TaxTMI 
TaxTMI 
2021 (7) TMI 790
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....Infrastructure Private Limited (SIPL) in order to invest in the ongoing projects under taken by SIPL. The assessee invested an amount of Rs. 31,046,400/- during this assessment year. As per the MOU, AO observed that the assessee was promised to receive 18 instalment of Rs. 20,79,000/- as per below schedule from SIPL: Date of installment Amount of installment (Rs.) 21st November, 2012 20,79,000/- 21st December, 2012 20,79,000/- 21st January, 2013 20,79,000/- 21st February, 2013 20,79,000/- 21st March, 2013 20,79,000/- 21st April, 2013 20,79,000/- 21st May, 2013 20,79,000/- 21st June, 2013 20,79,000/- 21st July, 2013 20,79,000/- 21st August, 2013 20,79,000/- 21st September, 2013 20,79,000/- 21st October, 2013 20,79,000/- 21st November, 2013 20,79,000/- 21st December, 2013 20,79,000/- 21st January, 2014 20,79,000/- 21st February, 2014 20,79,000/- 21st March, 2014 20,79,000/- 21st April, 2014 20,79,000/- Further, AO observed from the MOU that SIPL shall give 18 PDCs and the said PDCs shall be deposited on the due dates without reference to SIPL. Based on the above observations, the assessee was asked to show cause as to why the profit element in t....
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....AO rejected the submissions of the assessee merely relying on the cheque collection clause of the MOU that the PDCs shall be deposited on due dates without reference to SIPL. Accordingly, the AO made the addition the difference between total realization of all the post dated cheques to the extent of Rs. 3,74,22,000/- minus investment of Rs. 31,046,400/- as income from investment made. 4. Aggrieved with the above order, assessee preferred an appeal before Commissioner of Income Tax (appeals) - 9, Mumbai and made a detailed submission. After considering the submissions of the assessee, Ld. CIT(A) dismissed the appeal of the assessee with the following observation: "4.2.5 From the examination of the MOU, following crucial facts regarding the transactions under consideration emerge: i. The sell proceeds from 14 flats were quantified by both the parties by mutually agreeing to the terms of MOU. The total amount of sale proceeds to be paid by M/s Sambhav Infrastructure Pvt. Ltd. to the appellant in 18 instalments was Rs. 3,74,22,000/-. ii. M/s Sambhav Infrastructure Pvt. Ltd. gave a commitment of selling all the flats which were allotted to the appellant vide various allotment let....
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.... not in consonance with the principles of accounting and also the provisions of the Act. Though the appellant misrepresented the transactions while accounting, that would not change the nature of the transaction and also the fact of accrual of the income to the appellant from such transaction. 4.2.9 The appellant has argued that the flats were not sold within two months as per the plan and even after that due to adverse market condition. The appellant has also argued that the income will accrue only after the flats are sold by the project developer. The arguments made by the appellant are not tenable because, as per the MOU, the developer, M/s. Sambhav Infrastructure Pvt. Ltd. was committed to return the sale proceedings amounting to Rs. 3,74,22,000/- without any condition. The payment of amount of Rs. 3,74,22,000/- by M/s. Sambhav Infrastructure Pvt. Ltd was not contingent on the event of sale of flats. The appellant was free to deposit the post dated cheques as it's will without any reference to M/s. Sambhav Pvt Ltd. 4.2.10 Had the right to receive the amount of Rs. 3,74,22,000/-arose by virtue of the MOU, handing over of the post dated cheques and the fulfilment of all t....
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.... contrary to the facts of the case. 2. On the facts and circumstances of the case the Learned CIT-A has erred in ignoring the fact that, no income has accrued or received to the appellant during the assessment year under consideration to the extent of INR. 63,75,600/- as computed by the Learned A.O. and confirmed by the Learned CIT-A. On the facts and circumstance of the case the Learned CIT-A has erred rejecting the claim of the appellant. The appellant prays that no income has accrued or is received by the appellant to the extent of INR. 63,75,600/-. 3. On the facts & circumstances of the case the Learned CIT-A has erred in concluding that sum of INR. 63,75,600/- is chargeable to tax. The conclusion reached by Learned CIT-A is erroneous and contrary to the provisions of the law. 4. On the facts & circumstances of the case the Learned CIT-A has erred in concluding that Income has accrued to the appellant amounting to INR. 63,75,600/-. The conclusion reached by Learned CIT-A is erroneous. 5. The Learned CIT-A has erred in confirming the levy of interest u/s 234B at INR. 14,80,487/-. The appellant denies the liability of payment of interest U/s 234B. On the facts & circumsta....