2003 (11) TMI 29

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....ce are that the business of the appellant is to construct flats and sell at profit. Interest has been paid by the appellant in pursuance of an agreement entered into between the appellant and M/s. Sagar Shipping Co. Ltd., whereunder the appellant was paid an advance of Rs. 4,33,000 as price of the flat deliverable within a stipulated period. As the flat could not be delivered during the stipulated....

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.... the Income-tax Appellate Tribunal also the assessee did not succeed on the aforesaid ground. The Tribunal has also recorded a finding that there is no material to record a finding that the advance received by the assessee for sale of flat was utilised in the construction of the said flat. Heard Mr. A.K. Roy Chowdhury, learned senior counsel for the appellant, and Mr. P.K. Mallick, learned seni....

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.... the purchaser of the flat has been claimed to be an interest, the same is actually of the nature of liquidated damages or penalty as the amount had to be paid only because the assessee failed to deliver the flat to the purchaser within the stipulated period. For considering the above contentions between the parties the relevant provision of law requires a consideration and section 24(1)(vi) of....

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....d in advance the price of the flat by its purchaser and on the materials on record, it appears that no interest was payable on the said advance payment of consideration money. The assessee has claimed that he was to pay interest only if the flat was not delivered within the stipulated time and, in the present case, the assessee having failed to deliver the flat within the stipulated time paid the ....