Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2018 (10) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (10) TMI 1514 - HC - Income TaxRectification of mistake - Diversion of income under a revocable transfer or arrangement - accrual of income - CIT(A) and ITAT confirmed the additions invoking section 60 - transfer of "income" without the "transfer of the asset" - Held that:- It is evident that the agreement is not indefinite; it confers a right to receive rentals, for which a consideration of ₹ 75 crores was paid. The agreement could be rescinded, after 3 years, by giving back the deposit; the arrangement could not exceed 10 years in all. Clause 4 stated, significantly, that AHR’s tenants were deemed to be that of ADI. In this case, the express terms of the agreement clearly showed that the arrangement was finite and also revocable (by one year’s notice and refund of deposit). Pertinently, the judgments that the petitioner now relies on, apart from Dalmia [1999 (4) TMI 4 - SUPREME COURT](i.e Rungamatee Tea & Industries [1991 (7) TMI 9 - CALCUTTA HIGH COURT], Poddar Cement[1997 (5) TMI 2 - SUPREME COURT], Arvind Narottam [1988 (8) TMI 2 - SUPREME COURT]) were all cited and considered by the CIT (A) after the AO’s order, on remand in the earlier round. This court is also of the opinion that like in Dalmia, the facts in Rungamatee, clearly showed that the transaction by which the assets were handed over possession were not just for their management, but preparatory to their sale. The purchaser took possession of the assets from the owner and managed them till conveyance, the subsequent year. This court is of opinion that the main judgment of the ITAT took note of the authority in Poddar Cement (supra). The ITAT also had before it, the reasoning of the CIT (A) who had noticed all the judgments cited by the assessees – which found place in the written note submitted to the ITAT in their appeal. Therefore, it cannot be said that the tribunal ignored or overlooked material facts or law. Furthermore- perhaps crucially, the lower authorities concurrently found that ADI, despite reporting the lease income in its hands, declared loss for the year under consideration in its return whereas AHR declared profits. In these circumstances, their view was that the arrangement was made to avoid incidence of tax in AHR’s hands. No infirmity in the impugned orders of the ITAT,
|