MAHAVIR IRRIGATION (P) LTD. Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) ITA No. 252/2005 and CM Nos. 4468/2005 & 8838/2006

(2.) MR . Jayant Bhushan, learned senior advocate for the appellant, has taken us to the Memorandum of Understanding reproduced below :

(3.) THERE is no room for controversy that so far as the present payment is concerned it was a minimum payment in terms of cl. 8. Larger amounts could have been receivable by the assessee had a contract been placed on the DMIL by the Delhi Transport Corporation (DTC). Clause 11 uses the words "for any reason whatsoever" making it amply clear that the payment for Rs. 3 crores would not be as reclaimable by DMIL. Referring to the CIT(A)'s order which holds that the appellant could retain the amount even where it "renders no service whatsoever", Mr. Bhushan contends that it would be inconceivable that the sum of Rs. 3 crores, which is a minimum commission or assured commission, could be retained by the assessee even if he had refused to render any service. We are of the view that this is reading too much into the words used by the authorities below. Reliance has also been placed on CIT vs. A.V.M. Ltd. (1986) 56 CTR (Mad) 171 : (1984) 146 ITR 355 (Mad), which is a decision of the Division Bench of the Madras High Court. The facts there were totally different. The assessee was carrying on business as a distributor of cinematograph films and had taken security deposits from exhibitors which was to be adjusted against receipts by way of ticket sales. This is not the case here. For the same reason the decision in CIT vs. T.V. Sundram Iyengar & Sons Ltd. (1996) 136 CTR (SC) 444 : (1996) 222 ITR 344 (SC) is not of any advantage to the appellant. The question there was at what stage would a deposit of a capital nature become an income in the hands of the assessee. On our reading of the agreement between the appellant and DMIL, the amount of Rs. 3 crores had already accrued to them as income in the year in which it was received by the appellant. No substantial question of law arises. 4438/2005 are vacated.