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TMI Blog2017 (2) TMI 1551X X X X Extracts X X X X X X X X Extracts X X X X ..... ar under consideration. - Shri R.P. Tolani, JM And Shri Anil Chaturvedi, AM For the Appellant : Shri Sunil U. Pathak. For the Respondent : Shri Vinod Kumar. ORDER PER ANIL CHATURVEDI, AM : This appeal of the assessee is emanating out of the order of Commissioner of Income Tax (A)-12, Pune, dated 20.01.2015 for the assessment year 2012-13. 2. The relevant facts as culled out from the material on record are as under :- 2.1 Assessee is a partnership firm stated to be engaged in the business of Promoters and Developers and the nature of activities involved the purchase of land, development rights of land, construction and sale of flats. Assessee filed its return of income for A.Y. 2012-13 on 28.09.2012 declaring total income of Rs. 86,03,49,430/-. The case was selected for scrutiny and thereafter the assessment was framed u/s 143(3) and the total income was determined at Rs. 106,03,49,430/-. Aggrieved by the order of AO, assessee carried the matter before ld. CIT(A), who vide order dt. 20.01.2015 in Appeal No. (PN/CIT(A)-12/DCIT Cent Cir 2(2)/308/2013-14) dismissed the appeal of the assessee. Aggrieved by the order of ld. CIT(A), assessee is now in appeal before us and has raised the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offered only Rs. 100 crores for taxation. The assessee was asked to show cause as to why the balance amount of Rs. 20 crores was not offered to tax. The assessee inter-alia submitted that the sale consideration agreed to be paid by purchaser (Symboisis) was inclusive of transfer of land, construction cost and other development expenses for educational purpose. It was further submitted that generally the F.A.R. available is 1 but for educational building the same is 1.5. It was submitted that it was necessary to transfer the land in the name of Institute to have the FAR of 1.5 as was committed by the assessee. It was further submitted that as per M.O.U the consideration of Rs. 120 crores was to be paid as under : 1) Rs. 80 crores on execution of sale deed, 2) Rs. 20 crores after 7/12 extract in the name of purchaser 3) Rs. 9 crores after preliminary plans are sanctioned. 4) Rs. 11 crores after final plan sanction with full utilization of F.A.R. i.e., 1.5. It was further submitted that since the preliminary plan and final plan with F.A.R. of 1.5 could not be completed, the assessee did not had a right for receipt of Rs. 20 crores and therefore the same was not recognized as revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent are reproduced as under : The Purchaser herein was in search of the land for expansion of its educational institutes establish separate academic streams near, Lohagaon and received information as to Vendor No. 2 herein has obtained development rights along with the rights to sell the said entire land and has also obtained sanction to the layout for the Said Entire Land and shown interest to purchase Plot No. II admeasuring area about 01 HECTARE 95Ares i.e. 19500Sq. Mtrs. which is inclusive of open space admeasuring area about 2000 sq.Mtrs. as shown in the plan annexed hereto as Annexure-5, and after negotiation at length and the Purchaser herein offered to the Developer to purchase Plot No. II of ownership of Vendor No. I and in possession of Vendor No. 2 for consideration of Rs. 120,00,00,000/- (Rupees One Hundred Twenty Crores Only) and which aforesaid plot No. 11 is more particularly in the Schedule-III written hereunder and herein after is referred as the SAID PROPERTY . 1. PAYMENT OF CONSIDERATION:- As stated in preamble paragraph No. J' hereinabove written. the agreed consideration of the Said Property agreed between the Vendor No. 2 on one hand and Purchaser herein o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto and to the use of the Purchaser, their executors, administrators, assigns forever. Irrespective of the deferred payment the sale deed executed herein shall be absolute. 10. DELIVERY OF POSSESSION:- At the time of execution these presents the Vendor No. 1 and Vendor No. 2 have handed over vacant and peaceful possession of the Said Property to the Purchaser herein and by executing these present confirms delivery of possession of the Said Property in favour of the Purchaser herein. The Purchaser herein declares that, it has received the possession of the Said Property. 2.1.10 The above clauses in addition to the clauses reproduced by the learned AO in the assessment order, leave no doubt that the Appellant would receive Rs 120 cr on transfer of land. The Appellant wishes that the MOU also be referred as it provides payments to be made on achievement of milestones.. However, according to me, MOU, transfer of the property has taken place, provides payment of 120 cr only for milestones. transfer of land. Therefore, for considering taxability of Rs 120 cr, it is to be seen as to whether entire amount has accrued to the Appellant or not during the year under consideration. 2.1.11 The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having area of around 19,500 sq.mtrs. out of the sanction lay-out of Survey No. 227 situated at Village Lohegan, Taluka Haveli District, Pune was agreed to be sold to Symboisis @ 4200 per sq.ft subject to the maximum area of construction of the said plot was at 1.5 F.A.R. The agreed rate and total consideration to be paid by the purchaser was inclusive of transfer of land, the construction cost and other development expenses. Further the understanding between the parties was to sell the land along with building for educational purpose. It was submitted that generally the FAR available for educational building was 1.5. For using the FAR 1.5 it was necessary to transfer the land in the name of Institute. Assessee had entered into registered sale deed on 02.02.2012 in part performance of M.O.U. The M.O.U which was an integral part duly provided with the sale consideration of Rs. 120 crores and was to be paid as per the terms stipulated in M.O.U. He further submitted that the conditions pertaining to the execution of sale deed and the transfer the name of purchaser by 7/12 extract was completed prior to 01.12.2012 and therefore assessee had received Rs. 100 crores and the same was offe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced to pay the amount as per M.O.U and therefore the amount of Rs. 20 crores did not accrue to the assessee. He further submitted that since the assessee has offered Rs. 20 crores in subsequent years and if the Revenue s contention of taxing the amount of Rs. 20 crores in the year under consideration is accepted, it would amount to taxation the same income twice which is not permissible. He therefore submitted that the addition of Rs. 20 crores be deleted. Ld. D.R. on the other hand supported the order of AO and ld. CIT (A) and submitted that as per the Transfer of Property Act, on registration of sale, the amount accrued to the assessee. He therefore submitted that the AO has rightly made the addition. He thus supported the order of AO. 6. We have heard the rival submissions and perused the material on record. The short issue in the present case is whether the amount of Rs. 20 crores which admittedly has not been received by the assessee during the year under consideration is taxable in the year under consideration as accrued receipt. It is an undisputed fact that as per the MOU dt.02.02.2012 assessee had agreed to sell land having area of 19,500 sq.mtrs along with constructed edu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponding liability of the other party to pay the amount and only then it can be said that for the purpose of taxability that the income is not hypothetical and has really accrued to the assessee. Considering the totality of the aforesaid facts and relying on the aforesaid decisions, we are of the view that the assessee did not get the right to receive Rs. 20 crores in the year under consideration and therefore it cannot be considered as income for the year. Further it is assessee s submission that the amount of Rs. 20 crores has been offered to tax in subsequent years. The aforesaid factual submission of the assessee has not been controverted by the Revenue. If that be the case, then the taxation of Rs. 20 crore in the year under consideration and in subsequent years would amount to double taxation of the same amount. Before us Revenue has also not placed any material on record to demonstrate that the M.O.U that has been entered into by the assessee is an afterthought for the purpose of avoidance / deferment of tax. Considering the totality of the facts and after relying on the aforesaid decisions, we are of the view that in the present case the amount of Rs. 20 crores which has no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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