9911796707
TMI Blog2015 (7) TMI 839X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in facts of the case. ii. The Commissioner of Income Tax (Appeals) ought to have appreciated the fact that as the assessee is following mercantile system of accounting the whole amount of sale should be considered as accrued to the assessee. iii. The Commissioner of Income Tax (Appeals) ought to have appreciated the fact that through the agreement of sale dated 02.11.2005 the assessee is entitled to receive the amount of Rs. 502,60,000/- and it is accrued to the assessee as the assessee has the right to receive the same. iv. The Commissioner of Income Tax (Appeals) ought to have appreciated the fact that ITAT, Bench 'B' in ITA No.1080/Hyd/2011 dated 18.05.2012 has already decided the matter on an appeal by the assessee on the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ument No.7050/2005 01 AC-37 Gts Sy.No.332, 333, 331 25,29,350 05 Sale Deed dated 18.12.05, Vide document No.7835/2005 01 AC- 19Gts/Sy.No.337 4,84,440 Total 4,68,21,990 3. The Respondent-Assessee Company had entered into an Agreement of Sale dated 02.11.2005 with M/s. Leo Edibles and Fats Limited to sell the land to the extent of Ac.22.32 Gts. out of the above lands for a consideration of Rs. 5,01,60,000/- at the rate of Rs. 22,00,000/- per acre. In terms of the same Agreement of Sale, the Respondent-Assessee Company had received a sum of Rs. 36,55,000/- as advance on 02.11.2005 from the said company. According to the learned Commissioner of Income Tax, this transaction should be treated as a contract of sale and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar as it is prejudicial to the interest of the revenue. I, therefore, deem it proper to set-aside the said assessment order with the direction to re-do the same in the light of the aforementioned findings, observations and directions." 4. Aggrieved by this order, an appeal was filed before this Hon'ble Tribunal. This Hon'ble Tribunal, after hearing both the sides, had confirmed the action of the learned Commissioner of Income Tax in revising the assessment order vide its order dated 18.05.2012 in ITA No.1080/Hyd/2011. We have no information whether the Respondent-Assessee is on further appeal before the Hon'ble High Court on this order or not. Thus, the order of the revision passed by the Hon'ble Commissioner of Income Tax had attained th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer almost equated the business transaction of agreement of sale of the appellant-company with a 'development agreement' entered into by an individual for development of his land to a developer. In such development agreements with possession of the land, it was held by various courts that the transaction is transfer within the meaning of section 2(47) and exigency of capital gains arise from such transactions. However, in the case on hand, the facts are totally different. The appellant entered into an agreement of sale for selling their land and received part of consideration. Such agreements cannot, at any stretch by imagination, be treated as sales and taxed under any system of accounting. Only when the property in question was sold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e any adjudication. Ground No.4 is dismissed as infructuous. Therefore, the effective grounds of appeal are only 2 and 3, which relate to deletion of addition of Rs. 79,27,913/- arising out of treating the agreement for sale of land as sales. The learned Senior Departmental Representative vehemently argued that the Commissioner of Income (Appeals) ought not to have deleted the addition, inasmuch as, the Respondent-Assessee Company was following the mercantile system of accounting and the possession of the property was given as per terms of the agreement, substantial amount of consideration was received. The Agreement of Sale which was stated to have been cancelled was never produced before the Assessing Officer. Further, he had drawn our at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fer" under the provisions of sub-section (47) of Sec.2 of the Act has no application to the facts of the case. He further submitted that the agreement was cancelled subsequently on 27.03.2008. A copy of the cancellation of Agreement of Sale is placed at page No.5 of Paper Book. Finally, he submitted that since the property involved is immovable property unless and until the transaction of sale is evidenced by a Conveyance Deed duly executed and registered, it cannot be said that the lands were sold. Therefore, he prayed that the order of Commissioner of Income Tax (Appeals) may be upheld. 6. We heard the rival submissions and perused the material on record. In this case, in the given facts of the case, we are required to adjudicate whether ..... X X X X Extracts X X X X X X X X Extracts X X X X
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