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TMI Blog2014 (3) TMI 1018X X X X Extracts X X X X X X X X Extracts X X X X ..... n the sanctioned plan and the approvals are obtained, that the developer can commence the development on the scheduled property. Moreover, this is on record by way of the assessee’s profit and loss account and balance sheet as on 31.3.2007 and for the three subsequent years, that no development work was undertaken in the said years. The necessary approvals/licence for development have also not been shown to have been granted either to the assessee or the developer during the year. Sans these approvals/licence obviously, no development could have been carried out . Without these approvals/licence , it cannot be said that any development rights came into existence at all. The contingent right under the Agreement has not been established to have been fructified into a vested right. Apropos the interest free performance deposit, this has not been shown to be representing part of sale consideration for the development rights. It cannot do so, since, as observed, no such development rights came into existence during the year. All the above facts have correctly been taken into consideration in the right perspective by the ld. CIT(A) while deciding the issue in favour of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Developer, from the effective date, an exclusive license to enter upon the scheduled property and develop the same in terms of the agreement. It shall irrevocably and exclusively permit the Developer to enter upon the property for construction and development of buildings, without any hindrance by EEDPL. Effective date: Defined in Article 1.1 as date of completion of purchase of property including mutation in the name of assessee in revenue records, which shall be communicated in writing by EEDPL to developer. 4. The Developer shall be responsible for obtaining all approvals including license from Director, Town Country Planning, Chandigar (DTCP) for township development and upon obtaining these approvals, the developer shall commence development construction of the buildings. The approvals shall be obtained within 2 years extendable by further one year. 5. In the event of failure on the part of developer to obtain the township license, the developer shall have the right, but not the obligation, to purchase the scheduled property at the price of ₹ 2.10 crores per acre within 60 days of its intimation to EEDPI, about non receipt of the license, in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2. On the facts and in the circumstances of the case, the learned CIT(A) has erred in deleting addition of ₹ 34,29,49,000/- made on account of accrued income on grant of development rights ignoring that - a) the said addition of ₹ 34.29 crores was strictly made in accordance with the development agreement dated 05.12.2006 entered with M/s DLF Commercial Projects Corporation (Developer). The said agreement (Article 2.1) provides for grant of an exclusive license to the developer from the date of purchase of the land by the assessee article 5.1 provides that in consideration of the assessee transferring the exclusive development rights over the property the developer shall pay to the assessee the consideration within two years from the effective date sum ofRs. 2.10 crore per acre. b) the AO has pointed out in clear cut terms that the impugned agreement is skewed heavily in favour of the developer as it has unlimited rights under the agreement - to enter upon the property, to build and construct option to purchase the property upon its failure to obtain license from the authorities without any opposition from EEDPL, right to enter into agreement with p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n law in upholding the action of the Assessing Officer in making disallowance u/s 40(a)(ia) of the Income Tax Act, 1961 amounting to ₹ 3,91,96,453/- (correct amount is ₹ 73,59,471/-) paid by the assessee to the consolidator for transfer of rights. 2.1. That on the facts and circumstances of the case, the Ld.CIT(Appeals)-XIII has erred in law in holding that the consolidator was working as an agent of the assessee and hence the assessee ought to have deducted TDS on amount paid to the consolidator u/s 194H of the Act. 3. That the appellant craves leave to add, alter, amend, substitute, withdraw and/or vary any grounds of appeal at or before the time of hearing. 6. The Ld.Counsel for the assessee Shri Pradeep Dinodia submitted that the issue is covered by the decision of the Delhi B Bench of the Tribunal in the assessee s own case for the Assessment Year 2007-08 dt. 5.10.2011. The Ld.CIT, D.R. Mrs.Sudha Kumari on the other hand, though not leaving her ground, agreed that the issue in question is covered in favour of the assessee and against the Revenue. 7. After hearing rival contentions we hold as follows. 8. We first take up revenue s appeal. We f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vour of the assessee. 15. Apropos the case laws relied on by the Department, none of them are applicable to the facts present here. In all those cases, there was actual physical parting of possession in favour of the developer which is not so herein. 16. In view of the above, finding no error whatsoever with the order of the ld. CIT(A), we uphold the same rejecting the grievance sought to be raised by the Department by way of ground of appeal taken. This grievance of the Department, hence, rejected. 9. Respectfully following the Coordinate Bench order, we uphold the order of the Ld.Commissioner of Income Tax (Appeals) and dismiss the appeal of the Revenue. 10. In assessee s appeal the Ld.Commissioner of Income Tax (Appeals) held that the amount paid to M/s Vikram Electrical Equipments P.Ltd. the consolidator appointed to acquire the land holdings is brokerage or commission or fee for professional services and hence subject to deduction of TDS u/s 194 H of the Act. 11. The Tribunal on the very same issue at paras 28 and 29 held as follows. 28. The above clause also makes it evident that unless the assessee decided to procure less than 27 acres of land thro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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