TMI Blog2018 (11) TMI 1341X X X X Extracts X X X X X X X X Extracts X X X X ..... essee, however, cannot choose to follow mercantile system for all other projects and make a departure only for one of the projects by changing the system of accounting. The Tribunal, therefore, correctly held this issue against the assessee. The assessee was bound to follow the mercantile system of accounting and offer the income to tax on the basis of accrual and not actual receipts. The assessee had claimed to have acquiesced certain rights in the property in question by way of assignment. Further, even when the Urban Land Ceiling Act was still in forced, such rights the assessee desired to pass on to the assignee for which the deed of assignment was executed. The assessee had never questioned such deeds. In fact, once ULC Act was repe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant year; (b) s.2(47) relied on by the AO was admittedly not applicable as the present case was not one of transfer of capital assets; and (c) under the relevant agreements, the amount of ₹ 10 crore did not at all fall due in the previous year relevant to AY 200708? 3. Brief facts are as under: Appellant-assessee is the partnership firm. The issue pertains to the Assessment Year 2007-08. 4. The assessee is engaged in the business of land development. As part of the business the assessee has entered into an agreement for development of land with the owners thereof, admeasuring 31 acres situated at Hadapsar, for total consideration of ₹ 4.75 crores on 29th November, 2004. Thereafter, on 12th October, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect from 29th November, 2007. On the date of assignment, therefore, no rights accrued in favour of assignee. It was, therefore, that once the Urban Land Ceiling Act was abolished, the parties executed a sale deed in favour of the purchaser in which the assessee was the confirming party. Learned counsel further submitted that in any case the entire income was offered to tax though in later years. 8. On the other hand, the learned counsel for the Revenue contended that Tribunal has given cogent reasons. The assessee cannot take advantage of its own wrong by claiming that the transaction of the assignment was invalid and that no income accrued to the assessee by virtue of such arrangement. 9. It is undisputed that the assessee except for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at accrual of income crystallized till the Urban Land Ceiling Act was repealed and sale deed was executed. There are many short-comings of this contention of the assessee. Firstly, the assessee had claimed to have acquiesced certain rights in the property in question by way of assignment. Further, even when the Urban Land Ceiling Act was still in forced, such rights the assessee desired to pass on to the assignee for which the deed of assignment was executed. The assessee had never questioned such deeds. In fact, once ULC Act was repealed, such arrangement was finalised. 12. Further, whatever be the nature of the agreement and accrual of rights in favour of the purchaser of the land or the assignor or the assignee the assessee never argu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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