TMI Blog2012 (7) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... power connection details, etc. The assessing officers without carrying out all these enquiries, straightaway rejected the claim of the assessee - set aside this issue to the file of AO to verify the completion of the construction - in favour of assessee. Tax on interest received of advances made - the assessee has paid Rs. 2 crores to a party and in return was allotted 52 acres 34 guntas of land at the rate of Rs. 4 lakh per acre - Held that:- Considering a clause in MOU that the seller agreed to buy back the said agricultural land within four months from the date of registration with the further grace period of two months and if there is delay beyond the period of six months in buying back the interest at 2% would be paid - as the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... residential premises has been taken by the assessee and no sale deed was executed till the due date of filing the return of income. For the purpose of rejection of the claim of the assessee, the assessing officer relied on the decision of Madras High Court in the case of CIT vs. Jayalakshmi Rajendran (152 ITR 742) and the judgment of Kerala High Court in the case of P.K. Kesava Nair vs. CIT (174 ITR 253) . On further appeal, the CIT (A) confirmed the above action of the assessing officer. Against the order of the CIT (A) on this issue, the assessee is in appeal before us. 4. We have heard both the parties on this issue. The learned departmental representative relied on the judgment of Delhi High Court in the case of D.P. Mehta vs. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement deemed to be commenced from the 2nd May, 2008 and thereafter it is to be construed that there is a time limit to complete the construction within three years time with a grace period of six months. According to the department, the earliest possible date for construction of the apartment will be 3rd May, 2011 and if one consider this date as date of completion, the assessee would not be entitled for deduction under section 54F as the assessee is liable to construction the new apartment for residence before August, 2010 as the assessee transferred the land in August, 2007. We find no merit in the argument of the learned departmental representative because in this case, the assessee made all efforts to acquire new asset as stipulated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at if the buy back is not made within 4 months but within six months, the buyback will be made @ Rs.5.50 lakhs per acre. There was also a condition that if the buyback is delayed, interest @2% per month will accrue on the amount paid. Apart from this transaction, the assessee had also paid another Rs. 2 crores as advance for purchase of land with similar condition. Apparently, the buy back of the land has not taken place as yet. The assessing officer has calculated the profit arising out of the amount invested by the assessee at Rs.1,25,00,000/- and added the same to the income. Apparently, the assessing officer has calculated the profit of 1.25 for every 4 lakhs invested (Rs. 5.25 lakhs buy back price- Rs. 4 lakh per acre purchase price). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er MOU, M/s. Amogh Realtors Pvt. Ltd., has two options i.e., to purchase the property at Rs.5.25 lakhs per acre within four months and thereafter to purchase the property at Rs.5.50 lakhs per acre within the period of six months. If failed to do so, thereafter, the Amogh Realtors could purchase the said property by paying Rs.5.50 lakhs per acre and interest at 2% per month on Rs. 2 crores. 8. In case M/s. Amogh Realtors Pvt. Ltd., does not want to purchase the property, the assessee can sell the property according to their wish. During the period of six months only, the assessee cannot sell or mortgage to a third party. In other words, thereafter, the assessee is at liberty to dispose of this property as it thinks fit. Being so, in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the assessee is correct and offered this income to the next assessment year on receipt basis, this amount of Rs.21 lakhs cannot be taxed for the year under consideration otherwise, it amount to double taxation. In view of the above, we set aside this issue to the file of the assessing officer to see whether the assessee is following cash system of accounting to this head of income and whether this impugned income was offered to tax in the next assessment year. If the same is offered to the subsequent assessment year on receipt basis, there cannot be any addition of the amount of Rs.21 lakhs for the assessment year under consideration. 11. In the result, the appeal of the assessee is allowed in part. (Order pronounced in the Open ..... X X X X Extracts X X X X X X X X Extracts X X X X
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