9911796707
TMI Blog2012 (5) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... d of by this common order. 2. The grounds raised by the assessees are related to the following two issues. a) Whether the Ld. CIT(A) is justified in confirming that the freezer deposit received from the various dealers should be assessed as income of the assessee. b) Whether the Ld. CIT(A) is justified in confirming that the gain arising out of the sale of land is assessable as business income. 3. The facts necessary for the disposal of the issues are stated in brief. The assessees herein are carrying on the business of manufacture and sale of ice creams. They sell their products through various types of agents, viz., vendors, distributors etc. by duly entering into an agreement with them. It is in the common knowledge of everybody th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and they offered the gain arising thereon under the head income from capital gains. The Assessing Officer noticed that the Object clause of Memorandum and Articles of Association of both the companies included a clause relating to carrying on the business of agency for real estate. Accordingly, the Assessing Officer took the view that the activity of sale of land should be considered as the business activities of the assessees herein and accordingly assessed the gain arising on sale of land under the head "income from business". The said action of the AO was also confirmed by the Ld. CIT(A). Aggrieved by the orders passed by Ld CIT(A), both the assessees are in appeal before us. 5. At the time of hearing, the Ld. Counsel for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pensation of the spread-over period. They are attached with a liability. The accrual comes only on termination of agreement. The business necessity requires cordial relationship with vendors. The assessee cannot treat these two amounts as receipts in the nature of income unless the so-called agreement terminated. In other words it is not a debt owned by the assessee. Hence, under the above facts and circumstances of the case, this issue to be decided in favour of the assessee by setting aside the orders of the authorities. Besides the assessee never treated this as income in the books. The assessee consistently holding it so as the amount attached with a liability to refund. The assessee never admitted this amount as income in the books. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , under the given set of facts and circumstances, we by relying on the above decisions set aside the orders of the authorities and allow this ground of the assessee as it cannot be treated as income for the year relevant under appeal." 7. Since the co-ordinate bench has already taken a view on identical issue, by following the said decision, we hold that the deposits collected from vendors cannot be considered as the income of the assessee so long as the agency agreement continues. Accordingly, we set aside the order of Ld CIT(A) on this issue in the hands of both the assessees and direct the AO to delete the addition made on this issue in the hands of both the assessees herein. 8. With regard to the second issue, the Tribunal has held in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e identical in nature in the instant cases also. However, we are of the view the claim of the assessees requires verification at the end of the AO, as the facts surrounding the issue are not fully borne out of assessment order. Accordingly, we set aside the order of the Ld. CIT(A) on this issues and restore the same to the file of the AO with the direction to examine the issue afresh in the light of principles discussed by the co-ordinate bench of Tribunal in the case of High Range Foods (P) Ltd, supra, and decide the issue accordingly. Needless to mention, the assessee should be given necessary opportunity of being heard. 10. In the result, the appeals filed by both the assesses are treated as allowed for statistical purposes. Pronounced ..... X X X X Extracts X X X X X X X X Extracts X X X X
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