CIT Vs Ansal Properties And Industries (Delhi High Court)
Delhi High Court held that security deposit which is nothing more than sale consideration hence the same used as a devise to postpone tax liability towards an uncertain date. Accordingly, the said question is answered in favour of revenue.
Facts- The present petition has been preferred by the revenue on the question of law that whether the Tribunal was correct in law in holding that the amount of Rs.42 crore was taken by the assessee as security and the same cannot be termed as undisclosed income and as such outside the purview of block assessment under Chapter XIV-B of Income Tax Act, 1961?
Conclusion- Held that one of the most fundamental bases amongst the other important considerations is that if new materials or documents come to light, the assessee’s income can be revisited and additional amounts brought to tax. Having regard to these objectives, and the mandate of Section 158B(b), the sum of `42 lakhs brought to tax by the AO in the entire circumstances of the case was reasonable given the materials seized, the survey conducted and the statements recorded during the course of assessment proceedings. All these clearly reveal that the security deposit was a mere camouflage or a devise to postpone tax liability towards an uncertain date, at the convenience of the assessee. Clearly, the amount received pursuant to the agreement and the conveyances executed thereafter, showed that the intent of the parties was to treat it as a final consideration payable and paid in presenti. For these reasons, the first question is to be answered in favor of the Revenue and against the assessee.
