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TMI Blog2013 (7) TMI 960X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the case of K.P. Varghese vs. ITO (1981 (9) TMI 1 - SUPREME Court). It is an established legal proposition that as per the provisions of capital gain, the amount can be brought to tax either on receipt basis or accrual basis. As regards the decision of the Supreme Court in the case of CIT vs. George Henderson & Co. Ltd and the decision of the ITAT in Mrs. Alpana Piramal case relied on by the Ld.DR, it is our considered view that these decisions have no application as the ratios in the said cases are applicable when the dispute relates to adopting the full value consideration vis-a-vis the sale value consideration which is not the case of the AO in this instant case as the maximum cap provided in the agreement cannot be equated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecified amount in a deferred manner with the nomenclature of initial and deferred consideration being employed as a matter of convenience to the parties to the transactions of transfer in question. Accordingly, the AO reworked the share of the assessee in the alleged total consideration accrued to the transferors by clubbing the initial consideration and deferred consideration and thereby assessed the capital gain at ₹ 4,91,94,923/- as taxable in the hands of the assessee. 4. On appeal, the Ld.CIT(A) deleted the impugned addition made by the AO as the deferred gain could not be taxed as the gain which was not received or accrued to the assessee since the impugned income is only notional in nature. Aggrieved by the impugned d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y not get the deferred consideration, the Ld. Senior Counsel has demonstrated how the deferred consideration has to be worked according to the provisions of the agreement. Hence, as per the provisions of capital gain, the amount can be brought to tax either on receipt basis or accrual basis. Since there is no certainty of receiving the amount and also quantum of the amount is not known, merely bringing the maximum cap provided in the agreement to tax is not tenable and the Ld.CIT(A) is rightly deleted the impugned addition. 6. We have heard both the parities and perused the material on record. The perusal of the provisions of the agreement indicates that the amount of ₹ 20 crore is the maximum amount that could be received by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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