TMI Blog2019 (7) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... interest free deposits granted by the assessee could be proved by the revenue. The said proposition is in line with the recent decision of Hon ble Supreme Court rendered in CIT Vs Reliance Industries Ltd. [ 2019 (1) TMI 757 - SUPREME COURT] . Respectfully following the same, we delete disallowance u/s 36(1)(iii) made by Ld. AO. AO is directed to nullify the adjustment of the same from WIP. Ground No. A stands allowed. Taxability of Rent received from tenant and tenancy transfer fees - adjustment and reduction from WIP - in the opinion of Ld. AO, was assessable as Income from other sources - both received in respect of project of assessee - incoming tenants has agreed to obtain tenancy rights from outgoing tenants for a certain lump su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER):- 1. Aforesaid appeal by assessee for Assessment Year [in short referred to as AY ] 2012-13 contest the order of Ld. Commissioner of Income-Tax (Appeals)-17, Mumbai, [in short referred to as CIT(A) ], Appeal No. CIT(A)- 17/IT-67/15-16 dated 24/03/2017 on following grounds of appeal: - A)Disallowance of interest - ₹ 7,03,401/- 1) The learned Commissioner of Income Tax (Appeals) - 17, Mumbai [CIT(A)] erred on facts and in law in confirming the order of the Income Tax Officer - 10(3)(4), Mumbai (AO) disallowing interest of ₹ 7,03,401/- without appreciating that the appellant had sufficient non-interest bea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsfer fees of ₹ 5,00,000/- taxed by the AO and as confirmed by the CIT(A), may be deleted. 9) Without prejudice to the above, the learned AO and the CIT(A) erred in not appreciating that the transfer fees of ₹ 5,00,000/- was a capital receipt and hence could not be taxed as the regular income of the appellant. 10)If your honours are not inclined to delete the entire addition on account of transfer fees of ₹ 5,00,000/-, your honour may be pleased to hold that the receipt of transfer fees is a capital receipt and hence, should be dealt with accordingly. 2.1 Facts on record reveal that the assessee being resident corporate assessee has been assessed u/s 143(3) for impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the owners along with the tenants and the said asset was disclosed as stock-in-trade. Therefore, rent and tenancy fees received did not relate to project in hand. The cited decision was distinguished since in that case TDR received by the assessee was directly related to business of construction. However, in the present case, the assessee had received rent and transfer fees from the tenant of the building purchased for redevelopment and did not relate to the assessee s construction activities. Therefore, the aforesaid receipts of ₹ 5.21 Lacs were assessed as Income from other sources and WIP was enhanced by corresponding amount. 3. Aggrieved, the assessee agitated the same, however, without any success before Ld. fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has entered into an agreement for transfer of tenancy rights on 05/10/2011.This agreement is between the outgoing tenants, assessee as landlord and incoming tenants. The perusal of the same reveal that the assessee was owner of a certain property bearing CTS No. 677, 677/1 677/2 in Village Vile Parle West, Taluka Andheri, admeasuring 1110 Square Meters together with building standing thereupon. Under the terms of the agreement, the incoming tenants has agreed to obtain tenancy rights from outgoing tenants for a certain lump sum consideration. The landlord, as a consenting party, has agreed for the same upon receipt of a sum of ₹ 5 Lacs. Hence, this agreement is for transfer of tenancy rights in certain land building from outgoi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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