TMI Blog2014 (6) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... ation - if the assessee is not charging cost of land to the Profit and Loss A/c. and offered the receipt from sale of land/building/IT Park as revenue receipt, then the claim of the assessee could be allowed – the AO is directed to verify whether the assessee has charged any cost incurred for allotment of land in its books of account as an expenditure and if it is not charged any expenditure towards allotment of land to Profit and Loss A/c., then the claim of the assessee is to be allowed - Decided in favour of Assessee. - MA No. 72/Hyd/2014, ITA No. 1324/Hyd/13, MA No. 73/Hyd/2014, ITA No. 1325/Hyd/13 - - - Dated:- 6-6-2014 - Shri Chandra Poojari And Shri Saktijit Dey,JJ. For the Applicant : Sri Jitendra Jain For the Respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of allotment of land was recorded in either the Profit and Loss Account and/or in the Balance Sheet of the assessee at the time of allotment or thereafter; it being confident of being entitled to the full amount of rebate. To secure performance of its obligations, however, the Govt of AP had sought a bank guarantee from the assessee, of an amount equivalent to cost of land i.e., Rs 54.57 crores. This bank guarantee was duly furnished, and was to be released pro-rata based on the rebate on the cost of land accruing to the assessee every financial year during the specified period. During the financial year relevant to AY 2006-07, 1,536 jobs were created in the IT Park, and accordingly, the assessee was entitled to a pro-rata rebat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs 123,557,719 Total - Rs 1,610,805,902 5. The AR submitted that correlating the principles espoused in para 10.1 to the observations cited in para 10.2, the Tribunal, in para 10.3 has concluded as under: When the land is treated by the assessee as stock-in-trade and the expenditure relating to the land is treated as revenue expenditure, the concession received by the assessee with reference to the land cannot be treated as a capital receipt, but, it would be treated as a revenue receipt. In other words, when the land was admittedly relating to the trading activities of the assessee, the concession received in relation to the land, the cost of the land to be taken into account in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d any benefit on account of the land cost, by adding such cost to the value of its Inventory , or by charging such cost to its P L Account, then, it would have been appropriate to treat the release and/or the rebate as its revenue receipt. However, as highlighted in the foregoing paragraphs, this is not the case. In fact, treating the release as a revenue receipt would tantamount to double taxation as, on sale of land / building or the IT Park, it would not be getting any deduction for the cost of land, such cost never having been recorded in its books. To that extent it would pay income-tax to the extent of the full consideration that is attributable to the land. On completion of specific period, the assessee has submitted a list of emplo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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