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2006 (9) TMI 135 - HC - Income TaxTrading additions - colonization business - Amount received by the assessee-colonizer by way of advances or earnest money as a result of agreements to sell plots, did not constitute revenue receipts in its hands, as no sale deed had yet been executed? - HELD THAT:- In the present case, the Tribunal held that unless the title of the assessee was extinguished, the land was to be treated to continue as stock-in-trade of the assessee and the amounts received on account of sale of plots were not trading receipts. In view of law laid down by the hon'ble Supreme Court in CIT v. Podar Cement P. Ltd.[1997 (5) TMI 2 - SUPREME COURT], this view cannot be approved. Once the possession of plots was transferred and the transferees even made constructions, the dominion over the property passed on to the transferees and the amounts received by the assessee could not be held to be mere deposits and property transferred could not be held to be stock-in-trade of the assessee. The amount received by the assessee had, thus, to be revenue receipt in its hands. Thus, we answer the question in favour of the Revenue and against the assessee - Reference is disposed of accordingly.
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