9911796707
TMI Blog2015 (5) TMI 762X X X X Extracts X X X X X X X X Extracts X X X X ..... nd as per sale deed at page no.14, the purchaser had paid consideration of Rs. 46,08,000/- by cheque No.999484 dated 09.05.2006 and Rs. 72,00,000/- by cheque No.992482 dated 09.05.2006 towards purchase of FSI. The assessee has disclosed only Rs. 45,64,000/-. Therefore, the difference of Rs. 72,44,000/- (Rs.72,00,000 + 46,08,000 - Rs. 45,64,000) was added by the A.O. 4. On appeal before the CIT(A), the assessee submitted that another group concern M/s. Aditi Construction had received Rs. 1,60,00,000/- from M/s. Shree Tirupati Corporation for sale of land as per decree of Court as under :- Name Amount (Rs.) Remarks HEMPL 4564000 Offered to tax in the case of HEMPL M/s Aditi Construction 11436000 Offered to tax in the case of Aditi Construction. 5. It was further submitted that payments of Rs. 46,08,000/- and Rs. 72,00,000/- by M/s. Trupati Corporation have not been received by the assessee and the assessee has nothing to do with these payments and, therefore, the A.O. has no jurisdiction for making the addition. The assessee also submitted copy of development agreement dated 18.07.2005 of transferring developing rights of plot no. 1 & 5 to Tirupati Corporation and also the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tirupati Prime Estate in the books of Tirupati Corporation. It was, therefore, pleaded that the addition should be deleted. 9. The CIT(A), after considering the submissions, held as under :- "4.3 I have carefully considered the facts of the case, the assessment order, the submissions of the appellant and the remand report. I have also called for the assessment records and examined them. The contentions and the response of the appellant was discussed with the AO who was also present and the submissions of the appellant were verified from the assessment records. From perusal of the sale deeds and other documents, it appears that AO seems to have mixed up the facts in the assessment order. The Development Agreement dt. 18.07.05 between HEMPL & M/s Shree Tirupati Corporation stipulates that land area measuring 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 Rs. 1,60,00,000/- and that the seller was to receive Rs. 32 lakhs during March '05 to June '05 and the balance Rs. 1,28,00,000/- was to be recovered from customers towards units booked by them and that HEMPL will have full lien over the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ti is the confirming party and that as per page 14 of sale deed (concerning FSI relating to office 105, 106, 205, 206, 305, 306, 405, 406) the purchaser has paid Rs. 4608000/- to the seller vide cheque no.99484 dt. 9.5.06 and further vide page no.12 of second FSI deed for space of show rooms (101, 102, 103, 104), the seller is to receive Rs. 72 lakhs vide cheque no.992482 dt. 9.5.06. Both the agreements mention that HEMPL is to receive Rs. 4608000/- and Rs. 72 lakhs for FSI relating to plot no.1&5 and there is no mention of any receipt by M/s. Tirupati Corporation. 4.5 It is vehemently argued before me that the development agreement was between the appellant and Tirupati Corporation to develop a complex and that till complete payment of Rs. 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 fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sentative supported the order of A.O. and Authorised Representative supported the order of the CIT(A). 11. We have heard rival submissions and perused the orders of the lower authorities and materials available on record. In the instant case, the AO enhanced the capital gain shown by the assessee by Rs. 72,44,000/- on the ground that as per two sale deed of sale of FSI dated 16.5.2006, FSI were sold for Rs. 46,08,000/- and Rs. 72,00,000/-, and in the both the sale deeds, the assessee's name appeared as seller. The assessee has shown the sale consideration of Rs. 45,64,000/- only. Therefore, the AO added Rs. 72,44,000/- to the income of the assessee. 12. On appeal, the CIT(A) deleted the above addition by observing as under: "4.3 I have carefully considered the facts of the case, the assessment order, the submissions of the appellant and the remand report. I have also called for the assessment records and examined them. The contentions and the response of the appellant was discussed with the AO who was also present and the submissions of the appellant were verified from the assessment records. From perusal of the sale deeds and other documents, it appears that AO seems to have mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Corporation from M/s Tirupati Prime Estate P. Ltd. The ld. AR also furnished the audit report of the Tirupati Corporation and the ledger account of appellant in its books and also the ledger account of Tirupati Prime Estate to show that the amount was indeed received by M/s Tirupati Corp and that Rs. 1.6 crores paid for developmental rights was also claimed as expenditure by Tirupati Corporation. 4.4 The only fact which arises for consideration is that as per sale of FSI agreement HEMPL is mentioned as the seller and that Shree Tirupati is the confirming party and that as per page 14 of sale deed (concerning FSI relating to office 105, 106, 205, 206, 305, 306, 405, 406) the purchaser has paid Rs. 4608000/- to the seller vide cheque no.99484 dt. 9.5.06 and further vide page no.12 of second FSI deed for space of show rooms (101, 102, 103, 104), the seller is to receive Rs. 72 lakhs vide cheque no.992482 dt. 9.5.06. Both the agreements mention that HEMPL is to receive Rs. 4608000/- and Rs. 72 lakhs for FSI relating to plot no.1&5 and there is no mention of any receipt by M/s. Tirupati Corporation. 4.5 It is vehemently argued before me that the development agreement was between the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e received by the appellant. The complex has been developed by Tirupati Corporation who has incurred the entire cost of construction and has also secured purchasers for flats/shops in the complex. There is no evidence on record that the appellant has become entitled to any further receipts on sale of FSI. 4.7 In view of the foregoing the action of AO in taxing Rs. 72,44,000/- as undisclosed sales in the hands of the appellant is not correct and the addition is thus directed to be deleted. Ground No.1 is allowed." 13. The DR relied on the above order of the AO. 14. We find that no specific defect in the findings of the CIT(A) could be pointed out by the DR. We find that it is not in dispute that the assessee had given a plot of land to M/s.Tirupati Corporation for development. As the entire payment for this transfer was not received by the assessee, the assessee had a lien over the said plot of land and in government records, the name of the assessee continued as registered owner over the said plot of land. M/s.Tirupati Corporation constructed complex which was the property of M/s.Tirupati Corporation. The FSI over the said construction also belonged to M/s.Tirupati Corporation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en offered to tax in the case of Hindustan Earth Movers Pvt. Ltd. (Respondent). Considering the facts of the case the Ld. CIT(A) is not justified in not deciding the 2nd Ground of appeal on merits in the case of Respondent. 2. The respondent crave leave to add, to alter, to amend and/or withdraw the ground of cross objection either before or at the time of appeal hearing." 17. The AR of the assessee submitted that as per deed of compromise approved by the Court, M/s.Aditi Construction has given up the right of plot no.3, and that M/s. Aditi Construction was entitled to receive Rs. 31,00,000/- which has been received from M/s.Shree Tirupati infrastructure. It is submitted that as regards sale price of plot no.3, Shree Tirupati Infrastructure has made the payment as per decree of the Court as under: Payment Made to Amount (Rs.) HEMPL Rs.1,02,00,000/- M/s.Aditi Construction Rs. 31,00,000/- Total Rs.1,33,00,000/- It is submitted that M/s.Aditi Construction has transferred the amount of Rs. 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 asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
