2022 (8) TMI 458 - HC - Income Tax

Accrual of Income - ITAT and CIT-A held the said amount not received by the assessee during the year under consideration could not brought to tax in the hands of the assessee in the year under consideration - HELD THAT - Tribunal as observed that the learned departmental representative has brought out nothing on record to dispute the finding/observation arrived at by the Commissioner of Income Tax (Appeals). That apart, the tribunal also noted that the assessee has been following the Project Completion Method and another project namely, Poddar Project has been completed in the previous year relevant to the assessment year 2009-10 and the entire income from the said project actually accrued to the assessee in the assessment year 2009-10 and the same was accordingly recognised and offered to tax as could be seen from the assessment order dated 20th December, 2016. On perusal of the said assessment order the tribunal noted that the amount of Rs.50,00,000/- has already taxed in the hands of the assessee for the assessment year 2009-10 when the relevant projected was completed and the amount in question actually accrued to the assessee as income on the basis of Project Completion Method followed by it. Furthermore, the tribunal also re-examined the relevant clauses of the agreement entered into by the assessee with M/s. Dheeraj Promoters and also noted the various conditions imposed therein. No substantial question of law.

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Whether the Income Tax Appellate Tribunal erred in deleting income from the sale of development right.
3. Whether the Project Completion Method followed by the Assessee was correct.

Condonation of Delay:
The High Court considered the delay of 236 days in filing the appeal and perused the affidavit filed in support of the application for condonation of delay. The Court found sufficient cause for the delay and allowed the application, condoning the delay in filing the appeal.

Deletion of Income from Sale of Development Right:
The appeal was filed by the revenue against the order of the Income Tax Appellate Tribunal regarding the deletion of income from the sale of development right. The tribunal noted that the assessing officer failed to dispute the claim of the assessee that the amount was not actually received during the relevant previous year. The tribunal observed that the assessee followed the Project Completion Method, and the income in question accrued in a different assessment year. The tribunal examined the agreement with the promoter and conditions imposed, concluding that no substantial question of law arose for consideration. Consequently, the appeal was dismissed.

Project Completion Method:
The tribunal recognized that the income from the project accrued to the assessee in a different assessment year when the project was completed. The tribunal re-examined the agreement with the promoter and the conditions imposed therein. It was noted that the income had already been taxed in a subsequent assessment year based on the Project Completion Method. The High Court found no substantial question of law in this regard and dismissed the appeal.

In conclusion, the High Court dismissed the appeal as no substantial question of law arose for consideration, affirming the tribunal's decision regarding the deletion of income from the sale of development right and the correctness of the Project Completion Method followed by the Assessee.