Mahaveer Singh, Ghaziabad V. ITO, Ghaziabad

ITA 3830/DEL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86757 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 09-02-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 11-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI ABY. T. VARKEY : JUDICIAL MEMBER ITA NO. 3830/DEL/2011 A.Y. 2006-07 MAHAVEER SINGH, VS. INCOME TAX OFFICER, H. NO. 336, PRAHLAD GARHI, WARD 1(4), GHAZIABAD. VASUNDHARA, GHAZIABAD. PAN: AQVPS 1955 M ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI K.V.S. GUPTA ADV. RESPONDENT BY : SHRI P. DASS KANUNJHA SR. DR DATE OF HEARING : 09-02-2015 DATE OF ORDER : 13-02-2015. O R D E R PER S.V. MEHROTRA, A.M:- THIS APPEAL, PREFERRED BY THE ASSESSEE, IS DIRECTE D AGAINST THE ORDER DATED 18-05-2011, PASSED BY THE CIT(APPEALS)-GHAZI ABAD, IN APPEAL NO. 128/2008-09/GZB, RELATING TO A.Y. 2006-07. 2. BRIEF FACTS ARE THAT THE ASSESSEE HAD FILED ITS RETURN OF INCOME DECLARING INCOME OF RS. 1,04,100/-. THE AO NOTICED THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD RECEIVED COMPE NSATION OF RS. 12,94,086/-. IN RESPONSE TO AOS QUERY, THE ASSESSE E SUBMITTED THAT THE ACQUIRED LAND WAS AGRICULTURAL LAND BEING OUT OF MU NICIPAL LIMIT AT THE TIME OF ACQUISITION IN 1982. IT WAS INCLUDED IN MUNICIPA L LIMITS W.E.F. 25-11-1994. 2 IT WAS SUBMITTED THAT SINCE THE LAND WAS NOT IN THE PRESCRIBED LIMITS AND SAME WAS AGRICULTURAL LAND, CAPITAL GAIN DID NOT AR ISE ON THE SAME. THE AO FURTHER REQUIRED THE ASSESSEE TO FURNISH FULL DETAI LS OF THE INCOME AND ALSO ASKED AS TO WHY INTEREST INCOME ACCRUED ON COMPENSA TION SHOULD NOT BE CONSIDERED AS TAXABLE. HE OBSERVED THAT THE ASSESSE E SUBMITTED DETAILS OF INTEREST ACCRUED OF RS. 7,70,433/- AND OFFERED THE SAME FOR ADDITION. HE, ACCORDINGLY, MADE THE ADDITION AS OFFERED BY ASSESS EE OF RS. 7,70,433/-. 3. BEFORE LD. CIT(A), THE ASSESSEE HAD, INTER ALIA, TAKEN FOLLOWING GROUNDS: 2. THAT THE ASSESSEE FOLLOWS ACCRUAL SYSTEM OF ACC OUNTING AND INTEREST SHOULD HAVE BEEN CHARGED ON ACCRUAL BA SIS; ONLY IN THE YEARS IN WHICH IT HAS ACCRUED AND NOT IN THE YE AR OF RECEIPT. HOWEVER, EVEN IF CASH SYSTEM IS FOLLOWED ONLY RS. 4 05764/- HAS BEEN RECEIVED DURING THE FINANCIAL YEAR 2005-06 SO ON CASH BASIS ADDITION CANNOT BE MORE THAN RS. 405764/-. 3. THAT INTEREST OF EARLIER YEARS HAS ALREADY TAKEN / CONSIDERED IN THE INCOME WHEN IT WAS ACCRUED, NOW I T CANNOT BE TAKEN AGAIN. 4. THAT AS PER THE CASE OF BIKRAM SINGH AND ORS. V. LAND ACQUISITION COLLECTOR AND ORS. 224 ITR 551 (SC) IT WAS HELD THAT THE ASSESSEE IS ENTITLED TO SPREAD OVER THE IN TEREST RECEIVED ON ENHANCED COMPENSATION ON COMPULSORY ACQUISITION OF LAND AMONG THE YEARS FOR WHICH THE INTEREST IS RECEIVED. SINCE IN OUR CASE ALSO INTEREST RECEIVED WAS FOR EARLIER YEARS T HE SAME CANNOT BE ADDED DURING THE FINANCIAL YEAR 2005-06. 4. LD. CIT(A) CONFIRMED THE ADDITION, INTER ALIA, O BSERVING THAT IT WAS ASSESSEES OWN DESIRE TO OFFER THE ENTIRE INTEREST INCOME IN ONE YEAR. 3 5. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT SINC E ASSESSEE WAS OFFERING THE INCOME ON ACCRUAL BASIS, THEREFORE, ENTIRE INCOME C OULD NOT BE ASSESSED TO TAX AND CAN RESILE FROM ITS EARLIER DECISION. HE RELIED ON FOLLOWING DECISIONS: - DCIT VS. K.S. SURESH 319 DTR 1 (MAD.); - SHRI SIDHIVINAYAK DYEING & PRINTING MILLS (P) LTD. 119 ITD 169 (AHD)(T.M.); - 116 DTR 644 (P&H). - A.S. VANIA NADAR & SONS VS. CIT 62 ITD 48 (MAD.); - 50 ITD 513 (SMC) - 56 ITR 67 (SC) CIT VS. MR. P. FIRM 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND HAVE PERUSED THE RECORD OF THE CASE. IT IS WELL SETTLED LAW THAT IF AN ADMISSION IS MADE, WHICH IS CONTRARY TO LAW, THEN THE SAME IS NOT BINDING ON AS SESSEE. BOTH THE LOWER REVENUE AUTHORITIES HAVE DECIDED THE ISSUE SOLELY ON THE BA SIS OF ASSESSEES ADMISSION, WHICH, AS PER LD. COUNSEL FOR THE ASSESSEE, WAS NOT IN ACCORDANCE WITH LAW. WE, THEREFORE, RESTORE THE MATTER TO THE FILE OF AO FOR DE NOVO CONSIDERATION OF THE ENTIRE ISSUE. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 13-02-2015. SD/- SD/- (ABY. T. VARKEY ) ( S.V. MEHROTRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 13-02-2015. MP: C OPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR 4