TMI Blog2017 (4) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... eing still subjudice cannot be brought to tax in the year under consideration. The finding of the Assessing Officer in this respect that if the assessee fails in appeal by the judgement of Hon'ble High Court then the same will be deducted from its income is not justified. After considering the relevant facts of case and in view of the legal proposition cited in cases relied upon by the assessee, the ld. CIT(A) has rightly deleted the addition which does not need any interference on my part, hence, uphold the action of the Ld. CIT(A) on the issue in dispute and dismiss the ground no. 2 raised by the Revenue. - I.T.A. No. 5404/DEL/2011 - - - Dated:- 29-3-2017 - Shri H.S. Sidhu, Judicial Member And Shri L. P. Sahu, Accountant Member Department by : Sh. Umesh Chand Dubey, Sr. DR Assessee by : Sh. R. S. Singhvi, CA Sh. Satyajit Goel, CA ORDER This appeal by the Revenue is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-XXVIII, New Delhi dated 07.9.2011 pertaining to assessment year 2007-08 on the following grounds:- 1. The Ld. CIT(A) has erred in deleting the addition made by AO of ₹ 46,37,887/- on account of arbitration awar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the I.T. Act, 1961 on the same income. Subsequently, the case was selected for scrutiny under CASS. First notice u/s. 143(2) was issued on 18.7.2008 and again notices u/s. 142(1) and 143(2) alongwith detailed questionnaire were issued to the assessee. In response thereto, the Assessee s AR attended the assessment proceedings from time to time and relevant information were filed. During the year under consideration the assessee has received arbitration awards from DDA in respect of work done by it in the earlier years and it was observed thereon that in the return of income the assessee firm has shown contract receipt at ₹ 29,53,349/- as against receipt of ₹ 75,91,236/-. Thus the assessee has shown less contract receipt by ₹ 46,37,887/- (Rs. 75,91,236/- = ₹ 29,53,349/-). During the course of assessment proceedings the assessee was asked to explain the reasons for not showing contract receipts of ₹ 46,37,887/-. Accordingly, the AO assessed the income of the Assessee at ₹ 1,39,20,740/- and made the additions of ₹ 46,33,887/- ₹ 77,73,520/- on account of damages and interest received from DDA vide his order dated 29.12.2009 passed u/s.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt not taxable as revenue receipt. Hon'ble Madras High Court in the case of CIT vs. T. 1. M. Sales Ltd, 259 ITR 116 held that compensation for impairment of profit making apparatus was capital receipt. It was also observed by Hon'ble Supreme Court in the case of reported at 236 ITR 903 that compensation received for the destruction or sterilization of capital asset were nothing but capital receipt. In the instant case also, after the dispute with DDA, assessee was out of said contract and the business of the assessee was totally paralyzed, which amounts to loss of source of income, therefore the amount received only towards damages was capital in nature. In the year under consideration the issue in dispute is the same. There was no business activity during the year and the only receipt was from DDA towards damages which is capital in nature and therefore, not taxable. Following the judgement of Delhi ITAT in the appellant's own case for the asstt.year 2003-04, I delete the addition of ₹ 46,37,887/- made by the Assessing Officer who treated the-same as revenue receipt. GROUND NO. 2 9. The CIT(A) in the case of appellant in the assessment year 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame could not be assessed before reaching finality . In the case of CIT V. Sarvartra Road Runners Pvt. Ltd. 301 ITR 443(Del.) it is held that amount withdrawn by assessee pending appeal against arbitration awards from deposits made in court following interim order of court could not be treated as income accrued to the assessee. In the case of CIT v. Bhoop Ram Dagar HUF (2008) 173 Taxman 8 (P H) High Court, it has been held that interest on enhanced compensation cannot be taxable till the issue relating to it attains finality as the same would accrue to assessee at that time only. Further in the case of CIT v. Karanbir Singh (2008) 169 Taxman 85 (P H) High Court, it was held that revenue was not entitle to tax amount of interest received by the assessee till such time proceedings in reference to compensation attain finality. In the case of Commissioner of Wealth Tax v. Girija Ammal (2006) 154 Taxman 211 (Mad.) it was held that additional compensation received could not be treated as part of compensation received for transfer of land until it was finally determined by High Court or Supreme Court and 'if the appeal of State Govt. against enhanced compensati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as capital receipt not taxable as revenue receipt. Hon'ble Madras High Court in the case of CIT vs. T. 1. M. Sales Ltd, 259 ITR 116 held that compensation for impairment of profit making apparatus was capital receipt. It was also observed by Hon'ble Supreme Court in the case of reported at 236 ITR 903 that compensation received for the destruction or sterilization of capital asset were nothing but capital receipt. In the instant case also, after the dispute with DDA, assessee was out of said contract and the business of the assessee was totally paralyzed, which amounts to loss of source of income, therefore the amount received only towards damages was capital in nature. In the year under consideration the issue in dispute is the same. There was no business activity during the year and the only receipt was from DDA towards damages which is capital in nature and therefore, not taxable. 7.2 We further find that Ld. CIT(A) by following the decision of Delhi ITAT in the assessee's own case for the asstt.year 2003-04, rightly deleted the addition of ₹ 46,37,887/- made by the Assessing Officer who treated the-same as revenue receipt, which does not need any interf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in each of relevant assessment years on accrual basis - Whether additional compensation received could not be treated as part of compensation received for transfer of land until it was finally determined by High Court or Supreme Court and if appeal of State Government against enhanced compensation received by assessee was allowed, assessee was bound to refund amount and, hence, same could not be assessed before reaching finality . In the case of CIT V. Sarvartra Road Runners Pvt. Ltd. 301 ITR 443(Del.) it is held that amount withdrawn by assessee pending appeal against arbitration awards from deposits made in court following interim order of court could not be treated as income accrued to the assessee. In the case of CIT v. Bhoop Ram Dagar HUF (2008) 173 Taxman 8 (P H) High Court, it has been held that interest on enhanced compensation cannot be taxable till the issue relating to it attains finality as the same would accrue to assessee at that time only. Further in the case of CIT v. Karanbir Singh (2008) 169 Taxman 85 (P H) High Court, it was held that revenue was not entitle to tax amount of interest received by the assessee till such time proceedings in reference to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
