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2020 (5) TMI 653 - AT - Income TaxAccrual of income - Addition on sale of development rights - Whether amount had accrued to the assessee on account of transfer of its rights in the property and therefore was liable to offer this amount for taxation as income from capital gains?- ‘transfer’ under section 53A of the Transfer of Property Act, 1872 - HELD THAT:- What was to be received by the assessee was from a joint venture, in which assessee itself was a participant, but, under the said arrangement, it was to be entirely funded by Shivalik Ventures Pvt Ltd. The essence of the arrangement was the performance of obligations by the assessee so far as the above obligations are concerned - while the assessee was to help the assessee get the development rights in favour of the joint venture, the payment was to be received by hum “as original developer appointed by the said societies” and this payment cannot be read in isolation with all its obligations under the joint venture arrangement. It was a composite agreement, and, irrespective of whether we look at the modifications or not, and all the terms of the agreement were to be read in conjunction of each other. When an assessee had an obligation to perform something, and the assessee had not performed those obligations nor does he even seem to be in a position to perform these obligations, it cannot be said that a partial payment for fulfilling these obligations can be treated as income in the hands of the assessee. The obligations under the agreement, as extracted above, have not been performed till date, as is the uncontroverted stand of the assessee. Clearly, therefore, the income in question never accrued to the assessee. When obligations of the assessee under the joint venture agreement are not yet performed, there cannot be any occasion to bring the consideration, for performance of such obligations, to tax. The very foundation of the impugned taxability is thus devoid of any legally sustainable basis. As regards the supplementary agreement, in our humble understanding, even if we are to disregard it, the fact remains that income could accrue only on performance of obligations under the joint venture agreement. In any case, it cannot be open to the AO to disregard the supplementary, or modification- whichever way one terms it, agreement, only because it’s result is clear and unambiguous negation of tax liability in the hands of the assessee. As to whether the amount is actually refunded or not, nothing turns on that aspect either. Just because the assessee does not pay the amounts to be paid by the assessee as income of the assessee. The taxability on account of what is alleged to be, transfer of development rights is wholly devoid of merits.- Decided in favour of assessee. Pronouncement of orders within 90 days - Covid-19 epidemic - Worldwide lockdown - HELD THAT:- Hearing in this case was concluded on 19th February 2020 but the order is being passed today on th day of May 2020, i.e. well after 90 days, but then given the extraordinary times that we are going through in these days of Covid 19 epidemic, the period of lockdown is required to excluded in computation of the 90 days. In support of this proposition we find support from a coordinate bench decision in the case of DCIT Vs JSW Ltd.[2020 (5) TMI 359 - ITAT MUMBAI]
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