ITO, WD-12(1), KOLKATA, Kolkata v. M/s White Cliff Properties (P) Ltd., Kolkata

ITA 1511/KOL/2015 | 2006-2007
Pronouncement Date: 10-11-2017 | Result: Dismissed

Appeal Details

RSA Number 151123514 RSA 2015
Assessee PAN AABCC2778F
Bench Kolkata
Appeal Number ITA 1511/KOL/2015
Duration Of Justice 1 year(s) 10 month(s) 19 day(s)
Appellant ITO, WD-12(1), KOLKATA, Kolkata
Respondent M/s White Cliff Properties (P) Ltd., Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 10-11-2017
Appeal Filed By Department
Tags No record found
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 10-11-2017
Assessment Year 2006-2007
Appeal Filed On 22-12-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH KOLKATA BEFORE SRI J. SUDHAKAR REDDY ACCOUNTANT MEMBER & SRI S.S. VISWANETHRA RAVI JUDICIAL MEMBER I.T.A. NO. 1511/KOL/2015 ASSESSMENT YEAR: 2006-07 ITO WD-12(1) KOLKATA......................APPELLANT WHITE CLIFF PROPERTIES (P) LTD.....RESPONDENT [PAN : AABCC 2778 F] APPEARANCES BY: SHRI KALYAN NATH ADDL. CIT(DR) APPEARED ON BEHALF OF THE APPELLANT. SHRI MIRAJ D. SHAH ADVOCATE APPEARING ON BEHALF OF THE RESPONDENT.. DATE OF CONCLUDING THE HEARING : OCTOBER 23 2017 DATE OF PRONOUNCING THE ORDER : NOVEMBER 10 2017 ORDER PER J. SUDHAKAR REDDY ACCOUNTANT MEMBER :- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-4 (HEREINAFTER THE LD. CIT(A)) DATED 15.10.2015 PASSED U/S 251/154/143(3)/147 OF THE INCOME TAX ACT 1961 (THE ACT) FOR THE ASSESSMENT YEAR 2006-07. 2. THE FACTS IN BRIEF THE ASSESSEE IS A COMPANY AND IS ENGAGED IN THE BUSINESS OF REAL ESTATE. HE ENTERED TO A DEVELOPMENT AGREEMENT WITH A DEVELOPER M/S NAVNEEL ISPAT PVT. LTD ON 09.08.2014. THIS WAS AN UNREGISTERED AGREEMENT. THE DEVELOPER WAS TO CONSTRUCT TWO IDENTICAL BUILDING BLOCKS ON THE LAND BELONGING TO THE ASSESSEE WHICH WAS SITUATED AT 5 DOVER PARK BALLYGUNGE KOLKATA 700 019. THE ASSESSEE WAS ALLOWED TO RETAIN ONE BUILDING BLOCK ALONG WITH 50% OF THE UNDIVIDED LAND AND CAR PARKING SPACE. IN CONSIDERATION THEREOF THE BUILDER HAD AGREED TO MAKE A 2 WHITE CLIFF PROPERTIES (P) LTD I.T.A. NO. 1511/KOL/2015 ASSESSMENT YEAR: 2006-07 PAYMENT OF RS.1 05 00 000/- TO THE ASSESSEE AND ALSO TO GIVE 50% OF THE SUPER BUILD UP AREA CONSTRUCTED TO THE ASSESSEE. THE AGREEMENT ALSO CONTAINED CLAUSES WHICH STATED THAT THE ASSESSEE HAS MADE ONLY AN ARRANGEMENT FOR UNDERTAKING OF CONSTRUCTION WORKS BY RETAINING ABSOLUTE CONTROL ON THE PROPERTY TILL COMPLETION OF CONSTRUCTION. THE AGREEMENT CONTAINED CLAUSES TO THE EFFECT THAT THE ASSESSEE RETAINED OF EFFECTIVE CONTROL AS (A) THE BUILDER IS NOT ENTITLED TO CHANGE THE PLAN WITHOUT ASSESSEES APPROVAL (B) THE BUILDER IS NOT ENTITLED TO WITH THE PROSPECTIVE BUYERS OF FLATS OBTAINED BY THE BUILDER (C) TIME WAS MADE AN ESSENCE OF THE CONTRACT ETC. 3. THE AO PASSED AN ORIGINAL ASSESSMENT ORDER U/S 143(3) FOR ASSESSMENT YEAR 2006-07 VIDE ORDER DATED 14.03.2013. THE CIT(A) BY ORDER DATED 14.03.2013 REMANDED THE MATTER TO THE FILE OF THE AO FOR VERIFICATION OF FACTS AND FOR DETERMINATION OF THE ISSUE AS TO WHETHER THE LONG-TERM CAPITAL GAIN IS TO BE ASSESSED FOR THE ASSESSMENT YEAR 2005-06 INSTEAD OF THE ASSESSMENT YEAR 2006-07. THE CIT(A) DIRECTED THAT IF BOTH ADVANCE FOR THE PROPERTY AND THE POSSESSION WAS GIVEN IN THE FINANCIAL YEAR 2004-05 THE SAME HAS TO BE TAXED FOR THE ASSESSMENT YEAR 2005-06. IN PURSUANCE IN THIS ORDER OF THE CIT(A) THE AO PASSED AN ORDER U/S 251 READ WITH SECTION 251/154/143(3)/147 OF THE INCOME TAX ACT 1961 DATED 27.12.2013 COMPUTING THE CAPITAL GAIN FOR THE A.Y 2006-07. 4. AGGRIEVED THE ASSESSEE CARRIED THE MATTER ON APPEAL. THE FIRST APPELLATE AUTHORITY CONSIDERED THE VARIOUS SUBMISSIONS OF THE ASSESSEE AND HELD AS FOLLOWS: 4.3 I HAVE CONSIDERED THE ASSESSMENT ORDER THE SUBMISSIONS AND DOCUMENTS SUBMITTED BY THE APPELLANT. I FIND THAT THE APPELLANT ENTERED INTO A JOINT VENTURE AGREEMENT WITH NAVNEEL ISPAT PVT. 3 WHITE CLIFF PROPERTIES (P) LTD I.T.A. NO. 1511/KOL/2015 ASSESSMENT YEAR: 2006-07 LTD VIDE AGREEMENT DATED 09.08.2004. AS PER THE AGREEMENT THE DEVELOPER WOULD CONSTRUCT TWO BLOCKS ON THE SAID LAND AND ONE BLOCK WOULD BE GIVEN TO THE DEVELOPER AS ITS SHARE AND THE BALANCE WOULD BE THE APPELLANT'S SHARE. THE DEVELOPER WAS ALSO TO PAY AN ADDITIONAL SUM OF RS.1 05 00 000/- TO THE APPELLANT OVER A PERIOD AS DEFINED IN CLAUSE 4 OF THE SAID AGREEMENT. I ALSO FIND THAT IN CLAUSE 4 OF THE SAID AGREEMENT IT IS MENTIONED THAT POSSESSION OF THE LAND WOULD BE WITH THE APPELLANT TILL THE COMPLETION OF THE PROJECT. THE APPELLANT RECEIVED A SUM OF RS.25 00 0001 VIDE CHEQUE DATED 10.08.2004 BEARING NUMBER 645063 AT THE TIME OF SIGNING THE AGREEMENT. ON PERUSAL OF THE AUDITED ACCOUNTS FOR THE FY 2004-05 I FIND THAT IN SCHEDULE-6 IN NOTE 5 THE APPELLANT HAD DISCLOSED THE FACTS REGARDING THE JOINT DEVELOPMENT AND ALSO THAT IT HAD RECEIVED RS.47 50 000/- FROM THE DEVELOPER AND THAT ON DEMOLITION OF THE EXISTING STRUCTURE A SUM OF RS.1 00 000 WAS EARNED BY SALE OF SCRAP WHICH HAD BEEN CREDITED TO LAND AND BUILDING ACCOUNT. I ALSO FIND THAT AN AGREEMENT WAS ENTERED ON 16.03.2005 BETWEEN THE APPELLANT DEVELOPER AND MAMTA CHAWLA AS THE PURCHASER BY WHICH THE FLAT NO 2A MEASURING 1839 SQ. FEET WAS AGREED TO BE SOLD. IN THE SAID AGREEMENT ON PAGE 6 IN CLAUSE V IT WAS RECORDED THAT BUILDING PLAN NO. 2004080172 WAS APPROVED BY THE KOLKATA MUNICIPAL CORPORATION ON 22.12.2004 AND IN CLAUSE W IT WAS RECORDED THAT THE DEVELOPER HAD STARTED THE CONSTRUCTION OF THE NEW BUILDING. ON PERUSAL OF ALL THESE EVIDENCES I FIND THAT THE APPELLANT HAS CLEARLY ESTABLISHED AND DEMONSTRATED THAT THE PERMISSIVE LICENSE TO ENTER UPON THE LAND AND CONSTRUCT THE BUILDING WHICH WAS GIVEN TO THE BUILDER WAS IN FY 2004-05. THE AO HAS IGNORED ALL THESE EVIDENCES AND HELD THAT THE POSSESSION WAS GIVEN ON 13.05.2005. I FIND THAT THERE IS NO MATERIAL TO SUPPORT THE FINDING OF THE AO IN THIS REGARD. IN FACT THE APPELLANT HAS BY VARIOUS DOCUMENTS INCLUDING AGREEMENTS BANK STATEMENT BUILDING PLAN ISSUED BY CORPORATION SALE AGREEMENT OF THE FLAT NOTES IN AUDITED ACCOUNTS HAS DEMONSTRATED THAT THE CONSTRUCTION ACTIVITY HAD STARTED IN FY 2004-05 AND NOT FY 2005-06. ACCORDINGLY I HOLD THAT THE CONSTRUCTION BY THE BUILDER ON THE SAID PREMISES WAS STARTED IN FY 2004-05. 4.4. I HAVE EXAMINED THE JOINT VENTURE AGREEMENT AND IN THE SAID AGREEMENT CONTAIN SEVERAL CLAUSES TO SUPPORT THE FACT THAT THE APPELLANT HAD MADE ONLY AN ARRANGEMENT FOR CONSTRUCTION WORKS RETAINING ABSOLUTE CONTROL ON THE PROPERTY TILL COMPLETION OF CONSTRUCTION. THE AGREEMENT CLAUSES NO 1.C 3.2 3.5 & 4.1 SHOW THE RETENTION OF POSSESSION AND EFFECTIVE CONTROL BY THE APPELLANT. I FIND THAT THE BUILDER WAS NOT ENTITLED TO CHANGE THE PLAN (CLAUSE 2.1 & 2.2) OR TO NEGOTIATE WITH THE PROSPECTIVE BUYERS FOR THE FLATS OBTAINABLE BY IT (CLAUSE 2.17). THUS FROM THE FACTS AND CIRCUMSTANCE THOUGH IT HAS BEEN EMANATING THAT THERE WAS NO TRANSFER AT ALL WITH REFERENCE TO THE PROVISIONS OF SECTION 2(47)(V) OF THE ACT OR NO TRANSACTION WAS EXECUTED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO SECTION 53A OF THE TRANSFER OF PROPERTIES ACT 1882 BY THIS JOINT VENTURE AGREEMENT AND THE BUILDER MERELY HELD PERMISSIVE LICENSE TO CONSTRUCT THE BUILDING ON THE LAND. AS PER THE AGREEMENT THE BUILDER WOULD GET POSSESSION ONLY ON COMPLETION OF THE PROJECT AS PER CLAUSE 4 OF THE AGREEMENT. I ALSO FIND THAT THE BUILDER VIDE LETTER DATED 21.07.2009 INFORMED THE APPELLANT THAT THE BUILDING WAS COMPLETED AND KMC HAD ISSUED A LETTER OF POSSESSION DATED 04.07.2009 AND ACCORDINGLY THE BUILDER REQUESTED FOR POSSESSION OF ITS SHARE I.E. BLOCK A. I ALSO FIND THAT THE APPELLANT VIDE LETTER DATED 23.07.2009 HANDED OVER THE ABSOLUTE POSSESSION OF THE 50% UNDIVIDED INTEREST IN THE LAND TO THE DEVELOPER. THUS THE POSSESSION OF THE LAND WAS GIVEN IN AY 2010-11 THEREFORE. I HOLD THAT THE TRANSACTION WAS TAXABLE IN AY 2010-11 AND IT WAS CORRECTLY OFFERED TO TAX BY THE APPELLANT IN AY 2010-11. 4.5. I FURTHER FIND THAT THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF BAISAKHI BHATTACHARJEE VS. SHAYAMAL BOSE & ORS. [2002 (4) CHN 115] (CAL.) HAS HELD AS FOLLOWS: 'DEVELOPMENT AGREEMENT COMES OUT OF THE SCOPE OF THE AMBIT OF SECTION 53A OF THE TRANSFER OF PROPERLY ACT. THEREFORE SECTION 53A OF THE TP ACT HAS NO MANNER OF APPLICATION TO A DEVELOPMENT AGREEMENT.' THUS AS PER THIS DECISION OF THE COURT THE JOINT DEVELOPMENT AGREEMENT DO NOT FALL UNDER SECTION 53A OF THE TP ACT. ONCE THIS IS SO THEN THE CLAUSE 2(47) OF THE IT ACT 1961 CANNOT BE APPLIED TO THE FACTS OF THE CASE AND IN FACT NO CAPITAL GAINS AROSE ON SIGNING OF THE JOINT DEVELOPMENT AGREEMENT. 4 WHITE CLIFF PROPERTIES (P) LTD I.T.A. NO. 1511/KOL/2015 ASSESSMENT YEAR: 2006-07 4.6. I THEREFORE HOLD THAT THERE WAS NO MATERIAL OR EVENT FOR THE TAXING OF CAPITAL GAINS ARISING FROM THE AGREEMENT THE APPELLANT HAS ENTERED INTO WITH A BUILDER I.E. M/S NAVNEEL LSPAT PRIVATE LIMITED ON 09.08.2004 DURING AY 2006-07. THE AO CHARGED THE INCOME TO CAPITAL GAINS IN AY 2006-07 WITHOUT ANY MATERIAL OR EVIDENCES. IN VIEW OF THIS I DO NOT FIND ANY JUSTIFICATION ON THE ACTION OF THE AO AND THEREFORE THE ADDITION OF RS.1 54 90 578 STANDS DELETED. 5. AGGRIEVED THE REVENUE IS IN APPEAL ON THE FOLLOWING GROUNDS: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WHILE DECIDING THE ISSUE OVERLOOKED THAT BUILDER AFTER GETTING RIGHT OF POSSESSION OF THE LAND FROM THE ASSESSEE STARTED CONSTRUCTION 13.05.2005 WHICH FURTHER OBVIOUS FROM THE AGREEMENT DATED 11.05.2005 ENTERED INTO BY THE ASSESSEE AND BUILDER WITH ONE PURCHASER WHICH IS IN FY 2005-06 RELEVANT TO THE ASSESSMENT YEAR IN QUESTION. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED BY NOT APPRECIATING THE FACT THAT ALL THE INGREDIENTS OF SEC. 2(47)(V) READ WITH SE. 53A OF THE TP ACT GOT FULFILLED IN FY 2005-06 AND HENCE LONG TERM CAPITAL GAIN WAS TAXABLE IN U/S. 45 OF THE ACT IN THE ASSESSMENT YEAR IN QUESTION. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED BY OVERLOOKING THAT SEC. 50C OF THE ACT DOES NOT MAKE ANY DISTINCTION IN THE TRANSFER OF CAPITAL ASSET BEING LAND OR BUILDING OR BOTH OR THE RIGHT IN SUCH PROPERTY. 4. THE APPELLANT CRAVES LEAVE TO ADD/DELETE/MODIFY THE GROUNDS OF APPEAL. 6. WE HAVE HEARD SHRI KALYAN NATH LD. ADDL. CIT ON BEHALF OF THE REVENUE AND SHRI MIRAJ D. SHAH LD. COUNSEL ON BEHALF OF THE ASSESSEE. THE FOLLOWING FACTS ARE UNDISPUTED: (A) THE JOINT DEVELOPMENT AGREEMENT DATED 09.08.2014 IS REGISTERED; (B) THE BUILDER M/S NAVNEEL ISPAT PVT. LTD PAID AN AMOUNT OF RS.47 50 000/- TO THE ASSESSEE DURING THE F.Y 2004-05 TO FACILITATE THE CONSTRUCTION. (C) THE EXISTING BUILDING ON THE LAND WAS DEMOLISHED DURING THE F.Y. 2004-05 TO FACILITATE THE CONSTRUCTION AND THE SCRAP ARISING FROM DEMOLITION WAS SOLD FOR RS.1 00 000/- DURING THE F.Y 2004-05. (D) THE BUILDING PLAN WAS APPROVED BY MUNICIPAL CORPORATION ON 22.12.2004. 5 WHITE CLIFF PROPERTIES (P) LTD I.T.A. NO. 1511/KOL/2015 ASSESSMENT YEAR: 2006-07 7. THE ASSESSEE ENTERED INTO AN AGREEMENT TO SELL A FLAT TO ONE MAMTA CHAWLA AND ANOTHER VIDE AGREEMENT DATED 16.03.2005 IN WHICH IT WAS RECORDED THAT THE CONSTRUCTION OF THE BUILDING HAD COMMENCED. THE ASSESSEE HAD OFFERED TO TAX THE CAPITAL GAINS ON THIS TRANSFER ARISING OUT OF THIS DEVELOPMENT AGREEMENT DURING THE F.Y 2010-11. ON THESE FACTS THE ISSUE TO BE ADJUDICATED AS TO WHETHER THE INCOME ON THIS TRANSACTION CAN BE BROUGHT TO TAX DURING THE A.Y 2005-06 OR A.Y. 2006-07 OR IN THE A.Y 2010- 11. 8. THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF S. RAGHURAMI REDDY VS. ITO IN ITA NO.296/HYD/2003 DATED 30.07.2004 ON THIS ISSUE HELD AS FOLLOWS: 18. EVEN OTHERWISE FOR THE PURPOSE OF LEVY OF TAX ON THE CAPITAL GAIN ARISING FROM THE TRANSFER OF CAPITAL ASSET TWO CONDITIONS ARE TO BE SATISFIED VIZ. 1) THERE SHOULD BE A TRANSFER WITHIN THE MEANING OF SEC. 2(47) OF THE ACT AND 2) THE COMPUTATION PROVISION AS SPECIFIED UNDER SEC. 48 SHOULD BE SATISFIED. THE HONBLE SUPREME COURT IN THE CASE OF CIT BANGALORE VS. B.C. SRINIVASA SETTY 128 ITR 294 HELD AT PAGE 295 (HEAD-NOTE) AS FOLLOWS: THE CHARGING SECTION AND THE COMPUTATION PROVISIONS TOGETHER CONSTITUTE AN INTEGRATED CODE. WHEN THERE IS A CASE TO WHICH THE COMPUTATION PROVISIONS CANNOT APPLY AT ALL IT IS EVIDENT THAT SUCH A CASE WAS NOT INTENDED TO FALL WITH THE CHARGING SECTION. ALL TRANSACTIONS ENCOMPASSED BY SECTION 45 MUST FALL UNDER THE GOVERNANCE OF ITS COMPUTATION PROVISIONS. A TRANSACTION TO WHICH THOSE PROVISIONS CANNOT BE APPLIED MUST BE REGARDED AS NEVER INTENDED BY SECTION 45 TO BE THE SUBJECT OF THE CHARGE. WHAT IS CONTEMPLATED BY SECTION 48(II) IS AN ASSET IN THE ACQUISITION OF WHICH IT IS POSSIBLE TO ENVISAGE A COST IT MUST BE AN ASSET WHICH POSSESSES THE INHERENT QUALITY OF BEING AVAILABLE ON THE EXPENDITURE OF MONEY TO A PERSON SEEKING TO ACQUIRE IT. NONE OF THE PROVISIONS PERTAINING TO THE HEAD CAPITAL GAINS SUGGESTS THAT THEY INCLUDE AN ASSET IN THE ACQUISITION OF WHICH NO COST AT ALL CAN BE CONCEIVED. WHEN GOODWILL GENERATED IN A NEW BUSINESS IS SOLD AND THE CONSIDERATION BROUGHT TO TAX WHAT IS CHARGED IS THE CAPITAL VALUE OF THE ASSET AND NOT ANY PROFIT OR GAIN. FURTHER THE DATE OF ACQUISITION OF THE ASSET IS A MATERIAL FACTOR IN APPLYING THE COMPUTATION PROVISIONS PERTAINING TO CAPITAL GAIN: BUT IN THE CASE OF GOODWILL GENERATED IN A NEW BUSINESS IT IS NOT POSSIBLE TO DETERMINE THE DATE WHEN IT COMES INTO EXISTENCE. 19. UNDER SEC. 48 OF THE ACT INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAINS SHALL BE COMPUTED BY DEDUCTING FROM THE FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF THE CAPITAL ASSET.... 6 WHITE CLIFF PROPERTIES (P) LTD I.T.A. NO. 1511/KOL/2015 ASSESSMENT YEAR: 2006-07 20. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. TEXSPIN ENGG. AND MFG. WORKS 263 ITR 345 AT PAGES 354 AND 355 HELD AS FOLLOWS: EVEN ASSUMING FOR THE SAKE OF ARGUMENT THAT THERE IS A TRANSFER OF A CAPITAL ASSET UNDER SECTION 45(1) BECAUSE OF THE DEFINITION OF THE WORD TRANSFER IN SECTION 2(47)(III) EVEN THEN WE ARE OF THE VIEW THAT THE LIABILITY TO PAY CAPITAL GAINS TAX WOULD NOT ARISE BECAUSE SECTION 45(1) IS REQUIRED TO BE READ WITH SECTION 48 WHICH PROVIDES FOR MODE OF COMPUTATION. THESE TWO SECTIONS ARE REQUIRED TO BE READ TOGETHER AS THE CHARGING SECTION AND THE COMPUTATION SECTION CONSTITUTE ONE PACKAGE. NOW UNDER SEC. 48 IT IS LAID DOWN INTER ALIA THAT THE INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAINS SHALL BE COMPUTED BY DEDUCTING FROM THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUED AS A RESULT OF THE TRANSFER THE COST OF ACQUISITION OF THE ASSET AND THE EXPENDITURE INCURRED IN CONNECTION WITH THE TRANSFER. SECTION 45(4) IS MUTUALLY EXCLUSIVE TO SECTION 45(1). SECTION 45(4) CATEGORICALLY STATES THAT WHERE THERE IS A TRANSFER BY WAY OF DISTRIBUTION OF CAPITAL ASSETS AND WHERE SUCH TRANSFER IS DUE TO DISSOLUTION OR OTHERWISE OF THE FIRM THE ASSESSING OFFICER WAS ENTITLED TO TREAT THE MARKET VALUE OF THE ASSET ON THE DATE OF THE TRANSFER AS FULL VALUE OF THE CONSIDERATION RECEIVED/ACCRUING UNDER SECTION 48 DE HORS SECTION 45(4) THEN THE EXPRESSION FULL VALUE OF CONSIDERATION IN SECTION 48 CANNOT BE THE MARKET VALUE OF THE CAPITAL ASSET ON THE DATE OF TRANSFER. IN SUCH A CASE WE HAVE TO READ THE SAID EXPRESSION IN THE LIGHT OF THE TWO JUDGMENTS OF THE SUPREME COURT IN THE CASE OF CIT VS. GEORGE HENDERSON AND CO. LTD. [1967] 66 ITR 622 AND IN THE CASE OF CIT VS. GILLANDERS ARBUTHNOT AND CO. [1973] 87 ITR 407 IN WHICH IT HAS BEEN HELD THAT THE EXPRESSION FULL VALUE OF CONSIDERATION DOES NOT MEAN THE MARKET VALUE OF THE ASSET TRANSFERRED BUT IT SHALL MEAN THE PRICE BARGAINED FOR BY THE PARTIES TO THE TRANSACTION. IT HAS BEEN FURTHER HELD THAT THE CONSIDERATION FOR THE TRANSFER OF A CAPITAL ASSET IS WHAT THE TRANSFEROR RECEIVES IN LIEU OF THE ASSETS HE PARTS WITH VIZ. MONEY OR MONEYS WORTH AND THEREFORE THE VERY ASSET TRANSFERRED OR PARTED WITH CANNOT BE THE CONSIDERATION FOR THE TRANSFER AND THEREFORE THE EXPRESSION FULL VALUE OF THE CONSIDERATION CANNOT BE CONSTRUED AS HAVING REFERENCE TO THE MARKET VALUE OF THE ASSET TRANSFERRED AND THAT THE SAID EXPRESSION ONLY MEANS THE FULL VALUE OF THE THINGS RECEIVED BY THE TRANSFEROR IN EXCHANGE FOR THE CAPITAL ASSET TRANSFERRED BY HIM. 21. IN THE CASE ON HAND THERE IS NO CONSIDERATION RECEIVED BY THE ASSESSEE AS ON THE DATE OF EXECUTION OF THE AGREEMENT. IT CANNOT ALSO BE SAID THAT AS ON THE DATE OF EXECUTION OF THE AGREEMENT CONSIDERATION HAD ACCRUED TO THE ASSESSEE. THE JOINT VENTURE OR DEVELOPMENT AGREEMENT SPECIFIES THAT CERTAIN PART OF THE CONSTRUCTED AREA SHALL BE SURRENDERED BY THE OWNER TO THE BUILDER ON THE COMPLETION OF THE CONTRACT. THE CONCEPT OF ACCRUAL HAD BEEN EXPLAINED BY THE APEX COURT IN A NUMBER OF JUDGMENTS. THE ACTUALITY OF THE SITUATION HAS TO BE INTO ACCOUNT. WHETHER AN ACCRUAL HAS TAKEN PLACE OR NOT MUST BE JUDGED ON THE PRINCIPLES OF THE REAL INCOME THEORY TAKING THE PROBABILITY OR IMPROBABILITY OF REALIZATION IN A REALISTIC MANNER. WHETHER INCOME HAS REALLY MATERIALIZED TO THE ASSESSEE HAS TO BE CONSIDERED WITH REFERENCE TO COMMERCIAL AND BUSINESS REALITIES OF THE SITUATION. IN THE CASE OF CIT VS. A. GAJAPATHY NAIDU 53 ITR 114 DECIDED BY THE HONBLE SUPREME COURT THE ASSESSEE WHO SUPPLIED BREAD TO A GOVERNMENT HOSPITAL. UNDER A REPRESENTATION TO THE GOVERNMENT AFTER THE CLOSE OF THE YEAR THAT HE HAD INCURRED LOSS THE GOVERNMENT DIRECTED PAYMENT OF THE SUM OF RS. 12 447 TO THE ASSESSEE BY WAY OF COMPENSATION I.E. THE LOSS SUSTAINED IN RESPECT OF THE SUPPLY OF BREAD. THAT AMOUNT WAS RECEIVED BY THE ASSESSEE IN THE ACCOUNTING YEAR 1950-51. IT WAS HELD BY THE HONBLE SUPREME COURT (AS PER HEAD-NOTE): THAT THE AMOUNT OUGHT TO BE INCLUDED IN THE PROFITS OF THE YEAR 1950-51 RELEVANT TO THE ASSESSMENT YEAR 1951-52 AND THAT IT COULD NOT BE RELATED BACK TO THE EARLIER YEAR DURING WHICH THE ASSESSEE ACTUALLY SUPPLIED BREAD TO THE HOSPITAL. IN CIT VS. ASHOBHAI CHIMANBHAI 56 ITR 42 HONBLE SUPREME COURT HELD (AS PER HEAD-NOTE) THE WORDS ACCRUE AND ARISE ARE USED TO CONTRADISTINGUISH THE WORD RECEIVE INCOME IS SAID TO BE RECEIVED WHEN IT REACHES THE ASSESSEE; WHEN THE RIGHT TO RECEIVE THE INCOME BECOMES VESTED IN THE ASSESSEE IT IS SAID TO ACCRUE OR ARISE. 7 WHITE CLIFF PROPERTIES (P) LTD I.T.A. NO. 1511/KOL/2015 ASSESSMENT YEAR: 2006-07 INCOME BECOMES TAXABLE ON THE FOOTING OF ACCRUAL ONLY AFTER THE RIGHT OF THE TAXPAYER TO THE INCOME ACCRUES OR ARISES; AND IN THE CASE OF AN AGREEMENT WHICH MAKES PROFITS ARE THE RESULT OF TRANSACTIONS SPREAD OVER A PERIOD WHICH COVERS A PERIOD PRECEDING THE HAPPENING OF THAT CONTINGENCY WOULD NOT MAKE THE RECEIPT LIABLE TO BE PAID TO PERSONS OTHER THAN THOSE ARE ENTITLED TO RECEIVE IT ON THE DATE ON WHICH IT IS ACTUALLY RECEIVED OR BECAME RECEIVABLE. SIMILAR ARE THE JUDGMENTS IN THE CASES REPORTED IN 179 ITR 8 (CAL) 247 ITR 457 (GUJ) AND 105 ITR 627 (KER). 21. THE HONBLE SUPREME COURT IN THE CASE OF SUNIL SIDDHART BHAI VS. CIT 56 ITR 509 AT PAGE 522 HELD AS FOLLOWS: THE COURT PROCEEDED ON THE BASIS THAT IN WORKING OUT CAPITAL GAIN OR LOSS THE PRINCIPLES WHICH HAD TO BE APPLIED ARE THOSE WHICH ARE A PART OF COMMERCIAL PRACTICE OR WHICH AN ORDINARY MAN OF BUSINESS WOULD RESORT TO WHEN MAKING COMPUTATION FOR HIS BUSINESS PURPOSES. IT WILL BE NOTICED THAT THIS PRINCIPLE WAS APPLIED BY THE COURT IN A CASE WHERE A CAPITAL GAIN WAS SOUGHT TO BE TAXED UNDER THE INCOME TAX ACT. THAT PROFITS OR GAINS UNDER THE INCOME TAX ACT MUST BE UNDERSTOOD IN THE SENSE OF REAL PROFITS OR GAINS THAT IS TO SAY ON THE ORDINARY COMMERCIAL PRINCIPLES ON WHICH ACTUAL PROFITS ARE COMPUTED A SENSE IN WHICH NO COMMERCIAL MAN WOULD MISUNDERSTAND HAD BEEN REGARDED AS A PRINCIPLE OF GENERAL APPLICATION AND THERE IS A CATENA OF CASES OF THIS COURT WHICH AFFIRMS THAT PRINCIPLE. REFERENCE MAY BE MADE TO CALCUTTA CO. LTD. VS. CIT [1959] 37 ITR 1 (SC) CIT VS. BAI SHIRINBAI KOOKA [1962] 46 ITR 86 (SC) POONA ELECTRIC SUPPLY CO. LTD. VS. CIT [1965] 57 ITR 521 (SC) CIT VS. BIRLA GWALIOR (P) LTD. [1973] 89 ITR 266 (SC) AND BATNA TEXTILES VS. ITO [1975] 98 ITR 1 (KER). 22. IN THIS CASE IT CANNOT BE SAID THAT THE RIGHT TO RECEIVE ACCRUED BEFORE THE START OF CONSTRUCTION AND BEFORE THE HAPPENING OF CERTAIN CONTINGENCIES AND FULFILMENT OF CONDITIONS STIPULATED IN THE AGREEMENT. HENCE THE CONSIDERATION IN QUESTION NEITHER WAS RECEIVED NOR ACCRUED IN THE IMPUGNED ASSESSMENT YEAR. IN THIS CASE THE ASSET ITSELF IS IN THE WOMB OF THE FUTURE AND THE ASSESSEE CANNOT BE SAID TO HAVE CRYSTALLIZED RIGHT TO RECEIVE A NON-EXISTING ASSET AS ON THE DATE OF ENTERING INTO THE DEVELOPMENT AGREEMENT. THE RIGHT TO RECEIVE CRYSTALLISES ON PERFORMANCE OF THE CONDITIONS OF THE AGREEMENT. THE POSITION IN THIS CASE IS SIMILAR TO THE POSITION IN THE CASE OF ANY CIVIL CONTRACT. THE CONSIDERATION IN THIS CASE IS IN KIND AND IN A WORKS CONTRACT IT IS IN CASH. IF AN ASSESSEE SIGNS A CONTRACT TO CONSTRUCT A DAM AND TAKES OVER POSSESSION OF THE SITE FOR A DEFINITE CONSIDERATION IT CANNOT BE SAID THAT THE YEAR OF SIGNING OF THE AGREEMENT IS THE YEAR IN WHICH THE RIGHT TO RECEIVE CONSIDERATION ACCRUED. IT CANNOT ALSO BE SAID THAT THE EXPENDITURE ACCRUED. THE RIGHT TO RECEIVE IS SUBJECT TO FULFILMENT OF MANY ACTS AND CONDITIONS. ON PERFORMANCE OF THE CONTRACT THE RIGHT ACCRUES IN THE REAL SENSE OF THE TERM. HOLDING OTHERWISE WOULD LEAD TO A RIDICULOUS SITUATION WHEREIN ALL CONTRACTS WOULD BE BROUGHT TO TAX ON THE DATE OF SIGNING OF THE AGREEMENT ITSELF. 23. THE FULL VALUE OF CONSIDERATION IS THE CASE ON HAND BY APPLYING THE RATIO OF THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF TEXSPIN ENGG. AND MFG. WORKS (SUPRA) AND THE ORDER OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF SMT. VASAVI PRATAP CHAND (SUPRA) IS ONLY THE COST OF CONSTRUCTION OF THE PROPOSED BUILDING TO THE EXTENT OF THE SHARE WHICH FALLS TO THE OWNER IN THE ULTIMATELY CONSTRUCTED AREA AND NOT THE MARKET VALUE OF SUCH SHARE OF CONSTRUCTED AREA WHICH MAY BE AFTER THE COMPLETION OF CONSTRUCTION. 24. IN OUR CONSIDERED VIEW IT IS NOT POSSIBLE TO ESTIMATE SUCH CONSIDERATION WITH REASONABLE ACCURACY AS ON THE DATE OF SIGNING OF THE DEVELOPMENT AGREEMENT. TO ESTIMATE THE COST OF CONSTRUCTION TWO FACTORS HAVE TO BE KNOWN. THE FIRST IS THE TOTAL AREA THAT THE BUILDER PROPOSES TO SEEK PERMISSION FOR FROM THE MUNICIPAL OR LOCAL AUTHORITIES AND ALSO AS TO THE NUMBER OF FLOORS AND AREA THAT THE LOCAL AUTHORITY OR MUNICIPAL CORPORATION WOULD ULTIMATELY PERMIT TO BE CONSTRUCTED. IF THERE IS A VARIATION IN AREA PERMITTED THE ENTIRE CALCULATION WILL GET AFFECTED. THE SECOND FACTOR IS THE TYPE OF CONSTRUCTION. IT IS COMMON KNOWLEDGE THAT THE COST OF CONSTRUCTION DEPENDS ON THE QUALITY OF MATERIAL TO BE USED ETC. 8 WHITE CLIFF PROPERTIES (P) LTD I.T.A. NO. 1511/KOL/2015 ASSESSMENT YEAR: 2006-07 THE COST ALSO DEPENDS ON THE TIME TAKEN FOR CONSIDERATION. THE ESCALATION IN PRICES OF MATERIAL AND LABOUR COSTS IS AGAIN A PREDICTION OF THE FUTURE. 25. IN OUR CONSIDERED OPINION IT WOULD BE A FIGMENT OF IMAGINATION TO REASONABLY ESTIMATE THE CONSIDERATION THAT CAN BE SAID TO HAVE ACCRUED AS ON THE DATE OF AGREEMENT AS THE QUANTUM IS INDETERMINATE THE QUALITY IS INDETERMINATE AND THE ESCALATION BASED ON TIME IS INDETERMINATE. THE QUANTUM OF INCOME ARRIVED AT ON SUCH PROJECTIONS BASED ON A NUMBER OF ASSUMPTIONS AND PROBABILITIES CAN ONLY BE A HYPOTHETICAL INCOME BUT NOT REAL INCOME. THIS REMINDS US OF THE PROVERB COUNTING THE CHICKENS BEFORE THEY ARE HATCHED. WHEN THE INCOME IN QUESTION IS ONLY HYPOTHETICAL THE QUESTION OF THE SAME ACCRUING DOES NOT ARISE IN THE IMPUGNED ASSESSMENT YEAR. 26. TO ILLUSTRATE THE PRACTICAL PROBLEM FURTHER A SITUATION MAY ARISE WHEREIN THE MUNICIPAL CORPORATION MAY PERMIT CONSTRUCTION OF ADDITIONAL FLOORS OR MAY ALSO RESTRICT OR REDUCE THE AREA THAT CAN BE CONSTRUCTED AT A FUTURE DATE. THESE THINGS ARE NOT UNCOMMON. IN THE EVENTUALITY OF SUCH AN EVENT HAPPENING THE QUANTIFICATION OF INCOME WHICH IS SAID TO HAVE ACCRUED CHANGES. AS THIS HAPPENS AT A LATER POINT OF TIME I.E. A PERIOD ANTERIOR TO THE DATE OF EXECUTION OF THE DEVELOPMENT AGREEMENT THE ASSESSMENT MAY HAVE TO BE REOPENED AND THE VALIDITY OF SUCH REOPENING MAY BE CHALLENGED OR CLAIMS MAY BE MADE THAT THE CAPITAL RECEIPT OR LOSS ACCRUES IN THAT PARTICULAR YEAR AND THAT AS IT IS NOT ACCEPTED WITH TRANSFER THERE IS NO INCOME AT THAT POINT OF TIME. THUS UNDER THIS FACTS AND CIRCUMSTANCES OF THE CASE WE HOLD THAT NO REAL INCOME AROSE DURING THE SAID ASSESSMENT YEAR. 27. THUS ON THIS COUNT ALSO THE YEAR OF TAXABILITY CAN BE ONLY THE ASSESSMENT YEAR 1992-93 I.E. THE YEAR IN WHICH THE FLATS ARE HANDED OVER BY THE BUILDER TO THE ASSESSEE AND NOT THE YEAR IN WHICH THE JOINT VENTURE OR DEVELOPMENT AGREEMENT WAS ENTERED INTO. THUS THE ASSESSEE HAD RIGHTLY OFFERED TO TAX THE CAPITAL GAINS ARISING FROM THE PROPERTY IN THE ASSESSMENT YEAR 1992-93. WE THEREFORE UPHOLD THE CONTENTION OF THE ASSESSEE IN THIS REGARD AND ALLOW THIS GROUND OF THE ASSESSEE. 9. THE ABOVE PROPOSITION OF LAW LAID DOWN BY THE HYDERABAD BENCH OF THE TRIBUNAL HAVE BROADLY BEEN APPROVED IN THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. BALBIR SINGH MANI IN CIVIL APPEAL NO.15619 OF 2007 JUDGMENT DATED 4 TH OCTOBER 2007 WHEREAS PARA 24 ONWARDS IT HAS HELD AS FOLLOWS: 24. THE MATTER CAN ALSO BE VIEWED FROM A SLIGHTLY DIFFERENT ANGLE. SHRI VOHRA IS RIGHT WHEN HE HAS REFERRED TO SECTIONS 45 AND 48 OF THE INCOME TAX ACT AND HAS THEN ARGUED THAT SOME REAL INCOME MUST 'ARISE' ON THE ASSUMPTION THAT THERE IS TRANSFER OF A CAPITAL ASSET. THIS INCOME MUST HAVE BEEN RECEIVED OR HAVE 'ACCRUED' UNDER SECTION 48 AS A RESULT OF THE TRANSFER OF THE CAPITAL ASSET. 25. THIS COURT IN E.D. SASSOON & CO. LTD. V. CIT (1955) 1 SCR 313 AT 343 HELD: 'LT IS CLEAR THEREFORE THAT INCOME MAY ACCRUE TO AN ASSESSEE WITHOUT THE ACTUAL RECEIPT OF THE SAME. IF THE ASSESSEE ACQUIRES A RIGHT TO RECEIVE THE INCOME THE INCOME CAN BE SAID TO HAVE ACCRUED TO HIM THOUGH IT MAY BE RECEIVED LATER ON ITS BEING ASCERTAINED. THE BASIC CONCEPTION IS THAT HE MUST HAVE ACQUIRED A RIGHT TO RECEIVE THE INCOME. THERE MUST BE A DEBT OWED TO HIM BY SOMEBODY. THERE MUST BE AS IS OTHERWISE EXPRESSED DEBITUM IN PRESENTI SOLVENDUM IN FUTURO; SEE W.S. TRY LTD. V. JOHNSON (INSPECTOR OF TAXES) [(1946) 1- AER 532 AT P. 539] AND WEBB V. STENTON GARNISHEES [11 QBD 518 AT P.522 AND 527]. UNLESS AND UNTIL THERE IS CREATED IN FAVOUR OF THE ASSESSEE A DEBT DUE BY SOMEBODY IT CANNOT BE SAID THAT HE HAS ACQUIRED A RIGHT TO RECEIVE THE INCOME OR THAT INCOME HAS ACCRUED TO HIM.' 9 WHITE CLIFF PROPERTIES (P) LTD I.T.A. NO. 1511/KOL/2015 ASSESSMENT YEAR: 2006-07 26. THIS COURT IN COMMISSIONER OF INCOME TAX V. EXCEL LNDUSTRIES (2014) 13 SCC 459 AT 463-464 REFERRED TO VARIOUS JUDGMENTS ON THE EXPRESSION 'ACCRUES' AND THEN HELD: '14. FIRST OF ALL IT IS NOW WELL SETTLED THAT INCOME TAX CANNOT BE LEVIED ON HYPOTHETICAL INCOME. LN CIT V. SHOORJI VALLABHDAS AND CO. [CLT V. SHOORJI VALLABHDAS AND CO. (1962) 46 ITR 144 (SC)L IT WAS HELD AS FOLLOWS: (ITR P. 148) '...INCOME TAX IS A LEVY ON INCOME. NO DOUBT THE INCOME TAX ACT TAKES INTO ACCOUNT TWO POINTS OF TIME AT WHICH THE LIABILITY TO TAX IS ATTRACTED VIZ. THE ACCRUAL OF THE INCOME OR ITS RECEIPT; BUT THE SUBSTANCE OF THE MATTER IS THE INCOME. IF INCOME DOES NOT RESULT AT ALL THERE CANNOT BE A TAX EVEN THOUGH IN BOOKKEEPING AN ENTRY IS MADE ABOUT A 'HYPOTHETICAL INCOME' WHICH DOES NOT MATERIALIZE. WHERE INCOME HAS IN FACT BEEN RECEIVED AND IS SUBSEQUENTLY GIVEN UP IN SUCH CIRCUMSTANCES THAT IT REMAINS THE INCOME OF THE RECIPIENT EVEN THOUGH GIVEN UP THE TAX MAY BE PAYABLE. WHERE HOWEVER THE INCOME CAN BE SAID NOT TO HAVE RESULTED AT ALL THERE IS OBVIOUSLY NEITHER ACCRUAL NOR RECEIPT OF INCOME EVEN THOUGH AN ENTRY TO THAT EFFECT MIGHT IN CERTAIN CIRCUMSTANCES HAVE BEEN MADE IN THE BOOKS OF ACCOUNT.' 15. THE ABOVE PASSAGE WAS CITED WITH APPROVAL IN MORVI INDUSTRIES LTD. V. CIT [MORVI INDUSTRIES LTD. V. CLT (1972) 4 SCC 451 : 1974 SCC (TAX) 140: (1971) 82 ITR 835] IN WHICH THIS COURT ALSO CONSIDERED THE DICTIONARY MEANING OF THE WORD 'ACCRUE' AND HELD THAT INCOME CAN BE SAID TO ACCRUE WHEN IT BECOMES DUE. LT WAS THEN OBSERVED THAT: (SCC P. 454 PARA 11) '11-. ... THE DATE OF PAYMENT ... DOES NOT AFFECT THE ACCRUAL OF INCOME. THE MOMENT THE INCOME ACCRUES THE ASSESSEE GETS VESTED WITH THE RIGHT TO CLAIM THAT AMOUNT EVEN THOUGH IT MAY NOT BE IMMEDIATELY.' 16. THIS COURT FURTHER HELD AND IN OUR OPINION MORE IMPORTANTLY THAT INCOME ACCRUES WHEN THERE 'ARISES A CORRESPONDING LIABILITY OF THE OTHER PARTY FROM WHOM THE INCOME BECOMES DUE TO PAY THAT AMOUNT'. 17 . IT FOLLOWS FROM THESE DECISIONS THAT INCOME ACCRUES WHEN IT BECOMES DUE BUT IT MUST ALSO BE ACCOMPANIED BY A CORRESPONDING LIABILITY OF THE OTHER PARTY TO PAY THE AMOUNT. ONLY THEN CAN IT BE SAID THAT FOR THE PURPOSES OF TAXABILITY THAT THE INCOME IS NOT HYPOTHETICAL AND IT HAS REALLY ACCRUED TO THE ASSESSEE. 18. LN SO FAR AS THE PRESENT CASE IS CONCERNED EVEN IF IT IS ASSUMED THAT THE ASSESSEE WAS ENTITLED TO THE BENEFITS UNDER THE ADVANCE LICENSES AS WELL AS UNDER THE DUTY ENTITLEMENT PASSBOOK THERE WAS NO CORRESPONDING LIABILITY ON THE CUSTOMS AUTHORITIES TO PASS ON THE BENEFIT OF DUTY-FREE IMPORTS TO THE ASSESSEE UNTIL THE GOODS ARE ACTUALLY IMPORTED AND MADE AVAILABLE FOR CLEARANCE. THE BENEFITS REPRESENT AT BEST A HYPOTHETICAL INCOME WHICH MAY OR MAY NOT MATERIALIZE AND ITS MONEY VALUE IS THEREFORE NOT THE INCOME OF THE ASSESSEE.' 27. IN THE FACTS OF THE PRESENT CASE IT IS CLEAR THAT THE INCOME FROM CAPITAL GAIN ON A TRANSACTION WHICH NEVER MATERIALIZED IS AT BEST A HYPOTHETICAL INCOME. IT IS ADMITTED THAT FOR WANT OF PERMISSIONS THE ENTIRE TRANSACTION OF DEVELOPMENT ENVISAGED IN THE JDA FELL THROUGH. IN POINT OF FACT INCOME DID NOT RESULT AT ALL FOR THE AFORESAID REASON. THIS BEING THE CASE IT IS CLEAR THAT THERE IS NO PROFIT OR GAIN WHICH ARISES FROM THE TRANSFER OF A CAPITAL ASSET WHICH COULD BE BROUGHT TO TAX UNDER SECTION 45 READ WITH SECTION 48 OF THE INCOME TAX ACT. 28. IN THE PRESENT CASE THE ASSESSEE DID NOT ACQUIRE ANY RIGHT TO RECEIVE INCOME INASMUCH AS SUCH ALLEGED RIGHT WAS DEPENDENT UPON THE NECESSARY PERMISSIONS BEING OBTAINED. THIS BEING THE CASE IN THE CIRCUMSTANCES THERE WAS NO DEBT OWED TO THE ASSESSEES BY THE DEVELOPERS AND THEREFORE THE ASSESSEES HAVE NOT ACQUIRED ANY RIGHT TO RECEIVE INCOME UNDER THE JDA. THIS BEING SO NO PROFITS OR GAINS AROSE FROM THE TRANSFER OF A CAPITAL ASSET SO AS TO ATTRACT SECTIONS 45 AND 48 OF THE INCOME TAX ACT. 10 WHITE CLIFF PROPERTIES (P) LTD I.T.A. NO. 1511/KOL/2015 ASSESSMENT YEAR: 2006-07 29. WE ARE THEREFORE OF THE VIEW THAT THE HIGH COURT WAS CORRECT IN ITS CONCLUSION BUT FOR THE REASONS STATED BY US HEREINABOVE. THE APPEALS ARE DISMISSED WITH NO ORDER AS TO COSTS. 10. IN VIEW OF THE ABOVE PROPOSITION OF LAW DISCUSSED ABOVE WE APPLY THE REAL INCOME THEORY & UPHOLD THE ORDER OF THE LD. CIT(A). THE INCOME IN QUESTION IS TAXABLE ONLY IN THE A.Y 2010-11. 11. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. KOLKATA THE 10 TH NOVEMBER 2017. SD/- SD/- [ S.S. VISWANETHRA RAVI ] [J. SUDHAKAR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 10.11.2017 RS SPS COPY OF THE ORDER FORWARDED TO: 1 . ITO WARD-12(1) KOLKATA AAYAKAR BHAWAN P-7 CHOWRINGHEE SQUARE KOLKATA 700 069. 2 . M/S WHITE CLIFF PROPERTIES (P) LTD. A2 BALLYGUNGE PARK TOWERS 67B BALLYGUNGE CIRCULAR ROAD KOLKATA 700 019. 3. CIT(A)- 4. CIT- 5. CIT(DR) TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY HEAD OF OFFICE/ D.D.O. ITAT KOLKATA BENCHES