TMI Blog2006 (9) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... account of sale of plots were not trading receipts. In view of law laid down by the hon'ble Supreme Court in CIT v. Podar Cement P. Ltd.[ 1997 (5) TMI 2 - SUPREME COURT] , this view cannot be approved. Once the possession of plots was transferred and the transferees even made constructions, the dominion over the property passed on to the transferees and the amounts received by the assessee could not be held to be mere deposits and property transferred could not be held to be stock-in-trade of the assessee. The amount received by the assessee had, thus, to be revenue receipt in its hands. Thus, we answer the question in favour of the Revenue and against the assessee - Reference is disposed of accordingly. - ADARSH KUMAR GOEL AND RAJES ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment basis. Some of the sales were registered in December, 1975. In the balance cases, registration could not be effected on account of the restrictions placed by the Urban Land (Ceiling and Regulation) Act, 1976. Though the plots were not registered, the learned Income-tax Officer took the view that the possession having been handed over, the amounts received in respect of such plots represented trading receipts. 3. The matters were thereafter taken in appeals by the assessee and the learned Commissioner of Income-tax (Appeals) vacated the additions made by the learned Income-tax Officer for all the years. The issue was thereafter, for all these years, brought by the Revenue before the Tribunal. The Bench dismissed the appeals with the fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Supreme Court in the case of Nawab Sir Mir Osman Ali Khan (Late) v. CWT [1986] 162 ITR 888. Unless the title of the assessee was extinguished the title of the purchaser in the plots in question could not arise and the land was to be treated to continue as the stock-in-trade of the assessee. The land could cease to be the assessee's stock-in-trade only when there was a valid and registered sale deed in respect thereof. It is not under dispute that the assessee-company could not and did not execute any registered sale deed in respect of the instances in question during the assessment years under appeals and, therefore, what is received in the form of advance or earnest money could not constitute a revenue receipt in its hands. We ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the decision dated April 9, 1987, in the case of Sh. Avtar Singh and now the facts in the present case differed fundamentally from those facts. It is not necessary to repeat them. Therefore, on the basis of the authority of the Madras High Court in the case of L.G. Ramamurthi, [1977] 110 ITR 453, learned counsel for the assessee was right in pointing out that the decision in the case of Sh. Avtar Singh could not come in the way of the assessee. The result is that we find no warrant or justification on facts in interfering with the orders of the Commissioner of Income-tax (Appeals). 4. We have heard learned counsel for the parties and perused the record. 5. We proceed to answer the question referred as under: 6. In CIT v. Podar Cement P. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Ltd. v. CIT [1999] 239 ITR 775 (SC); AIR 1999 SC 3185, similar' view was taken. 7. We may also quote the observations made by the Kerala High Court in CIT v. Travancore Rubber and Tea Co. Ltd. [1991] 190 ITR 508, which are apt for the present case also: Prima facie, the moment an earnest money or deposit is received, certain legal incidents are attached to it. It is a security received for due performance of the contract. Whether the contract is effectuated or not, the amount could and will ordinarily be retained by the seller. If the purchaser commits breach of the agreement, earnest money can be forfeited. If, on the other hand, the transaction goes through, the earnest money received will be given credit to, towards the considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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