DCIT, Jaipur V. HARSHVARDHAN LAND LTD., Jaipur

ITA 582/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1891 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 01-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VRINDERA MEHTA
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 582/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2010-11 DCIT, CENTRAL CIRCLE-3, JAIPUR. CUKE VS. M/S HARSHVARDHAN LAND LTD., HIND HOTEL BUILDING, CHAURA RASTA, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCH9784Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA- @ ITA NO. 583/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2011-12 DCIT, CENTRAL CIRCLE-3, JAIPUR. CUKE VS. M/S HARSHVARDHAN LAND LTD., HIND HOTEL BUILDING, CHAURA RASTA, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCH9784Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA- @ ITA NO. 584/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2012-13 DCIT, CENTRAL CIRCLE-3, JAIPUR. CUKE VS. M/S HARSHVARDHAN LAND LTD., HIND HOTEL BUILDING, CHAURA RASTA, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCH9784Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA- @ ITA NO. 332/JP/2017 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2013-14 DCIT, CENTRAL CIRCLE-3, CUKE VS. M/S HARSHVARDHAN LAND LTD., C-7, PRITHVIRAJ ROAD, ITA NO. 582 TO 584/JP/2016 & 332/JP/2017 DCIT VS. M/S HARSHVARDHAN LAND LTD., JAIPUR 2 JAIPUR. C-SCHEME, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCH9784Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI SANDEEP JHANWAR (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI VRINDERA MEHTA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 31/10/2017 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 22/11/2017 VKNS'K@ ORDER PER BENCH: THESE FOUR APPEALS BY THE REVENUE ARE DIRECTED AGA INST FOUR SEPARATE ORDERS OF LD. CIT(A), JAIPUR FOR THE A.Y. 2010-11 TO 2013-14. SINCE THE REVENUE HAS RAISED COMMON GROUNDS IN THES E APPEALS EXCEPT THE QUANTUM OF ADDITION DELETED BY THE LD. CIT(A) , THEREFORE, THE GROUNDS RAISED FOR THE A.Y. 2010-11 ARE REPRODUCED AS UNDER:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS RIGHT IN DELETING THE ADDITION OF RS . 49,94,000/- MADE ON ACCOUNT OF ACCRUED INTEREST INCOME WITHOUT APPRECIATING THE FACTS THAT THE ASSESSEE COMPANY FOLLOWED MERCAN TILE SYSTEM OF ACCOUNTING. THE APPELLANT CRAVE, LEAVE OR RESERVING THE RIGHT T O AMEND MODIFY, ALTER ADDED OR FOREGO ANY GROUND(S) OF APPE AL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 2. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF REAL ESTATE. THERE WAS A SEARCH & SEIZURE ACTION IN CASE OF JOHA RI GROUP ON 05.09.2011 TO WHICH THE ASSESSEE BELONGS. THE ASSES SEE FILED ITS RETURN OF INCOME IN RESPONSE TO NOTICE U/S 153A. THE AO NO TED THAT THE ITA NO. 582 TO 584/JP/2016 & 332/JP/2017 DCIT VS. M/S HARSHVARDHAN LAND LTD., JAIPUR 3 ASSESSEE HAS TAKEN A PROPERTY ON LEASE FROM M/S R.L . VERMA & SONS (HUF) AND DEPOSITED RS. 4,50,00,000/- AS SECURITY WITH LESSOR ON WHICH THE ASSESSEE WAS ENTITLED TO RECEIVE INTERES T @ 2.92% P.M. I.E. RS. 13,14,000/- P.M. THE ASSESSEE ALSO ENTERED INTO A LOAN AGREEMENT WITH THE SAID PERSON M/S R.L. VERMA & SONS IN RESPE CT OF THE SAID AMOUNT OF RS. 4,50,00,000/- PAID BY THE ASSESSEE. T HE AO FURTHER NOTED THAT FOR A.Y. 2010-11 THE ASSESSEE HAS ADMITT ED INTEREST INCOME OF RS. 46,42,000/- AS AGAINST THE INTEREST ACCRUED OF RS. 96,36,000/-. FOR THE A.Y. 2011-12 THE ASSESSEE HAS ADMITTED THE INTEREST INCOME OF RS. 3,12,000/- AS AGAINST THE ACCRUED INTEREST OF R S. 1,57,68,000/-. FOR THE A.Y. 2012-13 AND 2013-14 THE ASSESSEE DID NOT A DMIT ANY INTEREST INCOME AS AGAINST THE ACCRUED INTEREST OF RS. 1,57, 68,000/- AND RS. 1,05,12,000/- RESPECTIVELY. THE AO WAS OF THE VIEW THAT THE ASSESSEE COMPANY IS FOLLOWING ACCRUAL SYSTEM OF ACCOUNTING A ND THEREFORE THE ACCRUED INTEREST ON SECURITY DEPOSIT SHOULD HAVE BE EN DISCLOSED BY THE ASSESSEE IN ITS RETURN OF INCOME. ACCORDINGLY, THE AO PROPOSED TO MAKE THE ADDITION OF THE DIFFERENTIAL AMOUNTS BEING THE INTEREST ACCRUED BUT WAS NOT ADMITTED BY THE ASSESSEE FOR ALL THESE FOUR YEARS. THE ASSESSEE CONTENDED BEFORE THE AO THAT AFTER EXECUTION OF LEA SE DEED IT WAS FOUND THAT THE LESSOR DEFRAUDED THE ASSESSEE AND T HIS PROPERTY LED OUT ITA NO. 582 TO 584/JP/2016 & 332/JP/2017 DCIT VS. M/S HARSHVARDHAN LAND LTD., JAIPUR 4 TO THE ASSESSEE WAS ALREADY MORTGAGED TO KOTAK MAHI NDRA BANK LTD. AND CONSEQUENTLY THE BANK TOOK OVER THE POSSESSION OF THE PROPERTY. THE CHEQUES FOR PAYMENT OF INTEREST ISSUED BY M/S R .L. VERMA (HUF) WERE GOT DISHONORED WHEN THE ASSESSEE PRESENTED FOR ENCASHMENT. ACCORDINGLY, THE ASSESSEE FILED A COMPLAINT BEFORE THE METROPOLITAN MAGISTRATE U/S 138 OF NEGOTIABLE INSTRUMENT ACT. TH US, THE ASSESSEE CONTENDED THAT THE RECOVERY OF THE PRINCIPAL AS WEL L AS INTEREST WAS DOUBTFUL AND THEREFORE THE INTEREST INCOME WHICH WA S NOT A REAL INCOME CANNOT BE CHARGED TO TAX. FURTHER, WHEN THE ASSESSE E HAS NOT CLAIMED ANY INTEREST EXPENSES, THEN NO INTEREST ON ADVANCE CAN BE BROUGHT TO INCOME TAX ON ACCRUAL BASIS PARTICULARLY WHEN THE I NTEREST COULD NOT BE REALIZED OR RECOVERED. THE ASSESSING OFFICER DID NO T ACCEPT THE CONTENTIONS OF THE ASSESSEE AND MADE THE RESPECTIVE ADDITIONS ON ACCOUNT OF INTEREST INCOME ACCRUED OF RS. 49,94,000 /- FOR THE A.Y. 2010-11 RS. 1,57,68,000/- FOR THE A.Y. 2011-12 TO 2 013-14 RESPECTIVELY. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT(A). THE CIT(A) ACCEPTED THE EXPLANATION AND CONTENTION OF T HE ASSESSEE THAT ALL SUBSEQUENT CHEQUES OF INTEREST ISSUE BY THE LESSOR HAVE GOT DISHONORED AGAINST WHICH THE ASSESSEE FILED THE CLAIM U/S 138 OF NEGOTIABLE INSTRUMENT ACT. THUS, THE LD. CIT(A) ACCEPTED THE C LAIM OF THE ASSESSEE ITA NO. 582 TO 584/JP/2016 & 332/JP/2017 DCIT VS. M/S HARSHVARDHAN LAND LTD., JAIPUR 5 THAT NO RECOVERY OF PRINCIPAL AS WELL AS INTEREST C OULD BE MADE AND THEREFORE THE ADDITION MADE BY THE AO WAS DELETED. AGGRIEVED BY THE IMPUGNED ORDER OF THE LD. CIT(A) THE REVENUE HAS FI LED THE PRESENT APPEAL. 3. THE LD. DR HAS SUBMITTED THAT AS PER LEASE DATED 19 TH AUGUST, 2009 THE ASSESSEE DEPOSITED RS. 4,50,00,000/- WITH THE LESSOR AS A SECURITY AND WAS TO RECEIVE INTEREST @ 2.92% P.M. ON THE SECURITY DEPOSIT AMOUNT EVERY 20 TH DAYS ON EACH MONTH. THUS AS PER THE SAID LEASE DEED AS WELL AS LOAN AGREEMENT OF EVEN DATED THE ASSESSEE WAS ENTITLED AND HAD RIGHT TO RECEIVED RS. 13,14,000/- P.M. AS INTEREST FROM THE LESSOR. THERE IS NO DISPUTE THAT THE ASSESSEE C OMPANY IS FOLLOWING ACCRUAL SYSTEM OF ACCOUNTING AND THEREFORE THE INTE REST WHICH ACCRUED TO THE ASSESSEE ON THE SECURITY DEPOSIT HAS TO BE A SSESSED AS INCOME OF THE ASSESSEE FOR EACH OF THE ASSESSMENT YEAR. FILIN G OF THE COMPLAINT U/S 138 OF NEGOTIABLE INSTRUMENT ACT HAS NO BEARING ON THE ACCRUAL OF THE INCOME WHICH IS A REAL INCOME AND CANNOT BE TER MED AS NOTIONAL INCOME. THE ASSESSING OFFICER HAS NOT CALCULATED TH E INTEREST ON THE BASIS OF ANY NOTION OR NOTIONAL BASIS BUT THE SAME HAS BEEN CALCULATED ON THE BASIS OF THE TERMS OF THE LEASE ENTERED INTO BETWEEN THE PARTIES AND AS PER RATE AGREED UPON BETWEEN THE PARTIES. TH EREFORE, THE ITA NO. 582 TO 584/JP/2016 & 332/JP/2017 DCIT VS. M/S HARSHVARDHAN LAND LTD., JAIPUR 6 CONTENTION OF THE ASSESSEE THAT THE INTEREST INCOME CANNOT BE CHARGED TO TAX ON NOTIONAL BASIS IS NOT ACCEPTABLE AS IT WA S A REAL INCOME AND NOT NOTIONAL INCOME. FURTHER, PART OF THE TOTAL INT EREST TO BE RECEIVED DURING THE A.Y. 2010-11 WAS RECEIVED BY THE ASSESSE E TO THE EXTENT OF RS. 46,42,000/- AND THE AO HAS MADE THE ADDITION ON LY OF THE BALANCE AMOUNT OF RS. 49,94,000/-. SIMILARLY FOR THE SUBSEQ UENT ASSESSMENT YEARS THE ASSESSING OFFICER HAD MADE AN ADDITION ON LY ON ACCOUNT OF ACCRUED INTEREST FOR WHICH THE ASSESSEE WAS ENTITLE D AND HAD RIGHT TO RECEIVE FROM THE LESSOR. HE HAS RELIED UPON THE OR DER OF THE ASSESSING OFFICER. 4. ON THE OTHER HAND, THE LD. AR OF THE ASSESSEE HA S SUBMITTED THAT THE ASSESSEE OFFERED THE INTEREST INCOME FOR THE A. Y. 2010-11 TO THE EXTENT THE ASSESSEE RECEIVED THE AMOUNT FROM THE LE SSOR, HOWEVER, SUBSEQUENTLY IT WAS REVEALED THAT THE LESSOR HAS DE FRAUDED THE ASSESSEE AND THIS PROPERTY IN QUESTION WAS ALREADY MORTGAGED WITH THE KOTAK MAHINDRA BANK AGAINST THE LOAN AND THEREFORE THE BA NK TOOK OVER THE POSSESSION OF THE PROPERTY. THE LD. AR HAS FURTHER SUBMITTED THAT WHEN THE RECOVERY OF PRINCIPAL AMOUNT OF RS. 4,50,00,000 /- PAID AS SECURITY DEPOSIT AS WELL AS INTEREST WAS DOUBTFUL AS LESSOR WAS NOT HAVING CAPACITY TO PAY THE SAME AND THE ASSESSEE HAS EXERC ISED ALL ITS LEGAL ITA NO. 582 TO 584/JP/2016 & 332/JP/2017 DCIT VS. M/S HARSHVARDHAN LAND LTD., JAIPUR 7 REMEDY TO RECOVER THE AMOUNT THEN THE INTEREST AS P ER LEASE AGREEMENT AND LOAN AGREEMENT NOT RECOVERABLE AND NOT RECEIVED BY THE ASSESSEE CANNOT BE CHARGED TO TAX AS INCOME OF THE ASSESSEE. HE HAS FURTHER SUBMITTED THAT THE ADVANCE CHEQUES GIVEN BY THE LES SOR FOR PAYMENT OF INTEREST GOT DISHONORED AND THERE WAS LEAST POSSIBI LITY OF RECOVERY OF AMOUNT DESPITE THE ASSESSEE FILED A COMPLAINT U/S 1 38 OF NEGOTIABLE INSTRUMENT ACT. THE LD. AR HAS THUS CONTENDED THAT WHEN THESE FACTS OF DISHONORED OF CHEQUES AND NON RECOVERY OF THE AMOUN T AS WELL AS THE COMPLAINT FILED BY THE ASSESSEE ARE NOT IN DISPUTE THEN THE INTEREST ON THE DEPOSIT IS NOT A REAL INCOME TO BE TAXED AS THE RECOVERY OF THE PRINCIPAL AMOUNT ITSELF IS DOUBTFUL. THE ASSESSEE T HOUGH FOLLOWING ACCRUAL SYSTEM OF ACCOUNTING, HOWEVER, EVEN IN ACCR UAL SYSTEM OF ACCOUNTING ANY INCOME CANNOT BE RECOGNIZED UNTIL TH ERE IS REASONABLE CERTAINTY TO ITS REALIZATION. WHEN THERE IS BLEAK C HANCE OF RECOVERY OF INTEREST AS WELL AS ADVANCE FROM THE LESSOR THEN NO INCOME IN THIS REGARD CAN BE BROUGHT TO INCOME TAX. THE LD. AR HAS FURTHER CONTENDED THAT THE ADVANCE HAS BEEN SUBSEQUENTLY WRITTEN OFF IN THE ASSESSEES BOOKS IN THE YEAR 2014-15 AS THE SAME WAS NOT RECOV ERABLE AND THE ASSESSING OFFICER HAS ACCEPTED THE WRITTEN OFF THES E ADVANCES OF RS. 4,50,00,000/-. HE HAS ALSO REFERRED TO THE ACCOUNTI NG STANDARD-9 AND ITA NO. 582 TO 584/JP/2016 & 332/JP/2017 DCIT VS. M/S HARSHVARDHAN LAND LTD., JAIPUR 8 SUBMITTED THAT AS PER PARA 9 OF ACCOUNTING STANDARD -9 THE RECOGNITION OF REVENUE REQUIRES THAT IT IS MEASURABLE AND ALSO THE ASSESSEE IS ABLE TO COLLECT WITH REASONABLE CERTAINTY. IF IT IS LACK ING THE CERTAINTY OF COLLECTION AT THE TIME OF RAISING ANY CLAIM, THE RE VENUE RECOGNITION HAS TO BE POSTPONED TO THE EXTENT OF UNCERTAINTY INVOLV ED. THUS, THE LD. AR HAS CONTENDED THAT THE INCOME TAX ONLY BE LEVIED ON REAL INCOME AND NOT NOTIONAL INCOME. NO TAX CAN BE CHARGED OF NOTIO NAL INTEREST INCOME IN THE CASE OF THE ASSESSEE WHEN IT IS QUITE CLEAR THAT NEITHER THE ADVANCE NOR INTEREST INCOME IS RECOVERABLE. IT IS S ETTLED LAW THAT THE INCOME TAX CANNOT BE LEVIED ON HYPOTHETICAL INCOME. IN SUPPORT OF HIS CONTENTION HE HAS RELIED UPON THE FOLLOWING DECISIO NS. CIT VS. SHOORJI VALLABHADAS & COMPANY 46ITR 144 (SC ) GODHRA ELECTRICITY CO. LTD. VS. CIT 225 ITR 746 (SC ) CIT VS. EXCEL INDUSTRIES LTD. 358 ITR 295 (SC) CIT VS. EASTERN INVESTMENT LTD. 213 ITR 334 (CAL.)( HC) CIT VS. MAHAVIR CO. (P) LTD. 206 ITR 68(RAJ.)(HC) 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE ASSESSEE HAS ENTERED INTO L EASE AGREEMENT WITH M/S R.L. VERMA & SONS (HUF) DATED 19.08.2009 WHEREB Y THE ASSESSEE CLAIMED TO HAVE TAKEN ON LEASE THE PROPERTY ADMEASU RING 3650 SQ. FT. ITA NO. 582 TO 584/JP/2016 & 332/JP/2017 DCIT VS. M/S HARSHVARDHAN LAND LTD., JAIPUR 9 AT 9 TH FLOOR, DR. GOPAL DAS BHAWAN, BARAKHAMBA ROAD, NEW DELHI. THE PARTIES HAVE ALSO ENTERED INTO A LOAN AGREEMENT IN RESPECT OF A SUM OF RS. 4,50,00,000/- PAID BY THE ASSESSEE TO THE LESSO R BEING SECURITY DEPOSIT ON WHICH AN INTEREST @ 2.92% P.M. WAS PAYAB LE TO THE ASSESSEE. THE ASSESSING OFFICER HAS NOT DISPUTED TH IS FACT THAT THE PROPERTY IN QUESTION WAS MORTGAGED BY THE LESSOR WI TH THE BANK AGAINST THE LOAN AVAILED AND THEREFORE THE PROPERTY WAS NOT FREE FROM LIEAN/CHARGES. HOWEVER, THE ASSESSEE HAS NOT PURCHA SED THE PROPERTY AND EVEN IF THE SAID PROPERTY WAS MORTGAGED WITH TH E BANK SO LONG THE PROPERTY IS NOT PHYSICALLY TAKEN OVER BY THE BANK T HE ASSESSEE RIGHT OVER THE PROPERTY AS A LESSEE WAS NOT AFFECTED. IT IS ALSO UNDISPUTED FACT THAT AFTER THE INITIAL PAYMENT OF INTEREST THE CHEQ UES ISSUED BY THE LESSOR FOR THE SUBSEQUENT PAYMENT OF THE INTEREST G OT DISHONORED WHEN PRESENTED FOR ENCASHMENT. THE ASSESSEE TOOK LEGAL A CTION BY FILING A COMPLAINT U/S 138 OF NEGOTIABLE INSTRUMENT ACT. THU S, IT APPEARS THAT THE INTEREST AMOUNT THOUGH ACCRUED TO THE ASSESSEE AND THE ASSESSEE HAD ALL RIGHTS TO RECOVER IT FROM THE LESSOR WAS NO T RECEIVED AND IT WAS FULL OF UNCERTAINTY WHEN THE ASSESSEE WOULD FINALLY IS ABLE TO RECOVER THE INTEREST FROM THE LESSOR WHEN THE RECOVERY OF PRINC IPAL AMOUNT OF RS. 4,50,00,000/- ITSELF IS DOUBTFUL. THEREFORE, WHEN T HE AMOUNT OF INTEREST ITA NO. 582 TO 584/JP/2016 & 332/JP/2017 DCIT VS. M/S HARSHVARDHAN LAND LTD., JAIPUR 10 WAS NOT ACTUALY RECEIVED BY THE ASSESSEE AND THERE WAS A VERY BLEAK CHANCE OF RECOVERY OF THE SAID AMOUNT OF INTEREST A S WELL AS PRINCIPAL AMOUNT THEN THE INTEREST WHICH IS ACCRUED AS PER TH E LEASE DEED AND LOAN AGREEMENT WOULD NOT BE REGARDED AS THE INCOME OF THE ASSESSEE SO LONG THE RECOVERY OF THE SAME IS UNCERTAIN. WE F URTHER NOTED THAT FOR THE A.Y. 2014-15 THE ASSESSEE HAS CLAIMED WRITE OFF THE PRINCIPAL AMOUNT AND THE ASSESSING OFFICER WHILE PASSING THE ORDER U/S 143(3) WHICH IS PLACED AT PAGE 123 & 124 OF THE PAPER BOOK S HAS NOT MADE ANY DISALLOWANCE OR ADDITION. THOUGH ASSESSMENT ORD ER IS VERY BRIEF AND ACCEPTED THE TOTAL INCOME BEING LOSS DECLARED BY TH E ASSESSEE HOWEVER, ONCE THE CLAIM OF THE ASSESSEE HAS NOT BEEN DISPUTE D BY THE AO FOR THE A.Y. 2014-15 THEN IT AMOUNTS TO ACCEPTING THE FACT THAT THE RECOVERY OF THE PRINCIPAL AMOUNT ITSELF IS DOUBTFUL AND THEREFO RE THE INTEREST ON THE SAID AMOUNT CANNOT BE RECOGNIZED AS INCOME OF THE A SSESSEE AS IT IS ONLY A RIGHT TO RECEIVED BUT IT IS NOT CERTAIN TO B E RECEIVED BY THE ASSESSEE SO LONG THIS RIGHT TO RECEIVE THE INTEREST IS NOT GOING TO BE MATERIALIZED IT WILL NOT RESULT ANY INCOME AND CANN OT BE TAXED AS INCOME OF THE ASSESSEE. HENCE, EVEN IN THIS CASE THE ASSES SEE IS FOLLOWING THE ACCRUAL SYSTEM OF ACCOUNTING THE INCOME IS ACCRUED ONLY ON THE POINT WHEN IT IS FINALLY TO BE RECEIVED BY THE ASSESSEE W ITH REASONABLE ITA NO. 582 TO 584/JP/2016 & 332/JP/2017 DCIT VS. M/S HARSHVARDHAN LAND LTD., JAIPUR 11 CERTAINTY AND ABSENCE OF CERTAINTY OF RECEIPT AND R ECOVERY OF THE AMOUNT CANNOT BE CLASSIFIED AS INCOME ACCRUED FOR T HE PURPOSE OF CHARGING TO INCOME TAX. THE HONBLE SUPREME COURT I N CASE OF CIT VS. EXCEL INDUSTRIES LTD. (SUPRA) HAS OBSERVED THAT THE PROBABILITY OR IMPROBABILITY OF REALIZATION OF THE INCOME BY THE A SSESSEE HAS TO BE CONSIDERED FROM A REALISTIC AND PRACTICAL POINT OF VIEW WHICH IS ONE TEST LAID DOWN BY THE HONBLE APEX COURT IN DETERMINING THE INCOME WHEN ACCRUED. ONLY A RIGHT UNDER THE AGREEMENT TO RECEIV E THE INTEREST BY THE ASSESSEE WITHOUT REASONABLE CERTAINTY OF REALIZATIO N OF THE SAME CANNOT BE BROUGHT TO INCOME TAX. HENCE, IN VIEW OF THE FAC TS AND CIRCUMSTANCES OF THE CASE WHEN THE REALIZATION OF T HE AMOUNT IS NOT CERTAIN THEN THE SAME CANNOT BE CHARGED TO INCOME T AX. ACCORDINGLY WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDERS OF THE LD. CIT(A). IN THE RESULT, ALL THE APPEALS OF THE REVENUES ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/11/2017 SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 22/11/2017. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: ITA NO. 582 TO 584/JP/2016 & 332/JP/2017 DCIT VS. M/S HARSHVARDHAN LAND LTD., JAIPUR 12 1. VIHYKFKHZ@ THE APPELLANT- DCIT, CENTRAL CIRCLE-3, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- M/S HARSHVARDHAN LAND LTD., HIND HO TEL BUILDING, CHAURA RASTA, JAIPUR/ C-7, PRITHVIRAJ ROA D, C-SCHEME, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 582 TO 584/JP/2016 & 332/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR