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2022 (4) TMI 902 - AT - Income TaxNature of receipt - compensation money received - whether the said transaction was purely forfeited security deposit in the nature of revenue receipt and did not come under the extinguishment or relinquishment envisaged by Sec.2( 47) ? - HELD THAT:- Clear and unequivocal terms of the proposal was respected by accepting the offer, and the amount of ₹. 15 crores was paid to the assessee, during assessment year 2011-12. However, even thereafter, the assessee claims that she continued to classify the same as 'refundable security deposit' and the company continue to claim the same as 'recoverable advance'. On perusal of the hard copies of the Returns of Income of the assessee for subsequent years i.e. assessment years 2012-13 to 2015-16, the ld. CIT(A) noticed that even upto assessment year 2015-16, the amount in question has not been offered to tax by the assessee. This also completely contradicts the stand taken by the assessee in this regard. As assessee has advanced 100% of the cost price of the property of construction of 35,000 sq.ft. IT park project, we find that the ld. CIT(A) has correctly held that the amount of ₹.7 crores (the receipt of ₹.15 crores Less ₹.8 crores paid by the assessee to the developer) was liable to tax as Long Term Capital Gains in the hands of the assessee, subject to indexation for the relevant years and rightly directed the Assessing Officer to bring to tax the Long Term Capital Gains computed by treating ₹.15 crores as 'Sale consideration' and ₹.8 crores as 'Cost of acquisition'. Thus, the ground raised by the assessee is dismissed. Alternative plea raised before the ld. CIT(A) that if at all it were to be assessed as an income, it could be done only in the year when the Developer squares up the transaction in its books - CIT(A) has clearly mentioned in the appellate order at page 49 that the ld. CIT(A) has called for and perused the hard copies of the returns of income of the assessee for subsequent years i.e., assessment years 2012-13 to 2015-16, the ld. CIT(A) noticed that even upto assessment year 2015-16, the amount in question has not been offered to tax by the assessee. In view of the above facts, we are of the opinion that the ld. CIT(A) has rightly rejected the alternative plea of the assessee and the thus, the ground raised by the assessee is dismissed. Income has to be taxed under the head “income from other sources”- CIT(A) has rightly directed the Assessing Officer to bring to tax the Long Term Capital Gains computed by treating ₹.15 crores as 'Sale consideration' and ₹.8 crores as 'Cost of acquisition' considering the fact that the assessee has advanced 100% of the cost price of the property of construction of 35,000 sq.ft. IT park project, the ground raised by the Revenue is dismissed.
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