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2022 (12) TMI 403 - HC - Income TaxUpfront premium amortization - land has been given on long lease/license for 30 years - Entitlement to amortize and offer 1/30th of the amount received as income every year - Whether consideration amount received in respect of an immovable property, either while conveying property or granting long license/lease shall be a capital receipt? - whether tribunal is justified in holding that the entire upfront premium constituted the income for the current year? - HELD THAT:- The issue involved in "Sindhurani Chaudharani" [1957 (4) TMI 3 - SUPREME COURT] is payment of 'Salami' and in this case it is upfront premium which non refundable. Therefore the matter requires reconsideration in the hands of the Assessing Officer referring to relevant facts and law. According to Shri.A.Shankar, if the accounting is as per AS-19 and even as per general principles of accounting, the upfront premium can be amortized on the principles of matching concept because the assessee has to provide various services. We have also noticed that Comptroller And Auditor General in his report has held that premium can be amortized. In our considered opinion, the matter requires reconsideration in the hands of the Assessing Officer. Hence, matter is remitted to the file of the Assessing Officer for fresh consideration in accordance with law after providing an opportunity of hearing to the assessee.
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