9911796707
TMI Blog2025 (3) TMI 928X X X X Extracts X X X X X X X X Extracts X X X X ..... the involvement of True Value in the sale transaction of the property by the assessee has to be treated in the capacity of a mere agent only. There was no fiduciary relationship between True Value and the assessee and in the absence of any such relationship True value either explicitly or implicitly couldn't have agreed to act on behalf of the assessee to sale the property owned by the assessee. It is also mentioned in this agreement that the booking price of Rs. 75 Lacs paid on 26.03.2012 by ASPL was received by True Value. Since, the True Value was neither the owner of the property nor power of attorney holder on behalf of the assessee and no reference of any agreement between the True Value and the assessee was appearing in this booking agreement, the payment of Rs. 75 Lacs could not have been received by True Value. In the absence of any evidence on record that True Value was an agent of the assessee, the booking agreement dated 1st March, 2012 was not at all enforceable and binding on the assessee. As rightly held by the AO, the commission payable to the agent for providing professional assistance was in the range of 2 to 5% and the payment of 50% of the sale consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not disclosed in the return. Therefore, the case was reopened under Section 147 of the Income Tax Act, 1961 (in short 'the Act') after recording proper reason. The assessment was completed u/s. 143(3) r.w.s. 147 of the Act on 29.12.2018 at total income of Rs. 3,07,97,263/-. 3. Aggrieved with the order of the AO, the assessee had filed an appeal before the First Appellate Authority, which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was allowed. 4. Now, the Revenue is in second appeal before us. The following grounds have been taken in this appeal: "1. The ld. CTT(A) erred in law and in facts by allowing: (4) the expenses claimed by the assessee amounting to (1) Rs 2.39,00,000/- as against the transfer expense and (2) Rs. 15,00,000/- made to True Value Nirman Pvt. LaL/TVNPL/ on account of the stamp duty and registration charges for the said property, although there was no obligation for such payment (totaling to Rs. 2,54,00,000/-) claimed against the receipt from sale of [immovable property of Rs. 5,04,30,000-sold to Chemedge Global Private Ltd. (CGPL)] which was earlier purchased from Almond Infrastructure Pvt. Ltd. (AIPL) for a consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y" developed by Almondz Infrastructure Pvt. Ltd. (AIPL), the details of which are as under: Sr. No. Premise No of Neptune Harmony Date of Purchase Consideration Paid (Rs) Registered Purchase Deed No 1 Shop No. 4 on ground floor 28.09.2011 2,50,00,000 10865 of 2011 dated 28.09.2011 2 Shop No. 101 on 1st Floor 28.09.2011 4,50,00,000 10867 of 2011 dated 28.09.2011 3 Shop No 201 on 2nd Floor 02.11.2012 2,56,50,000 6278 of 2012 dated 02.11.2012 Total purchase consideration paid 9,56,50,000 (ii) All these immovable properties were capitalized as workin-progress in the audited balance sheet of F.Y. 2012-13. (iii) The property being Shop No.4 on ground floor of Neptune Harmony was sold by the assessee during the year on 28.05.2013 for a consideration of Rs. 5,04,80,000/- to M/s. Chemedge Global Private Ltd. (CGPL). The assessee had, however, shown the net sale consideration of Rs. 2.50 Crores only in its books of accounts, which was reduced from the block of assets, as the gain derived on sale of property was short term capital gain. (iv) The assessee had claimed payment of Rs. 2.39 Crores to one M/s. True Value Nirman Pvt. Ltd. (in short 'True Value') on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard of. He, therefore, strongly supported the disallowance of expenditure of Rs. 2.39 Crores and Rs. 15 Lacs paid to True Value, which was non-genuine and sham transaction. He further submitted that the AO had rightly treated the sale consideration of property at Rs. 5,04,80,000/- and reduced it from WDV of block of assets. Accordingly, the disallowance of depreciation of Rs. 25,48,000/- on account of reduction of WDV was also justified. 7. Per contra, Shri Saurabh Soparkar, Ld. Sr. Counsel appearing for the assessee strongly supported the order of the Ld. CIT(A). He submitted that the initial agreement made by the assessee with True Value for sale of property to the prospective buyer i.e. ASPL was for a consideration of Rs. 3 Crores only. Subsequently, the buyer had transferred its right to its sister concern CGPL and, therefore, the second jump in the price of the property did not belong to the assessee at all but it belonged to the prospective buyer i.e. ASPL. He further submitted that the payment of Rs. 35 Lacs to True Value was rightly held by the Ld. CIT(A) as the cost of transfer. This payment was necessitated in order to sell the property by the assessee. The Ld. Sr. Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the vendor for sale of property stipulated as under: "(12) After obtaining previous written permission of the Management Body/VENDOR the PURCHASER shall be entitled to transfer/ sell, convey, mortgage, charge or in any way encumber or deal with or dispose of said Property or to assign, underlet or part with its interest under or benefit of this sale or any part thereof in the said Property and such approval shall not be normally denied unless the PURCHASER/occupier has committed breach or default in compliance of the terms and conditions of this sale deed or any other agreements entered into with of the Management Body or its rules resolution etc. as the case may be and if the activities of the transferor or transferee are not suitable to the Building/Management Body." 10. It is, thus, found that the assessee was required to obtain permission of the management body/vendor for sale of Shop No.4 and there was no stipulation that the permission has to be obtained from True Value as booking agent or that the booking agent was required to be involved in the future sale transactions. Thus, the contention of the assessee that it could not have sold the property without making an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any role played by True Value in this transaction. The Clause 3 of this sale deed reads as under: "3. The VENDOR and PURCHASER have negotiated for the sale of Shop No.4, admeasuring about 3155 sq.ft. i.e. 293.10 sq.mts.,(Super Built Up area) Showroom on Ground Floor and more particularly described in the Schedule written hereunder (hereinafter referred to as "the said Property")." Thus, the negotiation for sale of Shop No.4 was made directly between the vendor and the purchaser and no role of True Value was acknowledged in the sale deed. Further, as per the sale deed the entire sale consideration of Rs. 5,04,80,000/- was received by the vendor (assessee) directly vide RTGS on 17.05.2013 of Rajkot Nagrik Sahakari Bank Ltd. 13. The assessee had also filed a copy of agreement dated 31.05.2013, as per which the assessee had agreed to return the excess sale consideration of Rs. 2,39,80,000/- after deduction of expenses of stamp duty and registration fee of Rs. 15 Lacs, to True Value. As rightly pointed out by the AO, this agreement was post the date of execution of sale deed by the assessee. As already discussed earlier, True Value had no booking right in the property already acquir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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