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2019 (5) TMI 685 - ITAT COCHINDisallowance of enhanced compensation paid to land owners - payment on the basis of the decision of the High Court and claimed as general expenses - according to the AO the assessee is entitled to recover it from the lessee from whom the loan was taken thus allowed payment of enhanced compensation to the extent of amount recovered from the lessee which was offered as income and the balance compensation payable was not allowed by AO - CIT-A deleted the disallowance - HELD THAT:- Neither the AO nor the CIT(A) has examined the lease agreements based on which the assessee is entitled to recover the enhanced amount of compensation from the lessee. Without examining the lease agreement entered into by the assessee with the lessee, it is not possible for us to hold that to what extent the assessee is entitled for the claim of enhanced compensation as an expenditure. If there is enforceable clause in the lease agreement based on which the property was leased out by the assessee, the assessee can recover the amount of enhanced compensation from the lessee. Hence, the amount to the extent received or receivable from the lessee is to be brought to tax. I When the assessee is claiming the payment of enhanced compensation as an expenditure, it is incumbent on the part of the assessee to offer the recoverable amount of compensation from its lessee. The assessee cannot pick and choose only the claim of expenditure towards payment of enhanced compensation and cannot withhold the offering of receipt of enhanced compensation from its lessee. Hence, it is appropriate to remit the issue to the file of the AO to examine the relevant lease agreement entered into by the assessee with its lessee and decide thereupon. However, we make it clear that if the assessee offered the receipt of enhanced compensation from its lessee in any other assessment year, there cannot be double taxation in these years. With this observation, we remit this issue to the file of the Assessing Officer for fresh consideration. Appeals filed by the Revenue are partly allowed for statistical purposes.
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