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2021 (9) TMI 163 - HC - Income TaxComputation of Capital Gains - Accrual of receipt - Inclusion of amount (as part of sale consideration) retained in the Escrow Account for meeting liabilities and obligation - HELD THAT:- When we examine the Business Sale Agreement, it is not disputed by the parties that the full and final consideration after having agreed upon the full and final consideration, the parties agreed to retain a particular amount of money in an Escrow account which cannot be construed to take away the case of the assessee from the expression 'accrued' occurring in Section 48. Conduct of the assessee and the purchaser in retaining a particular amount of money in the Escrow account cannot take away the amount from the purview of full consideration received/accruing in favour of the assessee for the purpose of computation of capital gains under Section 48. As going by the case as projected by the assessee, the amount of ₹ 3.25 Crores is retained in an Escrow account and the right of the assessee has not been disputed and that amount was retained to cover four contingencies which are part of the indemnity clause and assuming certain payoffs were to be made from the retention money that will not in any manner alter the full and total consideration received by the assessee pursuant to the Business Sale Agreement and if such is the factual position, undoubtedly, the entire sale consideration had accrued in favour of the assessee during the assessment year under consideration. Even assuming that certain payments have been made from the amount retained in the Escrow account, it will not make or in any manner reduce the cost of acquisition.Tribunal was right in allowing the appeal filed by the revenue and set aside the order passed by the CIT(A). - Decided against assessee.
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