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7. Before us, Ld. Counsel for the assessee submitted that Airport Authority of India had entered into a Public Private Partnership joint venture with Mumbai International Airport Pvt, Ltd. (hereinafter in short "MAIL") for expansion, development, improvement, and renovation of International Airport at Mumbai. As a result, AAI and MIAL entered into Operation Management and Development Agreement (OMDA) agreement dated 4.4.2006. Ld. Counsel for the assessee further submitted that Project required clearing 276 acres of land encroached by slums. MIAL entrusted said responsibility upon Assessee. Accordingly, Slum Rehabilitation Agreement (hereinafter in short "SRA") between Mumbai International Airport Ltd and HDIL dated 15th October 2007 was entered into. As per this agreement assessee has to rehabilitate the Slums and accordingly it was to get 65 acres of Airport land to develop ITA.No. 5986/MUM/2017 (A.Y: 2013-14) M/s. Housing Development and Infrastructure Limited non-aeronautical services as part of development of Airport project. Pursuant to slum rehabilitation agreement Assessee purchased land of Rs. 1900 Crore known as Kurla Premier and conveyed the same to SRA authority as per SRA Scheme. SRA granted land TDR against surrender of land which was sold by assessee in open market.
ITA.No. 5986/MUM/2017 (A.Y: 2013-14) M/s. Housing Development and Infrastructure Limited (Reply to Point no. 24 of notice u/s 142(1) of Income tax act, 1961 dated 11.09.2015)."
17. We also observe that the assessee has furnished the breakup of the revised cost of TDR which was arrived at as under: -
Housing Development & Infrastructure A.Y. 2013-14 F.Y. 2012-13 Amount Summary (Actual) Kurla Premier --
10. The Parties shall respectively bear their own costs in respect of the proceedings before the Arbitral Tribunal."
34. As could be seen from the above clauses through the Settlement Agreement both the parties have agreed that there shall not be any ITA.No. 5986/MUM/2017 (A.Y: 2013-14) M/s. Housing Development and Infrastructure Limited counter claims in respect of the contract entered into by both the parties in terms of the Slum Rehabilitation Agreement dated 15.10.2007 and the contract is terminated with effect from 06.02.2013. Therefore, we find that, though the assessee seems to have initially disputed the termination of contract but ultimately the parties mutually agreed to end the dispute from the date of termination of the letter issued by MIAL and it was also agreed that there shall not be any counter claims. In the circumstances, a question arises whether there is any real dispute between the parties, when both the parties are agreeing for the termination from the date of letter issued by MIAL dated 06.02.2013 without any claims and counter claims. But Lower Authorities have rejected the claim of the assessee on the ground that the liability is only a contingent liability and the liability did not crystalize during the Assessment Year under consideration. Lower Authorities have held that in the case of contractual liability, the liability crystalizes in the year of settlement of dispute between the parties. The above conclusion was drawn based only on the Arbitral Award which was passed on 19.09.2016 without going into the clauses of Award, Settlement Agreement and the termination letter. The question as to whether the liability crystalized, when the termination letter issued on 06.02.2013 in view of the Settlement Agreement and Arbitral award was never examined by Lower Authorities. Lower Authorities have not examined the clauses ITA.No. 5986/MUM/2017 (A.Y: 2013-14) M/s. Housing Development and Infrastructure Limited of the Settlement Agreement and Award to find out when the liability crystallized i.e., on 06.02.2013 when the termination letter was given or on 19.09.2016 when final Award was passed by the Arbitral Tribunal. In the circumstances, we are of the considered view that the Lower Authorities have to examine all the clauses of the settlement agreement vis-à-vis Arbitral Award and the termination letter before concluding that the liability did not crystallized during this Assessment Year.
8.3.5 On application of the aforementioned legal principles to the facts of this case, I am in agreement with the A.O's finding supported by detailed reasoning that the aforesaid Interest income earned by the appellant was rightly chargeable to tax under the head 'income from other sources' rather than 'business Income' as claimed by the appellant. In the first place, it deserves to be noted that the appellant is engaged In the business of real estate and infrastructure development rather than the business of financing or money-lending. Merely making mention of an Incidental or ancillary object (clause 10) of its MoA will not by itself lead to the inference that he appellant was engaged in the business of financing or money lending. It is a matter of record that the appellant has not obtained any licence Of permission from the Reserve Bank of India For carrying; on the business of financing: The appellant has not placed on record any resolution of the Board of for carrying on the business of money-lending. The appellant has failed to any material on record to show that it was carrying on the business of financing or money-lending in a systematic and organized manner. The appellant's reliance in this regard on the incidental/ ancillary object clause 10 on page 3 of the memorandum of association is of no avail. Secondly, the appellant company has also not made it known to outsiders that they are in financing business so as to develop the business. There is nothing on record to show that money had been advanced to any outsider. And finally, it is noticed from, the record that debenture Interest income or Rs.63,57,53.425/- was earned by the appellant from one of its subsidiaries, namely. Guruashish Construction pvt. Ltd, whereas the interest Income of Rs.72,54,23,350 /- was also derived from the loans given by the appellant to its six subsidiary companies. The appellant is thus seen to have lent money to its subsidiary companies and derived interest therefrom. The afore mentioned activities of the appellant company Can by no stretch of imagination be said to constitute 'business. As a matter of fact, it is found that the appellant has not done any activity which could be termed as an activity Of business. There Is not even an iota of evidence to demonstrate that the appellant had carried on any financing or money-lending business. 1 am, therefore, of the considered view that the A.O. was Justified in holding that the appellant was not engaged in the business of financing and that the interest Income from NCD as well the interest from subsidiary companies derived by the appellant was appropriately assessable under the head 'Income from other sources'. The action of the A.O, in bringing to tax the aforesaid Items of interest income under this head 'Income from other ITA.No. 5986/MUM/2017 (A.Y: 2013-14) M/s. Housing Development and Infrastructure Limited sources' Is found to be In accordance with law as well as peculiar facts and circumstances of the case and is, therefore, upheld. Ground No,8 of the present appeal is Thus found to be devoid of merit and is accordingly dismissed.