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TMI Blog2018 (11) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... s 2010-11 & 2011-12. Therefore, we find no reason to deviate from the same and inclined to confirm the impugned order. However, the same shall be subject to verification of the fact that similar treatment has been given to the aforesaid payments by AAEPL in its books of accounts and the stated payments have not been claimed as expenditure therein. The Ld. AO is directed to delete the additions after verifying the aforesaid fact, if found correct. The assessee is directed to provide documentary evidences to substantiate the same. Appeal dismissed. - I.T.A. No.2539/Mum/2017 - - - Dated:- 16-11-2018 - Shri Joginder Singh, VP And Shri Manoj Kumar Aggarwal, AM For the Assessee : Shri F.B. Andhyarujina- Ld. AR For the Revenue : Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it had transferred an amount of ₹ 74.34 Lacs to Work-in-progress AAEPL Project Account. The perusal of Form 26AS revealed receipts of ₹ 155 Lacs stated to be received by the assessee from an entity namely A.A.Estate Private Limited [AAEPL] as advance amount against the projects. The same was not offered to tax in view of the fact the assessee followed Project Completion Method of Accounting to offer the project income to tax. However, upon perusal of terms of the agreement, Ld. AO concluded that the assessee was merely rendering professional / technical services to the aforesaid entity and therefore, the plea of the assessee could not be accepted particularly when the same was rejected in preceding years also and the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rendered) not in proportion to services rendered but in proportion to certain percentage (i.e. 20%) of the profits of the project. Since the execution/completion of project was spread over to number of years, therefore, the profit on such projects could not have been worked out in particular each year and therefore, the appellant's remuneration (for the services rendered) could not have been worked out in each particular year. The appellant's remuneration could only be worked out/ascertained only on completion of the project. It is also worth to mentioned here that as per clause 9 of the MOU, remuneration was not required to be payable in the event of losses in respect of project. Thus, even though the appellant would have ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect completion method of accounting. On the completion of the project, the amount quantified as the remuneration of the assessee was offered by the assessee for taxation and the same was accordingly claimed as expenditure by the builder. Till the completion of the project, the amount was not claimed by the builder as expenditure. The Ld. CIT(A) has also taken into consideration the accounting method in relation to different projects and it was found that wherein there was a resultant loss, no income was offered by the assessee; and where there was a profit, the assessee had shown income being the remuneration received by him on certain fixed percentage out of the profits of the project. There was no discrepancy either in the accounts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resorts, malls and construction of buildings. It had all the necessary expertise, knowledge and skills for the purpose of acquisition and utilization of development rights and to render related services. Accordingly, it entered into an agreement to render services of varied nature vide agreement dated 12/06/2002, supplementary agreement dated 13/06/2002 with an entity namely AAEPL. The terms of the agreement were renewed from time to time up-to 10/06/2017. As per the terms of the contract, the assessee was to be remunerated with a commission equivalent to 20% of profits and gains derived from the projects undertaken by him with AAEPL and no commission was payable to assessee, in the event of losses. The assessee continued to render the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l for subsequent AYs 2010-11 2011-12 vide ITA Nos. 7022- 23/Mum/2014 dated 24/06/2016, the copies of which are on record. Therefore, we find no reason to deviate from the same and inclined to confirm the impugned order. However, the same shall be subject to verification of the fact that similar treatment has been given to the aforesaid payments by AAEPL in its books of accounts and the stated payments have not been claimed as expenditure therein. The Ld. AO is directed to delete the additions after verifying the aforesaid fact, if found correct. The assessee is directed to provide documentary evidences to substantiate the same. 6. Resultantly, the appeal stands dismissed. Order pronounced in the open court on 16th November, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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