9911796707
TMI Blog2012 (7) TMI 456X X X X Extracts X X X X X X X X Extracts X X X X ..... oor premises of premises of the building known as "Mon Repos" together with on servants' quarters and garage no.2, in the out house situated on Plot no.14A, of Worli Estate. 6.2 The assessee, vide agreement dated 21.3.2000, paid compensation of Rs. 50,00,000 to the tenants named herein, in pursuance of the surrender of tenancy and handing over vacant and peaceful possession of the South Wing of the ground floor premises of the building known as "Mon Repos" together with on servants' quarters and garage no.2, in the out house situated on Plot no.14A, of Worli Estate. The payment of Rs. 50,00,000 was made by three bankers chqeues all dated 21.3.2000. 6.3 The assessee has claimed the cost of Rs. 50,00,000 borne in vacating these tenants in the return of income filed for Asstt. Year 2000-01. Thus, the opening value of project as on 1.4.2004, includes the cost paid to the said tenants. 6.4 M/s. Akta Real Estate Private Limited purchased the balance 3/4th undivided share in land and premises situated on Plot no.14A, of the Worli Estate on 8.8.2000. 6.5 The assessee was in possession of vacant and un-encumbered one fourth undivided share in land and premises situated on Plot no.14A, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts 8141.08 Nil 8141.08 Seleable Area 22979.79 7780.21 30760.11 Area apportioned by developers in the ratio 80:20 24608 6152.00 30760 Short fall in area (-) 1628.21 1628.21 0 9. The assessee received sale consideration of Rs. 9 crores for 6152 sq.ft. which works out to Rs. 14629 per sq.ft. Applying this rate to 1628.21 sq.ft. which was allegedly used for accommodating tenants, the assessee had made under recovery of sale proceeds to the extent of Rs. 2,38,16,545 from M/s. Akta Real Estate P. Ltd. Even otherwise, the cost of accommodating tenants is the sole liability of Akta Real Estate P. Ltd. and not that of the assessee. In this context, it is inferred that the area of 1628.21 sq.ft. has been sold. Hence, the under recovery of sale proceeds of Rs. 2,38,16,545 is treated as undisclosed income of the assessee and added to the total income." 3. Accordingly, the addition is made on the ground that there is underrecovery of sale proceeds on an inference that there is a sale. The Assessing Officer further held that the decision of the Tribunal that share of saleable area of 80% and 20% cannot be disturbed is not vacated by this addition as the assessee was appo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee and, therefore, the addition of equivalent amount after conversion into money by the A.O. is confirmed and the ground of appeal is rejected." 5. Aggrieved, the assessee is in appeal before the Tribunal on the following grounds:- "1. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the addition made by the Assessing Officer as undisclosed income of Rs. 2,38,16,545 on account of notional under recovery of sale proceeds without appreciating the facts and circumstances of the case. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in not appreciating the fact that M/s. Akta Real Estate P. Ltd. the Developer, has already paid tax on the income added in the hands of the appellant and thus addition in the hands of appellant is amounting to tax twice the same income. 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the action of the Assessing Officer in wrongly interpreting the clauses of the agreement dated 08.08.2000 and accordingly calculating the salable area without appreciating the facts and circumstances of the case." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration of the Tribunal when the Assessing Officer as well as the Commissioner (Appeals) have examined the documents and have come to a conclusion that there is an obligation on the part of AREPL to provide accommodation to tenants and the only issue was whether the assessee was entitled to bear the expenditure of such allocation of area to tenants. He submitted that all these papers were filed by the assessee in the case of AREPL and after examining these papers, the Assessing Officer, in that case, came to a conclusion that there is an obligation on AREPL to provide accommodation to the tenants. Thus, he argued that the conclusions drawn by the Assessing Officer in the case of AREPL on the same set of documents cannot be disputed by the learned departmental representative before the Tribunal. On the argument of the learned Departmental Representative that the assessee suppressed these materials and has not filed the same before the Assessing Officer, the learned Counsel relied on the provisions of section 143(2) of the Act and submitted that the assessee is required to produce only such evidence and documents that are required by the Assessing Officer. He submitted that the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee accounted for this recovery in its books and the Assessing Officer accepted the same. He pointed out that the sister concern has offered the consideration on the sale of the balance area as its income and he filed certificates to that extent. He vehemently contended that the income in question has been accounted for either in the hands of the assessee or in the hands of sister concern and, hence, there is no escapement of income and if the Assessing Officer's order is upheld, it would be a case of double taxation. 10. He further submitted that the income is sought to be brought to tax on notional basis. As per the learned Counsel, there is neither sale nor receipt of income. As the assessee does not possess any asset, no tax can be levied. He relied on the decision of Chennai Bench of the Tribunal in CIT, v/s J. Chelladurai, 204 Taxman 258 (Che.). 11. On the issue that the Assessing Officer cannot step into the shoes of the assessee and determine as to what should be the share of revenue of each of the parties in a particular arrangement, the learned Counsel relied on the following case laws:- Sinha (D.N.) Pvt. Ltd. v/s CIT (Cal), [1976] 102 ITR 0491; CIT v/s Walchand and Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side. He submitted that re-opening, if any, would be a change in opinion and, hence, bad in law. 15. Rival contentions heard. On a careful consideration of the facts and circumstances of the case and on a perusal of the papers on record, as well as the case laws cited before us, we hold as follows:- 16. The Tribunal, while upholding the order dated 24th August 2011, passed under section 263, vide Para-9, has brought out the issue in the following words:- "The question whether the assessee was entitled to a higher revenue in terms of the agreement with Akta as also the question whether the assessee could reduce the salable area by the area occupied by the old tenants were not specifically examined by the Assessing Officer. 17. In our opinion, when the issue has been set aside by the Commissioner in its proceedings under section 263, to the file of the Assessing Officer for examination of a particular issue, the scope of the Assessing Officer is restricted to these directions only. It cannot be a case of denovo assessment. 18. Now coming to the findings of the Assessing Officer on the issue, we find that the Assessing Officer has never doubted the claim of the assessee that AREP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter and how the Assessing Officer can now change his opinion. The plea that in the case of AREPL, the assessments were re- opened, also does not help the Revenue as it might be a matter of change of opinion. At best, it may be an issue for invoking power under section 263. The argument that the assessee has suppressed these papers, is also without force for the reason that there is no evidence on record that the Assessing Officer had asked for these records. Under section 143(3), the assessee is bound to produce evidences as the Assessing Officer may require on specific points. When the Assessing Officer did not call for the information, it would be unrealistic to expect the assessee to produce all sundry evidences; (ii) Coming to the issue as to whether the learned Departmental Representative can seek fresh probe on the issue in the case of Siya Lifestyle Ltd., ITA no.4465/Mum./2010 & Ors., order dated 25th November 2011, vide Paras-14 to 21, the Tribunal held as follows:- "14. Learned Departmental Representative raises a ground before us that 100% of the purchases should be directed to be disallowed by the Assessing Officer. In our opinion, such a ground cannot be taken by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so far as legal developments in that regard are concerned.-It is not the scheme of the Act that entire assessment is open before the Tribunal and it must consider the same. Ground which was raised by the Revenue was confined to profits relatable to commercial units and therefore, it is not really open to the Tribunal to go beyond the said ground.-Jeypore Timber & Veneer Mills (P) Ltd. vs. CIT (1982) 137 ITR 415 (Gau.) applied; CIT vs. Assam Travels Shipping Service (1993) 199 ITR I (SC) and Jt. CIT vs. Sakura Bank Ltd. (2006) 99 TTJ (Mumbal) 689: (2006) 100 lTD 215 (Mumbai) distinguished; Mcorp Global (P) Ltd. vs. CIT (2009) 222 cm (SC) 110: (2009)19 DTR (SC) 153 : (2009) 309 ITR 434 (SC) followed." 16 Mumbai Special Bench of the Tribunal in Mahindra & Mahindra Ltd. v/s DCIT, (2009) 313 ITR (AT) 263 (SB), held as follows:- "In our considered opinion the learned Departmental Representative has no jurisdiction to go beyond the order passed by the Assessing Officer. He cannot raise any point different from that considered by the Assessing Officer or the Commissioner of Income-tax (Appeals). His scope of arguments is confined to supporting or defending the impugned order. He cannot s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer and to enhance the disallowance to 100%. We consider only the grounds of appeal that are filed in the appeals filed by the assessee as well as the Revenue." 19. UOP LLC v/s ADIT, [2007] 108 ITD 186 (Del.), the Tribunal has held that in an appeal filed by the assessee, additional evidence can be admitted at the instance of the Revenue on application of Rule-29 of the ITAT rules, where the evidence was quite relevant for the just decision of the case and which came to be processed by the Revenue after filing appeal by the assessee. In the case on hand, on the facts, we are of the considered opinion that the Tribunal has power to admit additional evidence from the Revenue. This is not a case for admission of additional evidence. 20. Following the aforesaid decision of the Tribunal and in view of all the reasons cited above, we reject the plea of the learned Departmental Representative for admission of additional evidence and for ordering fresh investigation. 21. We now consider the merits of the case. In the first round of appellate proceedings, the Tribunal in ITA no.7359/Mum./2008, order dated 22nd January 2010, in assessee's own case for the very same asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are profit shared by assessee @ 20% was reasonable as the same was commercially viable and a decision of a prudent businessman. It is a well settled position that businessmen know how to run the business activity. Accordingly, the addition made of Rs. 1,44,98,140, which was sustained by the CIT(A) on protective basis is deleted and Assessing Officer is directed to accept the profit shown by assessee." 22. Once the agreement is not doubted and the income has been disclosed in the hands of one of the co-developers, it would be not correct for the Revenue to step in and decide what should be the share of each party. The understanding of the parties has to be the basis unless something contrary is found. 23. In the case on hand, the assessee has filed a confirmation letter from Akta Real Estate that the area of 1628.21 sq.ft. was accounted by it and the net income was offered to taxation in its hand for assessment years 2004- 05, 2005-06 and 2006-07. When the income on this area has been offered to tax by the sister concern, we are of the opinion that it is not proper for the Assessing Officer to sit in the judgment as to which firm is entitled to the revenue on this area of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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