TaxTMI 
TaxTMI 
2015 (10) TMI 937
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.... / profession'. As per the assessee by the very nature of the deal under which the said amount was received, it was only capital receipt. 02. Facts apropos are that assessee engaged in the business of trading in fabrics, power generation etc., had filed its return for the impugned assessment year declaring income of Rs. 1,83,82,717/-. During the course of assessment, AO noted that a sum of Rs. 2,50,00,000/- was shown by the assessee as payable to M/s. PEP, among other creditors. AO sent a letter to M/s. PEP for confirmation of the balance to which they replied as under : "this has reference to your office letter dated October 16, 2012 wherein your gudself have asked us to submit certain information on the captioned subject. In this re....
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....eir Silver Oak project. As on 31.03.2010, when the project did not materialise assessee was still in negotiation with PEP. Meanwhile M/s. PEP had paid back Rs. 7.45 crores and the surplus of Rs. 2.50 crores was a liability to M/s. PEP. Such surplus receipt could at the best be considered as liquidated damages and was in the nature of capital receipts. As per the assessee, it had acquired no rights from M/s. PEP on payment of Rs. 4.95 crores and hence no capital gains could be computed. Since it was a capital receipt, as per the assessee, it could not be taxed under the head income from other sources' also. Reliance was placed on the decision of coordinate bench in the case of Yogesh Arora (P) Ltd (2009) TIOL-511-ITAT-Bang, and that of Hon'b....
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.... AR, there was no participation by assessee in any business venture. Further as per the Ld. AR, what was paid back by M/s. PEP in excess of Rs. 4.95 crores was only compensation. As per the Ld. AR such surplus was not taxable under any provisions of the Act. Apart from the citations placed before the Ld. CIT (A), reliance was also placed on the following : * Digital Electronics Ltd v. ACIT- ITA No.8646/Mum/2010, dt.21.06.2013 * B. Ramakrishnaiah v. ITO [(2010) 39 SOT 379] * Govindbhai C. Patel v. DCIT [(2010) 1 ITR (Trib) 34] Again as per the Ld. AR, even presuming that there was a business venture, the business itself had never taken off and hence the receipt of compensation by virtue of the judgment of Hon'ble Delhi High Court....
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....to Yadalam group which owned an immovable property at No.21, Hosur Road, lakkasandra, Ward - 63, Sangalore (earlier forming part of Sy. No. 151 of Koramangala village and Sy.No.67/2, 67/3, 67/4 and 67/5 of Adugodi Village, Segur Hobli, Sangalore, North Taluk). This property was jointly developed into a commercial complex, with M/s. Prestige estates Projects (P) Ltd and presently the property is known as "Forum Mall". The commercial complex and the parking area so developed are jointly owned by the developer M/s. Prestige Estates Projects'(P) Ltd and the co-owners of the land. Considering these facts the appellant advanced amounts for the white field project. 12. Letter dt.31.05.2006 written by assessee to M/s. PEP also clearly show t....
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....ance. 15. As to the case of B. Ramakrishnaiah (supra) decided by Hyderabad Bench of this Tribunal the question was whether capital gains is leviable when cost cannot be computed. The receipt in the case of the assessee here is in the Revenue field and hence this case has no applicability. 16. Vis-a-vis the decision of Mumbai Tribunal in the case of Digital Electronics Ltd (supra) it is neither a reported decision nor has assessee filed a copy before us. 17. As to the judgment of Hon'ble Delhi High Court in the case of Khanna & Annadhanam (supra) the compensation received by the concerned assessee was based on an agreement cancelling an agency of trading nature, assessee having represented the other party for a long period of 13 yea....