2009 (3) TMI 410

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..... 0,000 received by the assessee was in the nature of revenue receipt or otherwise liable to tax?" 2. The facts, which lie in a narrow compass, are mentioned here in below: The assessee-firm owned a cinema building popularly known as Prem Prakash Talkies. It entered into an agreement of sale with M/s. Jaipur Mineral and Development Syndicate Private Limited ("JMDSPL") vide agreement dated December 30, 1968. As per the agreement entered into between the parties, the assessee-firm was to sell the property along with the shops, building and the land for a total consideration of Rs.17 lakhs. Out of which, Rs.15 lakhs were to be paid to the assessee-firm as an advance on the execution of the agreement, which amount was to be adjusted against the .....

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..... on of agreement of transfer of capital asset, the receipt does not bear the nature of capital gain either. The claim as advanced by the assessee was not accepted by the Inspecting Assistant Commissioner of Income-tax. The matter was again carried in further appeal before the Commissioner of Income-tax (Appeals). He also concluded that the receipt of compensation for non-performance of the contract would constitute receipt of income nature. He further held that there was no injury or destruction of the capital asset in any manner, only in which case, it would be a capital loss. According to him, it would be wrong to say that the amount does not come within the definition of "income". Thus, the orders passed by the Income-tax Officer and the .....

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..... capital receipt. That being so, the forfeited amounts must also be treated as capital receipt. Finally, the High Court erred in proceeding on the basis that the agreements in question were agreements for sale but did not effect a sale. The terms of the agreements clearly show that they were agreements of sale where both payment of the price and delivery were deferred. Had the purchasers paid the purchase price in the agreed instalments their right to take delivery of the trees under the agreement was complete. For the reasons aforesaid, we allow the appeals and set aside the order of the High Court and answer the question referred to it by the assessee in the negative." 9. The other judgment of D. P. Sandu Bros. Chembur P. Ltd. [2005] 2 .....

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