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This is an appeal filed by the Revenue against the order of CIT(A)-
2, Mumbai dated 26/09/2016 for A.Y.2013-14 in the matter of order passed u/s.143(3) of the IT Act.

2. The following grounds of appeal have been taken by the Revenue:-

1. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the Assessing Officer to delete the entire addition of Rs.

11,68,50,670/- made on account of alleged House Property income at accrual basis without appreciating the fact that the possession of the property was given to the lessee, Junobo Hotels Pvt Ltd., in which it started carrying out the structural changes."

I find that approval from MOEF and OC from MCGM have not been received till 31.03.2013. Thus, I find merit in the argument of the assessee that lease agreement has not fructified into "lease". The assessee has clearly provided in clause 5.6. of the Supplementary Lease Agreement, that without obtaining the approval from MOEF and MCGM, the amounts paid by lessee to lessor as compensation / advance / revised advance/ aggregate advance are merely an advance and cannot be treated as compensation for occupying the property for carrying out structural changes.

e) The compensation / advance / revised advance / aggregate advance shall not be treated as payment of the lease rent or amenity charges, (clause 5.4. of Supplementary Lease Agreement)
f) Only upon procurement of approval from MOEF and OC from MCGM the compensation shall be treated and appropriated by the lessor as compensation. (clause 5.6. of Supplementary Lease Agreement). Without obtaining the approval from MOEF and OC from MCGM the amount paid as compensation / advance / revised advance/aggregate advance is merely M/s. Manas Properties Pvt. Ltd., an advance and cannot be treated as compensation for occupying the property for carrying out structural changes (clause 4.6., 5.1. and 5.6. of Supplementary Lcaso Agreement).