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2012 (9) TMI 98 - HC - Income TaxReopening of assessment - assessment was completed on the basis of enhanced annual letting value - decree was for mesne profits - Held that:- The “right” of a plaintiff/owner seeking possession and mesne profits (which were to be calculated and decreed after an enquiry) as “only an inchoate right”. Such being the case, the assessee could not be faulted in not quantifying the potential mesne profits likely to accrue in the future - the newly introduced Section 25-B was clarificatory in nature, as it encapsulated the law existing (i.e. that receipts towards mesne profits should be taxed in the year of their receipt). There is no infirmity in the findings of the Tribunal that even on merits, the arrears of rent received by the assessee (as mesne profits) could not be brought to tax for the previous years, when they fell due. They could be brought to tax only during the year of receipt - as during the year of receipt, the assessee had shown the amount so received as capital because character was clearly as that of income, as is evident from the ruling as decided in P. Mariappa Gounder Versus Commissioner of Income-Tax [1998 (1) TMI 3 - SUPREME COURT] liability became ascertained only with the order of the trial court comes and not earlier - thus as the revenue had not however, re-opened the assessment in respect of the year of receipt of the amounts the reopening of assessment is not warranted - in favour of assessee.
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