Revenue's appeal on profit deletion dismissed by Tribunal due to consideration recipient discrepancy. Double taxation issue not pursued.

The Revenue's appeal against the deletion of an addition of Rs. 72,44,000/- on account of profit on the sale of land was dismissed by the Tribunal. It was found that the entire consideration was received by another entity and not the assessee, as per a development agreement and court orders. Additionally, the cross-objection regarding double taxation of Rs. 31,00,000/- in the hands of two entities was not pressed by the assessee, leading to its dismissal by the Tribunal. The Tribunal upheld the CIT(A)'s decision, ensuring no double taxation and confirming the findings.

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Issues Involved:
1. Deletion of addition of Rs. 72,44,000/- made on account of profit on sale of plot of land.
2. Double taxation of Rs. 31,00,000/- in the hands of M/s. Aditi Construction and Hindustan Earth Movers Pvt. Ltd.

Issue-Wise Detailed Analysis:

1. Deletion of addition of Rs. 72,44,000/- made on account of profit on sale of plot of land:

The Revenue appealed against the CIT(A)'s decision to delete the addition of Rs. 72,44,000/- made by the AO. The AO had observed that the assessee, along with a confirming party, sold a plot and received Rs. 46,08,000/- and Rs. 72,00,000/- as per the sale deed. The AO added the difference of Rs. 72,44,000/- to the assessee's income, alleging it was undisclosed.

The assessee contended that the payments were received by another entity, M/s. Aditi Construction, as per a court decree, and the assessee had no jurisdiction over these payments. The CIT(A) examined the facts, including the development agreement and court orders, and concluded that the AO had mixed up the facts. The CIT(A) found that the assessee transferred development rights for Rs. 1.60 crores, and the payments were reflected in the books of the respective entities.

The CIT(A) noted that the development agreement allowed M/s. Tirupati Corporation to collect money towards the cost of land and FSI. The CIT(A) observed that the AO's action in taxing Rs. 72,44,000/- as undisclosed sales in the hands of the assessee was incorrect, and the addition was deleted.

The Tribunal upheld the CIT(A)'s decision, noting that the AO had erred in adjusting the sale consideration of Rs. 45,64,000/- with the sale consideration of Rs. 46,08,000/- and Rs. 72,00,000/-. The Tribunal confirmed that the entire consideration was received by M/s. Tirupati Corporation and duly shown in their income, with no evidence of any part received by the assessee. Thus, the Revenue's appeal was dismissed.

2. Double taxation of Rs. 31,00,000/- in the hands of M/s. Aditi Construction and Hindustan Earth Movers Pvt. Ltd.:

The assessee raised a cross-objection regarding the CIT(A)'s failure to decide on the merits of the second ground of appeal, contending that the addition of Rs. 31,00,000/- resulted in double taxation. The assessee argued that the amount was offered to tax in the case of Hindustan Earth Movers Pvt. Ltd., and the CIT(A) had directed the AO to verify and delete the addition if taxed again.

The AR of the assessee submitted that the amount of Rs. 31,00,000/- was received from M/s. Shree Tirupati Infrastructure and transferred to Hindustan Earth Movers Pvt. Ltd.'s books. The total amount of Rs. 1,33,00,000/- was credited and offered to tax in the assessee's return. The Tribunal had previously decided in favor of the assessee, allowing the appeal and referring the matter back to the CIT(A).

Given these submissions, the assessee did not press the cross-objection for adjudication, and the Tribunal dismissed the cross-objection as not pressed.

Conclusion:

The Tribunal dismissed both the appeal of the Revenue and the cross-objection of the assessee, confirming the CIT(A)'s findings and ensuring no double taxation occurred. The order was pronounced in the Court on April 29, 2015, at Ahmedabad.

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