TaxTMI 
TaxTMI 
2015 (12) TMI 502
X X X X Extracts X X X X
X X X X Extracts X X X X
....been heard and record perused. Facts in brief are that the assessee is a firm which is carrying on business of building construction and had completed two projects viz. Paschim Apartments consisting 'A' to 'C' wing and Shaan Apartments consisting only one wing i.e. 'D' Wing long back. During the course of assessment proceedings the AO noted that the assessee in the balance sheet has shown advance against 'Paschim Apartments', Kalpavruksha Developers, Mercury Plants, etc. The assessee was required to submit explanation along with various details, however, the assessee did not find any favour from the AO and accordingly the AO assessed the total income of the assessee at Rs. 2,77,00,000/- and disallowed the same. Being aggrieved with the orde....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and Varnishes Limited for ejectment (eviction from property) and other reliefs. The tenant also filed suit seeking to establish tenancy rights in respect of the suit property used and occupied by them. On 28-7-2003, the Assessee entered into an MOU with M/s Class Construction & Hotels Pvt. Ltd. granting them development rights in respect of the land in occupation of M/s Mercury Paints. An advance of 51 lacs was paid to the assssee. The MOU could not be completed and the same was cancelled on 02.04.2004. On 23-12-2002, the Assessee entered into an MOU with Kalpavruksha Developers for constructing Building E on the 4,190 sq. meters of land which was in occupation of Mercury Paints and Varnishes Ltd. An advance of Rs. 51 lacs was to be paid i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... AND WHEREAS the lease has expired and thereafter the said lessee/tenant filed a suit in appropriate court in Mumbai, seeking to establish tenancy rights in respect of the said property in their use and occupation. AND WHEREAS THE VENDORS have also filed suit against the said lessee tenant for ejectment and other reliefs and the same is pending ... " This basically proves that the land sought to be transferred already had pending litigations with respect to its occupation and possession. 7. On 29-11-2005, Small Cause Court directed the Court Registrar to take the possession of the suit premises and allow the assessee and Kalpavruksha Developers to remain in physical and actual possession of the premises as agents of the Court Receiver....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ement referred to therein of 2,01,00,000/- (1,00,00,000/- paid on or before the execution of the consent terms and the second installment of 1,01,00,000/- to be paid on registration of Deed of Rectification and additional consent terms filed in the Court." 8. In the return filed for assessment year 2007-08 the assessee offered a sum of 4.78 Cr. as their income for A.Y.2007-2008. The sum comprises of Rs. 2,77 Cr. referred to in Conveyance Deed dated 28th February, 2005 as modified by the Deed of Modification signed on 10th April, 2006 and filed on 2nd May, 2006. In the Auditors report, the Notes to the Books of Accounts of A.Y. 2007-2008 clearly state as under: "The Assessing Officer has added '2,77,00,000/- on account of sale of Pasc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the assessee. On the other hand, the CIT(A) considered the matter and concluded the same in favour of the assessee. Hence, penalty ought not to be levied in a situation where there arises a difference of opinion. Under the circumstances discussed above, the assessee cannot be accused of any concealment of income. The notes to accounts of AY 2007-2008 also go on to clearly state the facts and circumstances of the pending litigations pertaining to AY 2005-2006 related to income tax as well as those pertaining to possession. There is also no dispute to the fact that the assessee has offered its 'real income' for taxation and paid the tax accordingly in the return of income for AY 2007-2008 after the conveyance attained finality and all....