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TMI Blog2019 (3) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... were made clear further in clause 5.6 of the Supplementary Agreement, wherein it is stated that the payments made towards compensation as advance shall be treated and appropriated by the lessor as compensation from lessee for occupation of the property only upon procurement of the OC from MCGM. The assessee has not received approval from MOEF and OC from MCGM during the year under consideration. Further, during the year under consideration, the assessee has also not received any payment towards the compensation also. Hence we are of the view that the compensation amount or lease amount has not accrued to the assessee during the year under consideration, since the accrual of the same would depend upon the receipt of approvals referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfronted, the assessee submitted that, as per the terms of the contract, rent accrues to the assessee only from rent commencement date , which is determined as the next date to the day when the approval from Ministry of Environment Forests (MOEF) and Occupancy Certificate (OC) from Municipal Corporation of Greater Mumbai (MCGM) are received. It was submitted that both the approvals were not received by the end of the relevant financial year and hence no rental income has accrued to the assessee. The AO noticed that, as per supplementary agreement dt. 16-01-2012, the lessee is liable to pay an amount of ₹ 4.20 Crores per quarter as compensation up to the period, the approvals are received. The above said amount was to be paid before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. CIT(A) on this issue should be reversed. 7. Ld. AR submitted that the assessee has not received approval from MOEF and OC from MCGM till date and hence, the assessee does not have right to collect rent from the lessee. 7.1. With regard to compensation of ₹ 4.20 Crores per quarter, the Ld. AR submitted that the assessee had received some amount in the preceding year by way of compensation, but it did not receive any amount during the year under consideration by way of compensation. He further submitted that though the amount of ₹ 4.20 Crores is described as compensation, the various clauses of the supplementary agreement would make it clear that the said amount also accrues to the assessee from the Rent commenceme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Bench of the Tribunal. 8.1. However, from the assessment order we noticed that the AO has actually assessed the compensation amount under the head income from house property by holding that the compensation amount is payable to the assessee till the Rent commencement date . Accordingly, Ld. DR argued that the compensation shall take the character of rental income. However, on a perusal of supplementary agreement, we notice that the compensation has been agreed to be payable by the lessee to the lessor for the period prior to the rent commencement period . However, in clause 5.1 of the Supplementary Agreement, it is specifically stated that the compensation amount is payable only on the Rent Commencement period . It is furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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