ACIT Vs Dabur Invest Corp (ITAT Delhi)
ITAT Delhi held that option money is to be treated as capital receipt. Accordingly, the same cannot be treated as revenue receipt. The appeal is allowed to that extent.
Facts- The present appeals are filed by the Revenue and Assessee against different orders of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi dated 04.08.2022 for the assessment years 2017-18 & 2018-19. The first common issue in both the Revenue appeals for the assessment years 2017-18 and 2018-19 is relating to taxation of option price received by the assessee as per terms of the joint venture agreement with M/s Commercial Union International Holding Ltd. (CUIH) as capital receipt or revenue receipt.
Conclusion- Held that the assessing officer did not make addition in respect of Rs. 550.82 crores on account of the fact that the same was not debited to the profit and loss account but his observation regarding the nature of expenses is misplaced due to the fact that the issue relating to the option money and capitalization of interest and other expenses in earlier years has attained finality wherein the Tribunal/High Court held that option price is a capital receipt and basically an advance against sale of shares. Hence, in such circumstances the very observation of the Assessing Officer are premature for the assessment year under consideration since the Assessee did not make any claim by debiting to P&L account and therefore these observations are reversed.
