{"id":52708,"date":"2025-04-07T10:23:39","date_gmt":"2025-04-07T04:53:39","guid":{"rendered":"https:\/\/itatonline.org\/digest\/modi-rubber-ltd-v-dcit-2024-228-ttj-848-236-dtr-145-38-nypttj-212-delhitrib-2\/"},"modified":"2025-04-07T10:23:39","modified_gmt":"2025-04-07T04:53:39","slug":"modi-rubber-ltd-v-dcit-2024-228-ttj-848-236-dtr-145-38-nypttj-212-delhitrib-2","status":"publish","type":"post","link":"https:\/\/itatonline.org\/digest\/modi-rubber-ltd-v-dcit-2024-228-ttj-848-236-dtr-145-38-nypttj-212-delhitrib-2\/","title":{"rendered":"Modi Rubber Ltd. v. DCIT (2024) 228 TTJ 848 \/ 236 DTR 145 \/ 38 NYPTTJ 212 (Delhi)(Trib)"},"content":{"rendered":"<p>The aassessee sold its share holdings in the wholly owned\u00a0 subsidiary. As per purchase agreement certain amount to be kept in\u00a0 escrow account as deposits. The amount to be released after 2<sup>nd<\/sup> year,\u00a0 4<sup>th<\/sup> year\u00a0 and 8<sup>th<\/sup> year on certain agreed terms after adjusting of claim arising of potential liabilities in a manner prescribed therein.\u00a0 The AO made addition on the basis of consideration specified in the agreement and has\u00a0 considered the amount kept in escrow account\u00a0 also as accrued to the assessee. CIT(A) affirmed the order of the AO. On appeal the Tribunal held that\u00a0\u00a0\u00a0 funds have not been released to the assessee till date, therefore, the amount kept in escrow deposits cannot be regarded as sale consideration accrued to the assessee with reference to S 48 for the purposes of quantification of capital gains chargeable under s. 45. Amount recovered out of escrow account by the assessee in the later years shall be liable to taxation in the respective years of receipt or accrual. Dinesh Vazirani v. P CIT (2022) 445 ITR 110 (Bom) followed; Caborandum Universal Ltd. v. Asstt. CIT (2021) 283 Taxman 312 (Mad) (HC),\u00a0 distinguished. (AY. 2012-13)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>S. 45 : Capital gains-Full value of consideration-Amount kept in escrow account-Share purchase agreement-The unreleased amount kept is  escrow account as deposits cannot be assessed as sale consideration-Amount can be taxed  in later years in respective years of  receipt or accrual.[S. 4,5, 48]   <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-52708","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-dI8","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/52708","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=52708"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/52708\/revisions"}],"predecessor-version":[{"id":52709,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/52708\/revisions\/52709"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=52708"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=52708"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=52708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}