Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 937 - AT - Income TaxIncome assessable under the head ‘profits /gains from business / profession’ - liquidated damages - sum of ₹ 2,50,00,000/- received by it from M/s. Prestige Estate Projects P. Ltd Held that:- There is no communication from M/s. PEP on any of the aspects mentioned in the letter. Fundamental for a valid contract is either a written or an oral agreement. Above letter is not an agreement. At the best it is only a conditional offer. Not only is there any acceptance from M/s. PEP, there is a communication dt.07.11.2012 from M/s. PEP to the AO reproduced by us in para 2 above which points to an opposite position. Thus claim of the assessee what was received by it from M/s. PEP, in excess of what was paid by it, was only a compensation in the capital field falls flat. Letter dt.31.05.2006 written by assessee to M/s. PEP also clearly show that its intent was nothing but to do the business of construction and selling land after development and construction. Thus the amount of ₹ 4.95 crores paid was nothing but an advance for acquiring the stock for its real estate development venture. Instead of getting the developed areas as desired, what assessee received was a sum of ₹ 7.45 crores from M/s. PEP. Surplus in our opinion had all the features of business profit, since assessee’s adventure or foray into real estate development was only a trading or business venture. The back ground of the transaction, where partners of assessee firm had already done similar business with M/s. PEP, corroborates this further. - Decided against assessee.
|