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2014 (11) TMI 316 - AT - Income TaxNature of receipt - Non accounting of capital receipt - Addition of amount received from M/s Alokik Township Corporation – Held that:- There was nothing to suspect the genuineness of the agreement - the view taken by CIT(A) cannot be accepted that the MOU was only a facade prepared to give the colour of “refundable advance” to the receipt of ₹ 3.00 crores - the assessee has received the impugned amount of ₹ 3.00 crores as advance from M/s ATC in pursuance of MOU entered between the assessee and M/s ATC – the advance is described as “refundable advance” in the MOU and the terms of repayment of advance are also provided - The tax authorities have not brought anything on record to show that the above said amount is not refundable at all - the ‘refundable advance’ of ₹ 3.00 crores received by the assessee constitutes capital receipt in the hands of the assessee, which is not liable to tax under any of the provisions of the Act - Non accounting of capital receipt, which is otherwise not taxable in pursuance of the provisions of the Act, may not have any immediate implication so far taxation is concerned - the assessee is liable to refund the advance amount in terms of MOU - The addition of balance amount is also liable to be deleted, since the MOU was genuine one and also a refundable advance – thus, the order of the CIT(A) is set aside and the AO is directed to delete the addition of ₹ 3.00 crores pertaining to the advance amount received from M/s ATC. Assessment of unaccounted cash received on sale of plots – Held that:- The AO has drawn certain inferences on the chart found during the course of survey - the assessee has shown that the computation made by the AO, if followed in some other cases, would give the selling rate of ₹ 3,950/- and ₹ 4000/- per Sq. yard - the AO has reached conclusions about the selling rate of plots only on surmises and conjectures without bringing any credible evidence on record – assessee rightly contended that mere receipt of advance would not give rise to any income element - the assessee had proposed to execute sale agreements only in the subsequent years after the receipt of necessary approvals, meaning thereby the assessee has received only advances during the year, which are liable to refunded – the AO was not justified in presuming that the assessee had received 30% of sale consideration as advance in the form of cash without accounting for the same - CIT(A) was not justified in confirming this addition, the addition is set aside - Decided in favour of assessee.
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