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2014 (9) TMI 354 - AT - Income TaxUndisclosed income in block assessment - Whether the amount being consideration received on surrendered of 1400 sq.ft. area from out of 3000 sq.ft. area in the building proposed to be constructed was rightly treated as undisclosed income in the block assessment – Held that:- The assessee has disclosed the amount in its block return of income - Though the assessee is not estoppal from taking a legal stands, the facts remains that the AO cannot be found fault with for accepting the return of income of the assessee – assessee contended that the authorities were in know of the transaction prior to the search and hence the transaction in question cannot be brought tax in the block assessment, does not have any merit for the reason that the assessee filed the regular return of income for the A.Y. 1997-98 on 12.01.1999, which is after the date of search and in this return of income, she did not declare the receipt while declaring this amount in her block return of income – Decided against assessee. Accrual of income - Compensation received for the loss of income – cash basis of accounting - Held that:- The amount was never paid to the assessee and the fact has been recorded in the agreement dated 25.09.2008 – assessee contended that she follows the cash system of amount and the amount was taxable only on its receipt - the assessee has not received this amount or the interest till date - assessee as admitted that he was following the cash system of accounting and hence the amounts in question cannot be taxed as the same was not received - the assessee has never received the amount of ₹ 2.90 crores and as he also could not controvert the claim of the assessee, that she follows the cash system of accounting and also the fact that the assessee had offered to tax the balance consideration of ₹ 8.00 crores in the year 2009-10 for the transfer of the property at 25-A, Akbar Road, New Delhi in the A.Y. 2009-10 - the amount of ₹ 2.90 crores and interest thereon cannot be taxed in the hands of the assessee during the block period - No addition can be made on account of accrued interest thereon - as regards, the amount which pertains to undisclosed interest income on IDBI bonds for the AYs 1997-1998 to 1999-2000, no arguments were advanced and hence the findings of the FAA are confirmed – Decided in favour of assessee.
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