A SIMILAR CLAUS E HAS BEEN INSERTED EVEN FOR OTHER BUYERS WHO WILL GET THE LAND AND FLAT BUILT U P BY THE DEVELOPER. SINCE NO INTEREST HAS ACCRUED TO THE ASSESSEE, NO INCOME CAN BE TAXES AS SUCH. 4.1 CONSIDERING THE ABOVE THE LD. COMMISSIONER OF I NCOME TAX (APPEALS) HELD AS UNDER:- I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. COUNSEL. THE ASSESSEE HAD ACQUIRED THE LAND BELONGING TO THE LAD Y FOR ITS DEVELOPMENT AND ONWARD SALES TO THE CUSTOMERS FOR A CONSIDERATI ON OF RS. 70 LACS AS PER THE AGREEMENT DATED 20.1.95. SUBSEQUENTLY, VIDE SEC OND AGREEMENT DATED 20.2.95, THE ASSESSEE COMPANY AUTHROISED M/S SI DEV ELOPERS TO BUILD AND DEVELOP THE LAND WHO IN TURN WOULD GIVE A PAYMENT O F RS. 70 LAKHS AND A ITA NO. 3549/DEL/2002 A.Y. 1995-96 7 BUILT UP AREA TO THE EXTENT OF 15% TO THE ASSESSEE. THE PAYMENT OF RS. 70 LACS WAS MADE TO THE LADY AS PER THE AGREEMENT. AS PER CLAUSE 3 OF THE SECOND MEMORANDUM DATED 20.2.95, IT WAS AGREED THAT THE ASSESSEE WOULD GET THE PROPORTIONATE PERCENTAGE OF LAND FOR THE 15 % BUILT SPACE DIRECTLY FROM THE OWNER. IT IS THUS EVIDENT FROM THIS CLAU SE THAT THE EXECUTION OF THE FIRST AGREEMENT WITH THE LADY, PROPORTIONATE PE RCENTAGE OF THE LAND FOR THE 15% BUILT UP AREA, THE ASSESSEE HAS ACQUIRED IN TEREST OVER THIS LAND SINCE AGREEMENT WITH THE FIRST LADY ALONGWITH THE S ECOND AGREEMENT WAS EXECUTED. SINCE NO BUILT UP AREA HAD BEEN CONSTRU CTED ON THIS LAND, NO INCOME HAS ACCRUED AS FAR AS THE BUILT UP AREA IS C ONCERNED. HOWEVER, AS PER THIS CLAUSE, INTEREST HAS ACCRUED OVER THE PERC ENTAGE OF LAND AND, THEREFORE, THE ASSESSING OFFICER IS JUSTIFIED IN HO LDING THAT 15% OF THE LAND HAS ACCRUED TO THE ASSESSEE AS ITS INCOME. THE ADDI TION OF RS. 10,50,000/- ON THIS ACCOUNT IS JUSTIFIED AND IS CONFIRMED. 5. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BE FORE US. 5.1 LD. COUNSEL OF THE ASSESSEE HAS REITERATED BEFO RE US THAT ASSESSEE JUST ENTERED INTO AN AGREEMENT AND NO INTEREST HAVE ACCR UED TO THE ASSESSEE. THE DEVELOPER WOULD GIVE 15% OF THE AREA TO THE ASSESSE E. HE CLAIMED THAT NO BUILDING ACTUALLY HAS EVEN COMMENCED DURING THE YEA R, SO THERE IS NO QUESTION OF 15% INTEREST ACCRUING TO THE ASSESSEE DURING THE YE AR. LD. COUNSEL OF THE ASSESSEE FURTHER SUBMITTED THAT NO INCOME HAD ACCRUED TO THE ASSESSEE. HE CLAIMED THAT INCOME WILL ACCRUE TO THE ASSESSEE ONLY AFTER PRO PERTY IS CONSTRUCTED. HE CLAIMED THAT THE CONSTRUCTION OF THE PROPERTY HAS NOT EVEN COMMENCED. IT IS ONLY AFTER THE PROPERTY IS CONSTRUCTED AND 15% THER EOF IS OFFERED TO THE ASSESSEE ITA NO. 3549/DEL/2002 A.Y. 1995-96 8 AND THE SAME IS SOLD THEN IT CAN BE SAID THAT ANY I NCOME AS ACCRUED TO THE ASSESSEE. IN THIS REGARD, LD. COUNSEL OF THE ASSES SEE RELIED UPON THE HONBLE APEX COURT DECISION IN THE CASE E.D. SASSOON & COMPANY L TD. AND OTHERS VS. C.I.T. IN 26 ITR 27. 5.2 LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HA ND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. LD. DEPARTMENTAL REPRESEN TATIVE FURTHER SUBMITTED THAT THE AGREEMENTS MAKE IT CLEAR THAT THE INTENTION WAS THERE TO SELL THE LAND AND THE ASSESSEE HAS BEEN ABLE TO SUCCESSFULLY SELL THE LA ND AND OBTAIN 15% INTEREST IN LAND, AND HENCE HE CLAIMED THAT LAND HAVING BEEN S OLD, 15% OF THE VALUE THEREOF AS ACCRUED TO THE ASSESSEE. LD. DEPARTMENTAL REPRE SENTATIVE FURTHER CONTENDED THAT 15% OF THE LAND IS VERY MUCH ACCRUED TO THE ASSESSEE AND VALUE THEREOF HAS BEEN RIGHTLY COMPUTED BY THE ASSESSING OFFICER @15% OF RS. 70 LACS. HE FURTHER CLAIMED THAT FURTHER INCOME BY WAY OF B UILT AREA WILL ACCRUE TO THE ASSESSEE ON COMPLETION OF THE PROJECT AND THAT WILL BE TAXED THEREFROM. 5.3 LD. COUNSEL OF THE ASSESSEE IN REBUTTAL CLAIM STATED THAT EVEN IF THE INTENTION WAS TO SELL THE LAND, IT IS EVENT THAT AS SESSEE WAS DEALING IN LAND AND IN THIS RESPECT ASSESSEE WAS ENTITLED TO VALUE THE LA ND AT MARKET COST OR WHICHEVER IS LOWER. HE CLAIMED THAT ADMITTEDLY ASSESSEE HAS N OT INCURRED ANY COST IN ACQUISITION OF THIS INTEREST IN LAND, SO THERE IS N O QUESTION OF ACCRUAL OF ANY INCOME. HE ARGUED THAT ASSESSEE WAS ENTITLED TO VALUE THE SAME AT COST OR MARKET VALUE WHICH IS LOWER. ITA NO. 3549/DEL/2002 A.Y. 1995-96 9 5.4 LD. COUNSEL FURTHER SUBMITTED THAT SUBSEQUENTLY WHEN THE BUILDING CONSTRUCTION HAS BEEN COMPLETED AND ASSESSEE HAS BE EN GIVEN HIS SHARE, THE SAME HAS BEEN DULY ACCOUNTED FOR AS INCOME. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS. WE FIND THAT AS PER THE AGREEMENT DATED 20.1.2005 BETWEEN THE ASSESSEE AND MRS. PADMINI PANIKER, THE ASSESSEE WAS APPOINTED AS SOLE AGENT TO MARKET THE IMPUGNED PROPERTY AND TO IDENTIFY THE PURCHASERS. AS PER THE SAID MOU THE ASSESSEE WAS REQUIRED TO PAY EARNEST MONEY DEPOSIT OF RS. 70 LACS TO MRS. PADMIN I PANIKER, WHO HAD AGREED TO SELL THE SAID PROPERTY TO THE NOMINEE OF THE ASSESS EE. NOW THE ASSESSEE ENTERED INTO AN MOU WITH M/S SI PROPERTIES DEVELOPMENT LTD . FOR THE DEVELOPMENT AND CONSTRUCTION ON THE SAID LAND. THE SAID MOU ENVISA GED PAYMENT OF RS. 70 LACS AS EARNEST MONEY DEPOSIT FIRSTLY RS. 35 LAKHS ON EXECU TION OF THE MOU AND SECONDLY RS. 35 LASKHS ON 20.3.2005 ON VACATING THE LAND. THE ASSESSEE WAS ALSO ENTITLED FOR THE 15% OF THE BUILT UP AREA. THIS MOU VIDE CL AUSE 3 FURTHER PROVIDED THAT THE PROPORTIONATE PERCENTAGE OF LAND FOR THE 15% BUIL T UP SPACE TO BE GIVEN TO THE FIRST PARTY WILL BE OBTAINED BY THE FIRST PARTY DI RECTLY FROM OWNER. 6.1 IN THE BACKGROUND OF THE AFORESAID DISCUSSION, WE FIND THAT AS PER TWO AGREEMENTS ASSESSEE WAS TO OBTAIN 15% INTEREST IN T HE SAID LAND WHEN RS. 70 LACS WAS PAID TO MRS. PADMINI PANIKER. AS PER THE ADMITT ED FACT ONLY RS. 35 LACS HAS BEEN PAID TO MRS. PADMINI PANIKER DURING THE CURREN T ASSESSMENT YEAR AND RS. 35 LACS IN THE SUBSEQUENT ASSESSMENT YEAR. HENCE THE TRANSACTION CANNOT BE SAID TO HAVE BEEN COMPLETED DURING THE CURRENT ASSESSMENT Y EAR. ASSESSING OFFICERS CONTENTION IS THAT AS PER THE MOU UPON RS. 70 LA CS PAYMENT FROM M/S SI PROPERTIES AND DEVELOPMENT LTD. HAVE ACCRUED TO TH E ASSESSEE AS PER THE TERMS ITA NO. 3549/DEL/2002 A.Y. 1995-96 10 OF MOU IN THE CURRENT ASSESSMENT YEAR. THOUGH T HE TRANSACTION HAS NOT BEEN COMPLETED DURING THE YEAR, EVEN IF THIS ARGUMENT IS ACCEPTED AND 15% OF INTEREST IN LAND IS SAID TO HAVE ACCRUED TO THE ASSESSEE, NO INCOME CAN BE SAID TO HAVE ACCRUED TO THE ASSESSEE. IT IS AN ADMITTED FACT TH AT ASSESSEE WAS INTERESTED IN DEALING/SELLING THE LAND AND DERIVING THE INCOME THEREFROM. IN THIS CONTEXT, IT IS CLEAR THAT ASSESSEE HAS ACTUALLY NOT INCURRED ANY PAYMENT TO SECURE INTEREST OF 15% OF THE SAID LAND. IN THIS RESPECT, THE CLAIM, LD. COUNSEL OF THE ASSESSEE IS CORRECT THAT ASSESSEE HAS NOT INCURRED ANY COST IN ACQUIRING INTEREST THE SAID LAND. AT BEST IT CAN BE SAID THAT ASSESSEE HAS OBTAINED A N INTEREST IN THE LAND, THE INCOME FROM WHICH WILL ACCRUE ONLY WHEN THE ASSESS EE RECEIVES 15% SHARE FROM THE S.I. PROPERTIES UPON DEVELOPMENT AND THE SAME I S DISPOSED OFF. HENCE WE ARE IN AGREEMENT WITH THE CONTENTION OF THE ASSESSEE, T HAT NO INCOME HAS ACCRUED TO THE ASSESSEE DURING THE CURRENT YEAR. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/07/2010. SD/- SD/- [A.D. JAIN] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE 16/07/2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR,ITAT, DELHI BENCHES