2019 (3) TMI 737

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.... facts relating to the issue are stated in brief. The assessee is engaged in the business of real estate, construction and letting out of commercial premises. It was noticed by the AO that the assessee had entered into a lease agreement dt. 18-02-2011, which was subsequently amended vide supplementary agreement dt. 16-01-2012 in connection with leasing out of a property located at Juhu, Mumbai to M/s. Junobo Hotels Pvt. Ltd. The assessee did not offer any rental income in pursuance of the above said agreement. When confronted, the assessee submitted that, as per the terms of the contract, rent accrues to the assessee only from "rent commencement date", which is determined as the next date to the day when the approval from Ministry of Envir....

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....and perused the record. 6. At the outset, Ld. DR submitted that assessee is entitled to receive compensation of Rs. 4.20 Crores being the quarter as per the supplementary agreement prior to the rent commencement date. Since the right of the assessee to receive compensation has arisen out of supplementary agreement, the compensation receivable by the assessee was rightly assessed by the AO under the head 'income from house property'. Accordingly, the Ld. DR submitted that the order passed by the Ld. CIT(A) on this issue should be reversed. 7. Ld. AR submitted that the assessee has not received approval from MOEF and OC from MCGM till date and hence, the assessee does not have right to collect rent from the lessee. 7.1. With regard to comp....

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.... Commencement date". There is also no dispute with regard to the fact that both these clearances have not been received by the assessee till the end of the financial year relevant to the AY. 2014-15. Hence, the Ld. CIT(A) has held that rental income assessed by the AO is not correct and accordingly he has deleted the same. We noticed that the Ld. CIT(A) has followed his order passed for the AY. 2013-14 and the said order of Ld CIT(A) has since been upheld by the co-ordinate Bench of the Tribunal. 8.1. However, from the assessment order we noticed that the AO has actually assessed the compensation amount under the head 'income from house property' by holding that the compensation amount is payable to the assessee till the 'Rent commenceme....