Income Tax Act, 1961

--Appeal [High Court]--Substantial question of law Nature of registration and electrification charges--Another question related to the addition of Rs.3,82,94,536 being stamp duty and electrification charges recoverable by assessee. Assessing officer stated that the seized documents revealed that assessee was charging registration charges @ 7% and was showing the same as loans and advances recoverable from the customers. According to him this was a wrong method of accounting. A similar procedure was found to have been adopted by assessee in respect of electrification charges which were charged @ 15% and shown to be recoverable as loans and advances. According to assessing officer these were not items of revenue expenditure since they related to the flats/space and formed part of the cost thereof and therefore they were not adjustable against the revenue of the assessee. According to assessing officer these items of expenditure could be capitalized and added as part of the work- in- progress. On these facts he called upon assessee to explain why the registration and electrification charges collected from customers cannot be added as revenue receipts. Assessee submitted that according to the system of accounting followed, the registration and electrification charges were not included either in the cost of land or in the work- in- progress or as cost of the project and they were rightly shown to be recoverable from the buyers. It was also explained that in case there was any surplus of the registration and electrification charges collected from the customers over the amounts paid to the State Government, the surplus would be shown as income in the year of receipt. assessing officer rejected the explanation on the ground that revenue receipts and capital expenditure cannot be adjusted against each other. He, therefore, added the amount of Rs. 3,82,94,536 as assessee's income. The Commissioner (Appeals) deleted the addition of Rs.3,82,94,536. The Tribunal agreed with the Commissioner (Appeals) that the amount cannot be added. Held: The decision of the Tribunal is based on factual findings recorded by the Commissioner (Appeals) with which it agreed. No material was brought before the Tribunal or before this court to disturb the factual findings recorded by the aforesaid authorities. The decision of the Tribunal is not therefore open to the challenge as being perverse. Further since the Tribunal's decision was based on findings of fact recorded on the basis of the entries made in the books of accounts, no question of law can be said to have arisen from the order of the Tribunal on this point.