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2024 (1) TMI 221 - ANDHRA PRADESH HIGH COURTIncome from other sources - interest free refundable security deposit for due completion of the project by the developer - argument of the Standing Counsel is that the said amount was received by the MD on behalf of the petitioner and retained by him though it was stated to be the sum held as security deposit against the construction of commercial complex and which work has not yet started - HELD THAT:- As discernable from the Development Agreement that the disputed amount of Rs. 50.00 lakhs is only an interest free security deposit lying in the hands of the petitioner. The Department, it appears, proposes to treat it as a revenue receipt on the main ground that the said amount was not shown by the petitioner in its accounts as a liability. However, the Department does not appear to challenge the genuinity of the Development Agreement. Considering all these aspects, we are of the view that it is not apposite on the part of the Department to treat the aforesaid amount of Rs. 50.00 lakhs as receipt for the AY 2019-20 to impose tax. Accordingly, this Writ Petition is allowed with a direction that the petitioner shall hereafter show the amount of Rs. 50.00 lakhs as interest free security deposit in its books of accounts till the same is refunded to the builder viz., M/s. Royal Mindz Infra Pvt. Ltd. and respondent Department is directed to drop the proceedings against the petitioner to collect tax in respect of the said amount.
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