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2012 (9) TMI 804 - AT - Income TaxAddition made on account of alleged consideration in the form of constructed area as capital gain - assessee company, owner of two plots of land 256 & 257, sold development rights in respect of plot no 257 to a builder for total consideration of 16.11 crores and construction of 18000 sq.ft. of carpet area for the benefit of the assessee on plot No. 256 for the benefit of the assessee - capital gain arising from sale of plot No. 257 was offered to tax by taking into account the consideration of Rs.16.11 crores and constructed area of 18,000 sq.ft. was not taken into account - assessee contended that before said Builders could start the construction work, the entire property comprising of plot No. 256 and 257 was sold to a third party M/s F Ltd. by a tripartite conveyance deed for a total consideration of Rs.29.11 crores - assessee thus never received the constructed area of 18,000 sq.ft. and whatever was received as additional consideration of Rs.13 crores (29.11 crores - 16.11 crores) was offered to tax in AY 2008-09 as capital gain Held that:- Consideration in the form of constructed area of 18,000 sq.ft. as agreed in terms of the development agreement was not actually accrued to the assessee as a result of subsequent developments/events going by the doctrine of real income and the same, therefore, cannot be taken into account for the purpose of computation of capital gain arising from transfer of capital asset as pet the development agreement. It is also worthwhile to note here that the total consideration actually received by the assessee from transfer of its entire property comprising of plot No. 256 and 257 as per the tripartite conveyance deed was Rs.29.11 crores and the same having been entirely offered to tax in AYs 2007-08 and 2008-09, there is no loss to the Revenue on this count as rightly contended by assessee. Addition made is therefore deleted - Decided in favor of assessee. Expenditure incurred by the assessee company on payment of premium for purchase of its own shares from warring group of shareholders - revenue or capital expenditure - Held that:- Tribunal in case of Echjay Industries (P) Ltd (1987 (12) TMI 68 - ITAT BOMBAY-D) has held that even if it is assumed that an enduring benefit has been obtained, such enduring benefit is not relatable to fixed capital structure of the assessee company because it has neither increased the assessee's assets nor the assessee company could be said to have acquired any right of income yielding nature. Amount in question was paid to secure peace and harmony and smooth management of the company in the interest of business and the amount paid for this purpose was on revenue account. In view of aforesaid it is held that impugned expenditure is revenue in nature and the same being wholly and exclusively incurred for the purpose of its business, is allowable as deduction. Dis-allowance stands deleted - Decided in favor of assessee
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