2019 (3) TMI 226

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.... which according to the Company remained with the company as an advance for rent and never turned into income. The assessee-respondent is engaged in letting out commercial spaces. The assessee is said to have entered into a contract with one another company, for letting out a commercial space towards which the other company had advanced an amount of Rs. 13,00,000/- as rent. This was paid by way of three cheques on various dates in September, 2001. The same were also encashed. 3. The company, who advanced the rent could not occupy the premises, allegedly due to the company having not received certain licences for carrying out the proposed business activities. There was a refund of Rs. 51,000/- made by the assessee respondent on 31.03.2002....

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....t returned and how it remains as a liability of the assessee company. In such circumstances, it was added as an income; which is permissible going by the decision in Commissioner of Income Tax v. T.V. Sundaram Iyengar and Sons Ltd .[1996(222) ITR 345 (SC)]. 7. Smt. S.Parvathy, the learned Amicus, would rely on the decision of the Hon'ble Supreme Court in Commissioner of Customs, Mumbai v. Toyo Engineering India Limited [2006(201) E.L.T. 513 (S.C.)]and of this Court in Bharat Petroleum Corporation Ltd. v. Union of India [2018(360)E.L.T. 848 (Ker.)] to contend that the Assessing Officer could not have deviated from the original proposal. The Assessing Officer found the amounts to be unexplained investment, which however was not origina....

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....tion is whether there was any possibility of it being recovered. If the recovery had been barred by limitation, necessarily, it has to be treated as an income from the business and the same had to be assessed under the Income Tax Act as has been held in T.V. Sundaram Iyengar and Sons Ltd. Even if the deviation from the proposal is found to be improper, the assessment has to be sustained, as an income from business; which was the original proposal. If the other company had occupied the premises the amounts would definitely be shown as income from business. 11. With respect to the contention of limitation having not expired in the relevant previous year, it is to be noticed that the assessment itself was finalised after three years, which ....