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M/s. Macro Marvel Projects Ltd. Versus Assistant Commissioner of Income Tax, Company Circle-IV (1) , Chennai

2016 (5) TMI 41 - MADRAS HIGH COURT

Amount of repayment - whether not liable to be deducted in computing the income in the year of receipt itself? - whether Tribunal is right in law in holding that only 1/5th of the amount can be claimed as deduction in each of the five years? - Held that:- As rightly pointed out by the Commissioner of Income Tax (Appeals), the buyer of a plot of land was issued with a bank guarantee, so that the cost of the plot paid by him is repaid by the bank, after the expiry of five years. In order to enable .....

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of the buyer of the plot. The first is that the interest accrued on the Fixed Deposit would be the income of the buyer of the plot. The buyers may not agree to such a course of action. The appellant/assessee has accounted for the interest accruing on the Fixed Deposit Receipts, as their own income and the same has been accepted by the Department. The second consequence that may flow out of the issue of Fixed Deposit Receipt in favour of the buyers of the plots is that they may foreclose the same .....

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nly the payment, there is no escape from the conclusion that the assessee can claim the expenditure in the year of Fixed Deposit Receipt. Hence, the questions of law are answered in favour of the assessee. - Tax Case Appeal No.960 of 2007 - Dated:- 15-2-2016 - Mr. V.RAMASUBRAMANIAN and Mr. N.KIRUBAKARAN, JJ. For The Appellant : Dr.Anita Sumanth For The Respondent : Mr.T.R.Senthilkumar, SC JUDGMENT (Judgment of the Court was made by V.Ramasubramanian, J) This Tax Case Appeal is filed by the Asses .....

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med as deduction in each of the five years? 2. We have heard Dr.Anita Sumanth, learned counsel appearing for the appellant and Mr.T.R.Senthilkumar, learned Standing Counsel for the Department. 3. During the Assessment Year 1994-95, the appellant/assessee introduced a Fresh Novel Scheme known as "Money Back Novel Scheme" to the public. Under the said scheme, any person, who bought a plot of land from the appellant/assessee was assured of the return of the entire land cost upon the expir .....

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o the Commissioner of Income Tax (Appeals). The Appellate Commissioner called upon the appellant/assessee to provide details of one completed transaction of sale, so as to understand the scope of the dispute. Copies of the original pamphlet, allotment letter given to one of the buyers, the advance money taken from the buyer, bank guarantee issued in favour of the buyer, a copy of the registered sale document etc., were furnished by the appellant/assessee before the Commissioner. 5. After a perus .....

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h Ind Bank Housing Limited in a Scheme known as "Money Multiplier Scheme". The Fixed Deposit was to mature on 25.2.1999, with the maturity amount indicated as ₹ 62,186/-. 6. From the above facts, the Commissioner of Income Tax (Appeals) concluded that upon receipt of the entire sale consideration from the buyer of a plot, the assessee created a Fixed Deposit for a period of five years in a particular scheme in a bank, so that the maturity amount of what was deposited, equalled th .....

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the Appellate Commissioner on the ground that what was applicable to the case on hand was the decision of the Supreme Court in M/s. Madras Industrial Investment Corporation Limited vs. Commissioner of Income Tax [225 ITR 802]. In that view, the Tribunal reversed the decision of the Commissioner of Income Tax (Appeals). Hence the assessee is before us. 9. As rightly pointed out by the Commissioner of Income Tax (Appeals), the buyer of a plot of land was issued with a bank guarantee, so that the .....

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