Case Law- receipt of any advance or booking amount could not be treated as trading receipt - Professionals - Taxation - TIK Share
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Case Law- receipt of any advance or booking amount could not be treated as trading receipt


Rahul Rai

2014-01-19

Assessee being a developer of project, profit in its case would arise only on transfer of title of property and, therefore, receipt of any advance or booking amount could not be treated as trading receipt of year under consideration


[2013] Case Law

HIGH COURT OF GUJARAT

Commissioner of Income-tax-IV

v.

Shivalik Buildwell (P.) Ltd.*

AKIL KURESHI AND MS. HARSHA DEVANI, JJ.
TAX APPEAL NO. 1514 OF 2011
OCTOBER 8, 2012 

Section 5 of the Income-tax Act, 1961 - Income - Accrual of [Booking amount received by builder] - Assessee was a builder and developer - He received certain amount as advance from different parties - Assessing Officer added said amount to assessee's taxable income - Tribunal set aside addition made by Assessing Officer holding that assessee being a developer of project, profit in its case would arise only on transfer of title of property and, therefore, receipt of any advance or booking amount could not be treated as trading receipt of year under consideration - Whether on facts, impugned order passed by Tribunal deleting addition was to be upheld - Held, yes [Para 4] [In favour of assessee]

Rahul Rai

2014-01-19

I think the case law is silly one. It is already established mechanism to tax property transactions based om transfer of titles.

It is an unnecessory notice that client got. Believe this case law not only wasted time of assessee but also department.

There should be some law to prevent officers issue notices which looks non-sustanable.

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