https://www.taxtmi.com/caselaws?id=35776 Advance receipts from an agreement to sell land do not become taxable income in the year of receipt where title has not yet passed and the sale is completed only later. For a dealer in land, the land remains stock-in-trade until the transaction is legally completed, and a mere agreement to sell does not divest ownership or create income by itself. Even if the seller receives earnest money or part payment, the amount is not a trading receipt until completion of the sale. The accounting method does not alter this result because cash or mercantile accounting applies only to completed transactions. en-us Wed, 22 Jul 1981 00:00:00 +0530 Tue, 16 Mar 2010 15:50:07 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=35776 Advance receipts from an agreement to sell land do not become taxable income in the year of receipt where title has not yet passed and the sale is completed only later. For a dealer in land, the land remains stock-in-trade until the transaction is legally completed, and a mere agreement to sell does not divest ownership or create income by itself. Even if the seller receives earnest money or part payment, the amount is not a trading receipt until completion of the sale. The accounting method does not alter this result because cash or mercantile accounting applies only to completed transactions. Case-Laws Income Tax Wed, 22 Jul 1981 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=35776