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2023 (10) TMI 1017 - AT - Income TaxExpenses/income for relevant assessment year - Principal of tax jurisprudence - income from other sources and the expenses disallowed by observing that the transaction was complete in FY 2006-07 and therefore the inventory stock was to be amended accordingly in that year itself. HELD THAT:- As entries in the books of accounts are not determinative of true nature of transaction and nature of income as per preposition rendered in the case of Kedarnath Jute Mfg. Co. Ltd. [1971 (8) TMI 10 - SUPREME COURT] It is also a well established and accepted principal of tax jurisprudence that the right income should be taxed in the right hands, under right head of income in the right year of assessment. Undisputedly, in the present case the transaction of sale of property was undertaken by the assessee during FY 2006-07 pertaining to AY 2007-08 but the assessee did not recorded the entry in the books of accounts and continuously shown the property in the balance sheet till AY 2012-13. Hence, the books of accounts of assessee were not revealing correct factual position of properties owned by assessee till 2012-13. As noted that as per assessee during assessment proceedings of AY 2012-13 AO issued notice u/s. 133(6) to the purchaser and in response to said notice the purchaser company submitted that “the company has not purchase any property from the above party (the assessee) during the financial year 2011-12”. Copy of sale deed available at pages 108 to 155 shows that the assessee company sold the land on 21.03.2007 which falls within the ambit of AY 2007-08 and as per recital in the sale deed the assessee had received sale consideration also at the time of execution and registration of sale deed on 21.03.2007. We note that despite the fact that during AY 2012-13 no transaction of sale of property/land was undertaken by the assessee but the assessee recorded book entries pertaining to the sale of property/land transaction, which was in fact, undertaken during AY 2007-08, in the books and financial statements for AY 2012- 13 by passing books entries only. As following the principal of tax jurisprudence that the right income should be taxed in the right hands, under right head of income in the right year of assessment, we direct the Assessing Officer to tax the income/profit accrued to the assessee from sale of land/property in AY 2007-08. Grounds of assessee are partly allowed.
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