TMI Blog2020 (9) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... , Power of Attorney, the mortgage were all in force at the relevant time. In fact, even on the date when the Assessing Officer completed the assessment under Section 147 of the Act by order dated 25.03.2015, the Joint Development Agreement was not rescinded and the Power of Attorney was not cancelled. Therefore, on facts, the Assessing Officer could not have held that this is on account of a windfall gain to be brought to tax under the head 'income from other sources'. Thus we hold that the order passed by the Tribunal does not call for any interference and consequently, the Substantial Question of law is required to be answered against the revenue. - Tax Case Appeal No.439 of 2018 - - - Dated:- 2-9-2020 - HONOURABLE MR. JUSTICE T.S. SIVAGNANAM AND HONOURABLE MRS. JUSTICE PUSHPA SATHYANARAYANA For Appellant : Mr. T. Ravikumar Senior Standing Counsel For Respondent : Mr. S. Sridhar Assisted by M/s. Harshini Jothiraman JUDGMENT T.S.SIVAGNANAM,J This appeal by the assessee filed under Section 260A of the Income Tax Act, 1961 ( the Act for brevity), is directed against the order dated 20.12.2017 in ITA No.3250/Mds/2017 on the file of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, with regard to the amount of ₹ 9 Crores received by the assessee as advance, the Assessing Officer came to the conclusion that the same has to be treated as a windfall gain and treated as income from other sources and accordingly completed the assessment by order dated 25.03.2015. Aggrieved by such order, the assessee preferred appeal before the Commissioner of Income Tax-I [CIT(A)], Chennai. The appeal was allowed by order dated 01.09.2016. Aggrieved by the same, the revenue preferred appeal before the Tribunal which was dismissed by the impugned order. 4. Mr.T.Ravikumar, learned Senior Standing Counsel appearing for the appellant/revenue after setting out the factual position and referring to the various clauses in the Memorandum of Understanding [MOU] dated 16.11.2016 submitted that the Assessing Officer was right in treating the sum of ₹ 9 Crores as income in the hands of the assessee and this fact came to light during the scrutiny of the returns for the year 2010-2011. It is submitted that the assessee received the sum of ₹ 9 Crores during the financial year 2006-07 relevant to AY 2007-08 and the amount remained with the assessee till 2015. Further, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng counsel for the revenue would apply to the facts and circumstances of the case. In the case of T.V.Sundaram Iyengar Sons Ltd., the assessee themselves treated the money as their own money, whereas the assessee in the case on hand treated it as a liability. It is further submitted that the Assessing Officer committed a factual error in observing that the development agreement and the power of attorney were cancelled whereas the same continued to remain in force. It is further submitted that the interest of the revenue has been sufficiently protected as the advance amount is to be reduced from the cost of acquisition and in terms of Section 51, the assessee will be paying more tax. 6. Heard the learned counsels on either side and perused the materials available on record. 7. The assessment for the relevant year, AY 2007-08 was reopened based on certain information which the Assessing Officer noticed during the assessment proceedings for AY 2010-11. The reasons for reopening were furnished to the assessee, a reading of which shows that the Assessing Officer proposed to apply Section 2(47) of the Act and observed that the assessee has not admitted the income in their return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee to return the amount of ₹ 9 Crores before 31.03.2015. Even at that point of time, the agreement was not cancelled and the power of attorney granted to the developer remained in force. Therefore, by no stretch of imagination, the sum of ₹ 9 Crores in the hands of the assessee can be treated to be a windfall gain as it did not accrue to the assessee as a result of circumstances outside their control. Therefore, the finding of the Assessing Officer is incorrect. The Assessing Officer appears to have been guided by the fact that the amount of ₹ 9 Crores remained with the assessee from the financial year 2006-07 till 2015-16 and therefore, it should be treated as an income in the hands of the assessee and brought to tax because the amount was returned to the developer only in March 2015. 8. Firstly, we need to consider as to whether the said amount of ₹ 9 Crores can be treated as income from other sources. Section 56(1) of the Act states that income of every kind which is not to be executed from the total income under the Act shall be chargeable to income tax under the heard income from other sources , if it is not chargeable under any of the head ..... X X X X Extracts X X X X X X X X Extracts X X X X
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