9911796707
TMI Blog2014 (6) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... managing an industrial park in Hyderabad. The assessee has developed an industrial park at Mindspace in Madhapur, Hyderabad comprising an integrated complex of commercial buildings which have been let out to various tenants. Cost incurred on the construction and development of the IT Park has been capitalized in the assessee's books of account under Fixed Assets. The assessee was allotted land by the Andhra Pradesh Government for development of the IT Park. Cost of the land was determined at Rs 54.57 crores, but was subject to a rebate as per the G.O. Ms 27 (ICT Policies 2002) issued by Govt of AP and clause 6.4 & 6.5 of Memorandum of Agreement entered with Govt of AP. The assessee is entitled to rebate on land cost of Rs 20,000/- per e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said release of bank guarantee constitutes a revenue receipt chargeable to tax in the hands of the assessee. 4. According to the AR, the Tribunal held that if a subsidy or grant is given to recoup revenue expenditure, it will take colour of a revenue receipt, if not, it would be a capital receipt. According to the AR, in the present case, it is an undisputed fact that the assessee is engaged in the business of real estate development and leasing of land and building and are the trading assets of the assessee. It is evident from the copy of the balance sheet filed by the assessee for the year ended 31/03/2006 as per Schedule VI-K, the assessee's total expenditure on land is Rs 1,610,805,902/- which is as follows and not charged to Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of land is recorded in the accounts. It is therefore submitted that the basis of the Tribunal's reasoning in para 10.2, that the assessee has debited the expenditure to the P&L Account and further drawing inference that the there would be adjustment of the subsidy against the amount payable and thereby coming to a conclusion that it is a revenue receipt is based on erroneous understanding of the facts. 7. The AR submitted that since the allotment of land and the price payable at the end of the specified period after factoring the notional subsidy is not recorded in the books of accounts, any reduction in such price by virtue of the basis of the Hon'ble Tribunal's reasoning that the sum of Rs 30,720,000 is a receipt, much less ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the assessee's counsel is that the assessee has not debited any expenses relating to the allotment of land under Schedule-K and the assessee incurred no cost for the land allotment. The expenses reflected in Schedule-K are in the nature of stamp duty, registration fee incurred for registration of title deed and bank guarantee commission. This does not tantamount to incurring of any expenditure towards allotment of land by the Government. Further, it was submitted that since the assessee has offered the gross amount on sale of land/ building/IT Park as revenue receipt for taxation purposes and there is no deduction of land cost from it, taxing the cost of the land once again amounts to double taxation. We find force in this argume ..... X X X X Extracts X X X X X X X X Extracts X X X X
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