IT : Where assessee received certain advance on assigning development rights of a land, if transaction did not complete for some reason, no income would arise under section 28(iv), particularly when relevant MOU was not yet cancelled
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[2014] 52 taxmann.com 166 (Bombay)
HIGH COURT OF BOMBAY
Commissioner of Income-tax-3, Mumbai
v.
Arvind Securities (P.) Ltd.*
S.C. DHARMADHIKARI AND B.P. COLABAWALLA, JJ.
IT APPEAL NO. 285 OF 2012†
JUNE 18, 2014
Section 28(iv) of the Income-tax Act, 1961 - Business income - Value of any benefit or perquisite arising from business or exercise of profession (Advance receipt) - Assessee-company executed Memorandum of Understanding (MOU) with one HR for assigning development rights of a land and received certain sum as advance - As transaction did not complete, assessee did not show that amount as income - Assessing Officer treated said amount as income by applying section 28(iv) - On appeal, Commissioner (Appeals) as well as Tribunal deleted addition by recording finding that MOU was neither withdrawn nor cancelled and it was a liability towards HR which assessee was obliged to return - Whether finding of fact recorded by Commissioner (Appeals) and Tribunal was based on material on record and, therefore, could not be interfered with - Held, yes [Para 5] [In favour of assessee]
■■■
[2014] 52 taxmann.com 166 (Bombay)
HIGH COURT OF BOMBAY
Commissioner of Income-tax-3, Mumbai
v.
Arvind Securities (P.) Ltd.*
S.C. DHARMADHIKARI AND B.P. COLABAWALLA, JJ.
IT APPEAL NO. 285 OF 2012†
JUNE 18, 2014
Section 28(iv) of the Income-tax Act, 1961 - Business income - Value of any benefit or perquisite arising from business or exercise of profession (Advance receipt) - Assessee-company executed Memorandum of Understanding (MOU) with one HR for assigning development rights of a land and received certain sum as advance - As transaction did not complete, assessee did not show that amount as income - Assessing Officer treated said amount as income by applying section 28(iv) - On appeal, Commissioner (Appeals) as well as Tribunal deleted addition by recording finding that MOU was neither withdrawn nor cancelled and it was a liability towards HR which assessee was obliged to return - Whether finding of fact recorded by Commissioner (Appeals) and Tribunal was based on material on record and, therefore, could not be interfered with - Held, yes [Para 5] [In favour of assessee]
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