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2017 (8) TMI 411 - AT - Income TaxAccrual of income - Addition on additional consideration as accrued income during the year alongwith accrued interest - scope of the agreement - postponement of revenue - year of assessment - Held that:- In the year under appeal there was order of the Revenue Minister. But,order of the Minister was not one of the conditions of the agreement. The assessee had challenged the valuation adopted by the Revenue authorities and as per the provisions of law the assessee had challenged the valuation. In our opinion, the order of the Revenue Minister cannot be the deciding factor for determining the year of assessment in which disputed amount could be taxed. Therefore,we hold that the FAA was not justified in taxing the additional consideration of ₹ 25 crores in the year under consideration. Reversing his order,we decide the first part of the first ground of appeal in favour of the assessee. As far as interest portion we find that the assessee was consistently following a particular method of accounting and same had not been rejected by the AO. It has shown the interest income in the year of receipt. Here,we would like to mention that the ‘computation of total income’,u/s.5 of the Act has to made of real income and not of any hypothetical income. No real income had accrued to the assessee during the year under appeal under the head ‘interest income’ considering the method of accounting adopted by it.The assessee had offered the entire interest income in AY.2012-13 i.e. the year of actual receipt. Decided in favour of the assessee. Carry-forward and set off of unabsorbed depreciation - Held that:- As decided in case of General Motors India Pvt. Ltd.[2012 (8) TMI 714 - GUJARAT HIGH COURT] unabsorbed depreciation available to an assessee on 1st day of April 2002 (A.Y. 2002-03) will be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001, thus once the Circular No.14 of 2001 clarified that the restriction of 8 years for carry forward and set off of unabsorbed depreciation had been dispensed with, the unabsorbed depreciation from A.Y.1997-98 upto the A.Y.2001-02 got carried forward to the assessment year 2002-03 and became part thereof, it came to be governed by the provisions of section 32(2) as amended by Finance Act, 2001 and were available for carry forward and set off against the profits and gains of subsequent years, without any limit whatsoever - Decided in favour of assessee. Addition made under the head payment of municipal taxes - Held that:- It was the duty of the developer to clear the municipal dues and it paid the disputed amount in subsequent year.The assessee had no role in the entire transaction-it had to receive the money from the developer and had to pay to municipal authorities.It is not denied by the department that it was a case of double addition.Considering the peculiar facts and circumstances of the case we are of the opinion that the FAA was not justified in confirming the addition when the assessee had not received the disputed amount during the year under appeal - Decided in favour of assessee.
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