CIT Vs Lok Housing & Constructions Limited (Bombay High Court)
Bombay High Court held that no hypothetical income of the assessee could have been brought to tax. Accordingly, income not accrued due to cancellation of sale agreement. Thus, order upheld and appeal of revenue dismissed.
Facts- Subsequent to the survey on the assessee, a Notice u/s. 142(1) of the Income Tax Act, 1961 was issued to the assessee calling for its return of income. In response to this Notice, the assessee filed a return of income, declaring income of Rs.1,35,47,15,708/. In this return of income, the assessee company inter alia declared income on account of sales of land/FSI to five parties which were its associates/sister concerns.
Subsequently, on 1-1-2009 the assessee company filed another return declaring nil income. It claimed that the income declared in the original return in respect of the five transactions of sale of land/FSI to the five parties stands withdrawn due to cancellation of the five Sale Agreements.
An order of assessment has been passed by AO u/s. 143(3) of the I.T. Act. AO taxed the income of sale of land/FSI. The Commissioner dismissed the Appeal by his order dated 31-10-2011. Tribunal partly allowed the appeal. Being aggrieved, revenue has preferred the present writ.
