9911796707
TMI Blog2023 (4) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... r a total sell consideration of Rs. 25 crores and an amount of Rs. 6 crores was received as advance/ part payment by way of 4 demand drafts issued by IDBI Bank. Since, the buyer failed to pay the balance amount in complying with the conditions of the agreement, an amount of Rs. 6 crores paid as advance sale consideration was forfeited by the assessee. Thus Amount of 6 crores received by the assessee will not fall within the ambit of section 56(2) Admittedly money has been received in pursuance to the agreement to sell which could not be materialized due to non performance of contract by the buyer. Therefore, it cannot be said that the amount was received by the assessee without any consideration. Delhi High Court in the case of CIT vs Meera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was received and forfeited, but ultimately the said amount of Rs. 6 crores has been forfeited due to failure on the part of the buyer. The premises was continued to be used by the assessee for its business purposes. Therefore, in our opinion the depreciation is allowable to the assessee, therefore, we find no error in the order of the ld CIT(A) on the said issue. Accordingly we dismiss the Ground No.3. X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 crore wherein the assessee received advance sale consideration of Rs. 6 crore by way of bank demand draft. Since, the buyer failed to pay the balance sale consideration of Rs. 19 crore even after issuing legal notice, the advance money of 6 crore was forfeited by the assessee. The A.O. brought to assess the amount of Rs. 4,91,13,697/- (6,00,00,000/- (-) 1,08,86,303/-) as income from other sources invoking of Section 56 (2) (vii) of the Act. The A.O. was of the opinion that the excess receipt of Rs. 4,91,13,697/- over and above Rs. 1,08,86,303/- cannot be treated as capital receipt. He was of the opinion that Section 51 of the Income Tax Act provides for taxation of advance money forfeited to the extent of cost of acquisition/WDV of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not provide taxation of forfeited capital receipt till Assessment Year 2014-15. 8. We have heard the parties perused the material available on record and gave our thoughtful consideration. 9. Ground No. 1 raised by the revenue is with regard to excess money of Rs. 6 crores could not be taxed under the head "Capital Gain" as there were no transfer of any asset as contemplated u/s 2(47) of the Act, therefore, the same has to be taxed under the head "income from other sources" u/s 56(2)(ix) read with section 56(1) of the Act. 10. It is not in dispute that assessee had entered into agreement to sell of the property as buyer VA Realcon Pvt. Ltd on 07.12.2013 for a total sell consideration of Rs. 25 crores and an amount of Rs. 6 crores was rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds fifty thousand rupees, the whole of the aggregate value of such sum". 12. Admittedly money has been received in pursuance to the agreement to sell which could not be materialized due to non performance of contract by the buyer. Therefore, it cannot be said that the amount was received by the assessee without any consideration. 13. In CIT vs Kailas Rubber & Company Limited (1966) (60 ITR 435) (SC), Supreme Court have held that any amount received against Sale of Capital Asset is a Capital Receipt and not a Revenue Receipt, hence can be subjected to Capital Gain only, it cannot be taxed under the head "income from other sources". Income from other sources chargeable in section 56 of the Act does not provide taxation of for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld CIT(A) in deleting the addition made by the A.O. and we find no merit in the Ground No.1 of the Revenue. Accordingly, ground No. 1 is dismissed. 17. The department in ground No. 2 claimed that the assessee has not proved the genuineness and creditworthiness of the buyer ie: VA Realcom. It is found from the assessment order that at no pint of time the AO had doubted the genuinity of the transaction and no deficiency had been pointed out in the agreement to sell. Admittedly the amount has been received by the assessee as sale consideration by way of demand draft issued by the bank. Even during the appellate proceedings the ld CIT(A) has specifically made observation regarding genuineness of the transaction which read as under:- "it is o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
