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TMI Blog2016 (9) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... DLF Ltd. and the assessee and the Memorandum of Understanding dated 06.12.2006 between M/s DLF Ltd., the assessee and CBDL indicate that the advances received by the assessee from M/s DLF Ltd. and CBDL were for sale of development rights. Since the assessee failed to sell any such rights in the two years in question, the advances received cannot be classified as income. - ITA 583/2016 & C. M. No. 29420/2016 - - - Dated:- 12-8-2016 - S. Ravindra Bhat And Deepa Sharma, JJ. For the Appellant : Mr.Zoheb Hossainn, Sr.Standing Counsel, Mr.Deepak Anand, Jr.Standing Counsel and Mr.Prashant Meharchandani, Advocate For the Respondent : Ms. Kavita Jha and Ms. Mehak Gupta, Advocates ORDER 1. The question of law sought to be urge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt of such amount could not be treated as income. It was precisely held that the method adopted by the assessee of treating income as having accrued at the point of sale of development rights, upon acquisition of license described the transaction and that treating the amount received prior to that event could not be brought to tax as income. The relevant discussion after noticing the ITAT s conclusions on this aspect are as follows: 13. The concurrent findings of fact of the CIT(A) and the ITAT affirm that the LOCs had not acquired any development rights during the concerned assessment years. In such a situation, it is inconceivable as to how the assessee could have acquired such rights from the LOCs, let alone transferring them to M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Related costs: Sale of development rights is recognized on accrual basis in the financial year in accordance with the terms of the agreements entered into with the customers . In the instant case, since no sale occurred, no income can be said to have accrued to the assessee.The assessee's submission that sale is deemed to have taken place when proper conveyance is executed, in the circumstances is sound. In the absence of any sale, the revenue‟s attempt to bring to tax the advances received by the assessee must also fail, given that such advances were not towards any income that the assessee was entitled to receive in the two assessment years. Indeed, the Business Development Agreement dated 02.08.2006 between M/s D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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