9911796707
TMI Blog2010 (1) TMI 1222X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The learned CIT (A) further erred in holding that as per the terms of the agreement dated 08.08.2000 between M/s. Akta Real Estates Pvt. Ltd. and the appellant company, transfer of property under consideration has taken place u/s.2(47) of the I.T. Act on 08.08.2000 relevant to Assessment Year 2001-02 and, therefore, taxability of the income should be considered Assessment Year 2001-02 only. 3. The learned CIT (A) further erred in directing the learned Assessing Officer to issue notice u/s.148 of the I.T. Act for Assessment Year 2001-02 as per the provisions of section 150 of the I.T. Act. 3. First issue relates to confirming the disallowance of ₹ 1,44,98,140/- out of cost of construction. The brief facts are that appellant e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s argued that the entire cost of construction in terms of finance, had to be met with by Akta Real Estate Pvt Ltd. being co-developer. In such a situation allocation of interest paid by co-developer funds borrowed from bank for the purpose of development was beyond the terms of agreement. According to him, no capital was required to be contributed by the appellant in entire development of the project. Therefore, there was no question of allocation of interest. He has accordingly disallowed allocation of interest to appellant and has also worked out 20% of expenses (against 25% specified in the agreement) without interest as being the costs allocable to appellant. Thus Assessing Officer in the order of assessment had disallowed the excess ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned CIT (A) observed that, it is apparent that assessee has received interest free deposits of ₹ 1.55 crores and as far as sale proceeds of flat was concerned, the assessee has relinquished all its controls over negotiations with prospective buyers. Therefore, assessee has no control over the sale proceeds to be received by it. Further, the cost of construction is to be met by the co-developer and the entire construction has to be done by the co-developer. Assessee has no role to play whatsoever in the construction activity. Thus, assessee has no control over the cost allocable to it, being 25% of the total cost of construction. It is evident that in terms of the agreement, appellant has absolutely relinquished its control ov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der consideration. Accordingly, he treated the addition made by the Assessing Officer during the year under consideration as protective and they were confirmed also. Now the assessee is in appeal here before Tribunal. 8. Detailed written submissions have been filed by learned counsel of the assessee, which are placed on record, the written submission filed were explained also. 9. The learned D.R. on the other hand, firstly placed reliance on the order of learned CIT (A). It was further submitted that contention of the assessee that in case of co-developer who has shown 75% profit has been accepted by the department, because these were shown by the co-developer in their hand. The Assessing Officer find that assessee was entitled 25% sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r while confirming the addition on protective basis. Neither the agreement was found false nor is bonafide intention of assessee found false as the assessee who was having a land in its hand since long as prudent businessmen. The assessee entered into agreement with sister concern M/s. Akta Real Estate Pvt. Ltd. who has taken over the charge to develop the entire property on its behalf. The entire expenditure was incurred by M/s. Akta Real Estate Pvt. Ltd. All efforts were done to complete the project which took nearly 4 years from the date of agreement entered in the year 2000. All labour expenses, material expenses were born by sister concern by arranging loan from bank or from third party. No efforts have been done by the assessee; neith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attracted and the direction given by learned CIT(A), we find that there is no basis to attract these provisions. 12.1 The CIT(A) observed that the entire asset has transferred by way of sale to the builder whereas the facts are otherwise. The assessee was owner of the 1/4th share of the land in question and ownership right was vested with the assessee till the end of the project completed by the codeveloper. Joint business venture was entered into between assessee and co-developer in the year of 2000 and this Joint Venture continued on the terms and conditions of agreement. According to the terms and conditions the project was completed. The co-developer retains 80% of the profit and the same was offered for the taxation by filing retur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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