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TMI Blog2015 (5) TMI 762X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 72,00,000/- was received by M/s.Tirupati Corporation, and they have duly shown the same as their income in their return of income. No material has been brought on record by the Revenue to show that any part of the said consideration of ₹ 46,08,000/- and ₹ 72,00,000/- was actually received by the assessee or the assessee was the owner of the complex, in respect of which FSI was sold. The sale consideration of ₹ 45,64,000/- which was shown by the assessee in its return of income was in respect of sale of land and had nothing to do with the sale of FSI of ₹ 46,08,000/- and ₹ 72,00,000/-. Thus, the AO clearly erred in adjusting the sale consideration of ₹ 45,64,000/- with the sale consideration of ₹ 46,08,000/- and ₹ 72,00,000/-. Thus no error in the findings of the CIT(A), which is confirmed. - Decided against revenue. - ITA No. 1379/Ahd/2011 With CO No. 116/Ahd/2011 - - - Dated:- 29-4-2015 - Shri N. S. Saini And Shri Kul Bharat,JJ. For the Petitioner : Shri M.K. Singh, Sr. D.R. For the Respondent : Shri S.N. Soparkar Shri P.M. Mehta, A.Rs. ORDER Per Shri N. S. Saini, Accountant Member: This is an appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, 3 5 from Hindustan Earth Movers Pvt. Ltd. but it expressed its inability to pay the sale consideration and thereafter as per revised MOU Hindustan Earth Movers Pvt. Ltd. was supposed to sell plot nos. 1, 2 5 and sale proceeds were to be distributed in the ratio of 2/3rd to Aditi Construction and 1/3rd to Hindustan Earth Movers Pvt. Ltd. The A.O. added the sale deeds referred to survey No.33/p and not 33 34 and there is no reference of plot no.33 in the sale deed and that in the sale deed there is no mention of apportionment of receipts. 7. In response to the remand report, it was submitted that the development right for plot nos.1 5 were sold to Tirupati Corporation for ₹ 1.60 crores and in view of the Court s decision, the share of Hindustan Earth Movers Pvt. Ltd. was ₹ 45,64,000/- which was reflected in its books. It was submitted that in para No.3 of the development agreement between Tirupati Corporation and Hindustan Earth Movers Pvt. Ltd. it was stated as under :- Whereas by virtue of this Development Agreement, the party of the first part hereby giving the authority to the party of the second part to move the Sign Board over this land and they a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... velopment right and M/s Aditi Construction received ₹ 11436000/- and the receipts were offered for taxation in the return for AY 07-08. It is a fact that as per para 3 of the development agreement dt. 18.07.05, HEMPL has transferred the developmental right as well s the FSI for total price of ₹ 1.6 crores. 4.3.1 By sale-deed dt. 16.5.06, HEMPL (mentioned as seller) and Shri Tirupati Corporation (Mentioned as party of the second part and developer and confirming party) sold FSI rights in respect of office no.105-106, 205-206, 305-306 405-406 to Tirupati Prime Estate P. Ltd. For ₹ 4608000/- and at page no.14 of the said agreement the purchaser has paid to the seller ₹ 46,08,000/- vide cheques No.99484 dt. 9.5.06 drawn on Canara Bank, Alkapuri for purchase of FSI and the seller also acknowledged the receipts as per page-15 of the agreement. Similarly vide sale-deed dt. 16.5.06, HEMPL (mentioned as seller) and Shri Tirupati Corporation (mentioned as party of the second part and developer and confirming party) sold FSI rights of showroom on first floor for ₹ 72 lakhs for showroom No.101-104. The AO after perusal of return noticed receipts of only ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er was permitted to develop a complex on the said property and that the appellant had lien on the said land for period till it receives ₹ 1.6 crores. The agreement also mentions that M/s Tirupati Corporation is allowed to collect money towards cost of land and FSI. Further in development agreement, para 3 it is mentioned that the appellant had agreed and bound himself to any sale-deed or tripartite agreement in regard to ownership of flat/shops subject to fulfillment of land payments. (ii) There is no denial that M/s Tirupati Corporation has received ₹ 4608000/- vide cheque no.99484 dt. 9.5.06 and further ₹ 72 lakhs vide cheque no.992482 dt. 9.5.06 through two sale of FSI agreements and these have also been offered for tax. (iii) The contentions of the appellant that its name as seller in the FSI agreements was only with the purpose that it was the owner of land in Municipal records and also because complete payment of land was not received from M/s Tirupati Corporation, appear to be correct. (iv) If the contention of the appellant is not accepted then there would be no need for Tirupati Corporation to pay ₹ 1.6 crores for land by way of development ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 4548.3 sq. meter in R.S. No.33 Plot No.1 5 at village: Akota, Akota Mujmahuda Road has been sold by HEMPL to M/s Tirupati Corporation for ₹ 1,60,00,000/- and that the seller was to receive ₹ 32 lakhs during March 05 to June 05 and the balance ₹ 1,28,00,000/- was to be recovered from customers towards units booked by them and that HEMPL will have full lien over the construction carried out by M/s Tirupati Corporation till the above payment is completed. Further as per out of court settlement dt. 17.10.06 M/s Aditi Construction is to receive 2/3rd and HEMPL 1/3rd of the payments for sale of plot no.1 and 5. HEMPL received ₹ 4564000/- for sale of development right and M/s Aditi Construction received ₹ 11436000/- and the receipts were offered for taxation in the return for AY 07-08. It is a fact that as per para 3 of the development agreement dt. 18.07.05, HEMPL has transferred the developmental right as well s the FSI for total price of ₹ 1.6 crores. 4.3.1 By sale-deed dt. 16.5.06, HEMPL (mentioned as seller) and Shri Tirupati Corporation (Mentioned as party of the second part and developer and confirming party) sold FSI rights in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1.6 crores was not received, Tirupati Corporation cannot be shown as seller in the agreement for sale of FSI and in any case the land was in the name of the appellant. It is argued that Tirupati Corporation is the transferor of FSI and that no amount has been received by the appellant on sale of FSI. It is also informed that similar development agreements and sale of FSI agreements are executed by builders/developers in Baroda and that this fact could be got verified. 4.6 From above undisputed facts/conclusions emerge: (i) That by virtue of development agreement the appellant had handed over the possession of plot No.1 5 to M/s Tirupati Corporation and the latter was permitted to develop a complex on the said property and that the appellant had lien on the said land for period till it receives ₹ 1.6 crores. The agreement also mentions that M/s Tirupati Corporation is allowed to collect money towards cost of land and FSI. Further in development agreement, para 3 it is mentioned that the appellant had agreed and bound himself to any sale-deed or tripartite agreement in regard to ownership of flat/shops subject to fulfillment of land payments. (ii) There is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo sale deeds in question sold the FSI for ₹ 46,08,000/- and ₹ 72,00,000/-. Name of the assessee appeared on those sale deeds as a vendor along with the name of M/s.Tirupati Corporation as confirming party, because, the title over the said land was not yet recorded in the government records in the name of M/s.Tirupati Corporation. The entire consideration of ₹ 46,08,000/- and ₹ 72,00,000/- was received by M/s.Tirupati Corporation, and they have duly shown the same as their income in their return of income. No material has been brought on record by the Revenue to show that any part of the said consideration of ₹ 46,08,000/- and ₹ 72,00,000/- was actually received by the assessee or the assessee was the owner of the complex, in respect of which FSI was sold. The sale consideration of ₹ 45,64,000/- which was shown by the assessee in its return of income was in respect of sale of land and had nothing to do with the sale of FSI of ₹ 46,08,000/- and ₹ 72,00,000/-. Thus, the AO clearly erred in adjusting the sale consideration of ₹ 45,64,000/- with the sale consideration of ₹ 46,08,000/- and ₹ 72,00,000/-. 15. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of ₹ 31,00,000/- by journal entry in its books of account to HEMPL, the assessee company and the details are given at page nos.57 and 58 of the paper book. It is further submitted that the assessee company has credited total amount of ₹ 1,33,00,000/- in its books of account and transferred to Profit Loss A/c. as sale of plot no.3, as given in page no.53 of the paper book. Accordingly, the assessee-company has offered to tax ₹ 1,33,00,000/- in its return of income. The CIT(A) vide order no.CAB(A)-V/117/09-10 dt.27/1/201 for A.Y.2007-08 in the case of M/s.Aditi Construction confirmed the addition of ₹ 31,00,000/- directing the assessee to approach before the AO in the case of HEMPL and the AO shall after verification reduce the assessed income of ₹ 31,00,000/- in the case of HEMPL if it is found taxed twice. The AR of the assessee submitted that against confirmed addition of ₹ 31,00,000/- the appeal before the Tribunal has been filed in ITA No.688/Ahd/2011 in the case of M/s.Aditi Construction, and the Tribunal decided the issue in favour of the assessee by allowing the appeal vide its order dated 11.7.2014, and accordingly, the matter has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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