TaxTMI 
TaxTMI 
2015 (3) TMI 568
X X X X Extracts X X X X
X X X X Extracts X X X X
....in law, the CIT(A) erred in deleting addition of Rs. 19.56 lacs made on account of option money received in exchange of option right sold by the assessee. 4. On the facts & circumstances of the case and in law, the CIT(A) erred in deleting the disallowance made of Rs. 8,53,l89/- made towards the administrative charges paid to sister concern without appreciating the fact that the said expenditure was a subject matter of great controversies within the members of AOP itself 5. The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. 2. Though initially Ld. DR sought adjournment but it was pointed out that it is an old appeal then Ld. DR was fair enough to plead the matter and in this manner this appeal was heard today. 3. Ground No.1, relates to two additions namely Rs. 7,22,250/- and Rs. 55,94,000/-. The issue relating to a sum of Rs. 7,22,250/- is discussed in the order passed by Ld.CIT(A) in para-2 alogwith issue raised in Ground No.2, which relates to addition of Rs. 1,46,910/-. The other part of Ground No.1, which relates to disallowance of a sum of Rs. 55,94,000/- is discussed in the order passe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s well as Ld. CIT(A). The assessee had purchased a property known as Jade Garden,Western Extension from Shri Satish Pai and for the purpose of developing the land purchased, it entered into an agreement with R&M Trust having office at Bangalore on 1/3/1995 for developing the property. As per the agreement, the developer was to carry out development work specified in the agreement and was given licence to carry out work. Subsequently, by an agreement dated 2/3/1996, after getting the possession of the property it entered into fresh deed with R&M Trust for development of the property as approved by the Panchayat. The terms of development to be carried out was spelt out in the agreement. In the agreement it is mentioned that the rate to be determined for the purpose of development is with R&M Trust. The entire cost of development was to be borne by R&M Trust besides making deposit for carrying out the work. Subsequently, it was agreed upon by the parties that the development charges payable to R&M Trust was Rs. 50/sq.ft. From the gross consideration received on sale of flats developed by the said R&M Trust, Rs. 50/sq.ft. was payable and as per terms of agreement a sum of Rs. 59,94,250....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... been wrongly deleted by Ld. CIT(A). He submitted that these disallowances should be restored and order passed by Ld. CIT(A) should be set aside. 5. On the other hand, Ld. AR submitted that the order passed by Ld. CIT(A) is a speaking order. It was submitted that all evidences and documents were submitted to the AO and on the basis of those evidences and documents Ld. CIT(A) has arrived at a conclusion that these additions were not called for. To substantiate these submissions Ld. AR has referred to the following evidences, copies of which are filed in the paper book. (i) (a) Regarding addition of Rs. 7,22,250/-, sale agreement dated 5/2/1997 entered into by the assessee with Mr. Subash Menon & Mrs. Radhika Subash, copy of agreement placed at pages 22 to 58 of the paper book. Relevant clause 11(d) relying upon which the relief has been given by Ld. CIT(A) is at page 36 of the paper book, which read as under: "(d) In the event of the PURCHASER not being desirous of terminating the agreement, the VENDER/DEVELOPER shall be liable to pay the PURCHASER, for every month of delay beyond 3 months of the date of possession as contemplated in Clauses 11(a) and (b) above, upto the da....
X X X X Extracts X X X X
X X X X Extracts X X X X
....development charges in respect of plot numbers is placed at page 202 of the paper books, details are described as under: Plot No. Name of the Party Area (in sq.ft.) Development charges. Jade Garden 424 Harish Bijoor 5980 299000.00 Jade Garden 50 Acres 130 Bipin Johny 12965 648250.00 139 Krishnan Advaney 9550 477500.00 140 Krishnan Advaney 9550 477500.00 Jade Garden 40 Acres 654 Sunil B. Peevekar 5325 266250.00 786 Priya Alex 5985 299250.00 714 Kishore Rao 4700 235000.00 71 Kishore Rao 5100 255000.00 657 Radhika Subhash 3815 190750.00 725 Shobha Sunder 5630 281500.00 716 Peter Rodrigues 5100 255000.00 778 Subha Hari 4565 228250.00 723 Ananda Mohan 3925 196250.00 775 Kshitja Krishnaswamy 4575 228750.00 638 Jayanta Majumdar 5390 269500.00 712 V Krishnan 4700 235000.00 768 Ashutosh Pujari 4560 228000.00 784 Bijendra Singh Verma 4665 233250.00 653 Sonia Dewan ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....properties and requires to be taxed as income. Accordingly, he brought the amount of Rs. 19,56,000/- to tax as income of the assessee. Before Ld. CIT(A), it was pleaded that while making the addition the AO did not apply his mind as these deposits do not constitute receipts. Vide letter dated 17/2/2003, which was submitted to AO, it was explained that the assessee has received a sum of Rs. 19,56,000/- from five parties out of which deposit received from three parties were refunded back in subsequent year as those parties did not exercise their option for purchase of flats. The balance two parties retained the amount upto the year 2003 as option deposit and due to non-exercise of option to purchase any flats, the said amount was held in the account as "option deposit". Thus, it was pleaded that the said amount could not be considered to be income of the assessee. With the following observations Ld. CIT(A) has deleted the addition. "5.3 I have carefully considered submission of authorised representative of the appellant, order of AO and other material available on record. The appellant has entered into option agreements with the following five parties Beautiful Realtors P. Ltd.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... received in earlier years. It has also been found by Ld. CIT(A) that the money was refunded to three parties in assessment year 2001-02. In respect of balance two parties, since no property was allotted and no sale agreement was executed, therefore, there was no question of considering the amount received as sale consideration. Thus, it was pleaded by Ld.AR that addition has rightly been deleted by Ld. CIT(A) and his order should be upheld. 8.3 We have heard both the parties and their contentions have carefully been considered. The amount received by the assessee was against the right of option given to the respective parties and even according to the findings of Ld. CIT(A) these amounts were not received by the assessee in the year under consideration. Out of five parties, three parties refunded back the amounts. Regarding balance two parties, they still did not opt for purchase of plots. In these circumstances, in absence of any contrary material, we do not find any fault in the relief given by Ld. CIT(A). We decline to interfere and this ground of the Revenue is also dismissed. 9. Apropos Ground No.4; this issue is discussed by Ld. CIT(A) in para-7 of the impugned order. ....