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TMI Blog2015 (8) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.04.2008. Therefore, the lower authorities are not correct in estimating the value of the land on the basis of the materials relating to M/s Coromandel Cables Pvt. Ltd. this Tribunal is of the considered opinion that in the absence of any other material, the lower authorities have no other way except to accept the value of the land at ₹ 10.50 Crores as disclosed in the sale agreement dated 1.04.2008. Accordingly the orders of the lower authorities are set aside and the appeals of the assessee are allowed. Sharing ratio of the developed project - CIT(Appeals) reduced it to 40% as against 45% determined by the Assessing Officer - Held that:- By efflux of time, the cost of construction or cost of land might have increased. However, the percentage of the share would not increase. If the assessee entered into an agreement for sharing the constructed area at 37.5% in the year 2005, the same sharing ratio would continue in 2008 also. By efflux of time, the cost may increase, accordingly the price may also increase, it does not mean that the share in constructed area would also increase due to efflux of time. This Tribunal is of the considered opinion that the CIT(Appeals) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose of computation of capital gains. The Ld. representative submitted that the assessee has also raised an issue of reopening of the assessment under Section 147 of the Act. Referring to the reopening of the assessment, the Ld. representative submitted that the Assessing Officer based upon an errorneous information in respect of period of holding of the property, determined the short term capital loss instead of long term capital loss on mutual funds. In fact, according to the Ld. representative, the assessment was reopened only for the purpose of assessing the capital loss on mutual funds by issuing notice under Section 148 of the Act. During the course of assessment proceedings, no income was found to have escaped in respect of capital loss on mutual funds. However, the Assessing Officer made addition in respect of capital gain on sale of land on assumption and presumption. On placing reliance on the judgment of Bombay High Court in CIT v. Jet Airways (I) Ltd. (2011) 331 ITR 236, the Ld. representative submitted that an Assessing Officer has not made any addition on the reasons for which the assessment was reopened under Section 148 of the Act, therefore, he cannot make any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actory and land at Perungudi. The assessee-company entered into an agreement with M/s Doshi Housing to develop a residential project, namely, Etopia-II . In fact, the land belonging to the assessee is situated adjacent to the land owned by M/s Coromandel Cables Pvt. Ltd. According to the Ld. representative, the transaction between the assessee and the developers are so arranged that the higher sale consideration for the purpose of computing the capital gain in the hands of the assessee was suppressed by diverting the majority portion of the profits to the developer of the property so as to claim benefit under Section 80-IB(10) of the Act. The Ld. D.R. further submitted that the partnership firm was reconstituted on 1.4.2007 in which one Shri M.G. Surendranath was introduced as partner with a share profit at 35%. However, he was not given any share of loss. According to the Ld. D.R., all the three entities, namely, M/s Coromandel Cables Pvt. Ltd., M/s Coromandel Oils Pvt. Ltd. (the present assessee) and M/s Doshi Housing Pvt. Ltd. are all belonging to one group, namely, Doshi Group in which Shri Harshad V. Doshi was at the helm of affairs having absolute control in all the spheres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee is adjacent to the land belonging to M/s Coromandel Cables Pvt. Ltd., the Assessing Officer adopted the same value as that of M/s Coromandel Cables Pvt. Ltd. on estimation. According to the Ld. D.R., there is no other material is available on record. 7. We have considered the rival submissions on either side and perused the relevant material on record. The only issue arises for consideration is with regard to determination of the value of the land for the purpose of computation of capital gains in the hands of the assessee. Admittedly, the assessee-company entered into an agreement with M/s Doshi Housing for sale of its land at Perungudi. A survey was conducted in the premises of the assessee as well as in the case of M/s Coromandel Cables Pvt. Ltd. on 24.01.2012. Admittedly, no material was found in the premises of the assessee. In the case of M/s Coromandel Cables Pvt. Ltd., several incriminating materials were found, including joint development agreement, indicating the percentage of the developed area to be allotted to M/s Coromandel Cables Pvt. Ltd. On the basis of the incriminating materials, it appears from the assessment order that the Assessing Officer c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atever may be the reasons when two parties came into an agreement to transfer the landed property, the judicial authorities cannot step into the shoes of the parties and say that the property may be worth more than what was agreed between the parties. In fact, in order to avoid this settled position, Parliament has introduced Section 50C of the I.T. Act with effect from 1.4.2003 by Finance Act, 2002. Therefore, when the assessee claims that the value of the land is less than the value determined by the stamp authorities for payment of stamp duty, the value adopted by the stamp authorities shall be deemed to be the full value of the consideration received or accrued to the assessee as a result of such transfer. 10. We have also carefully gone through the sale agreement entered between the assessee and M/s Doshi Housing, a copy of which is available in page 11 of the paper-book. The agreement clearly says that the assessee agreed to transfer the land to the extent of 1,06,196 sq.ft. for a total consideration of ₹ 10.50 Crores and agreed to execute the sale deed in favour of M/s Doshi Housing or its nominee. In fact, the assessee has executed several sale deeds in favour of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008. Therefore, due to efflux of time, the developed area in the year 2008 in comparison to 2005 would be naturally more, therefore, the CIT(Appeals) ought to have confirmed the addition made by the Assessing Officer. 12. We have heard Shri B. Ramakrishnan, the Ld. representative for the assessee also. By efflux of time, the cost of construction or cost of land might have increased. However, the percentage of the share would not increase. If the assessee entered into an agreement for sharing the constructed area at 37.5% in the year 2005, the same sharing ratio would continue in 2008 also. By efflux of time, the cost may increase, accordingly the price may also increase, it does not mean that the share in constructed area would also increase due to efflux of time. This Tribunal is of the considered opinion that the CIT(Appeals) has rightly reduced the sharing ratio to 40% as against the ratio determined by the Assessing Officer at 45%. Therefore, this Tribunal do not have any reason to interfere with the order of the CIT(Appeals) and accordingly, the same is confirmed. 13. In the result, these appeals of the Revenue are dismissed. 14. Now coming to the Revenue's appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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