TaxTMI 
TaxTMI 
TaxTMI 
2019 (1) TMI 534
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.... to the extent of Rs. 11.50 Crores. 3. Shri Y. Sridhar, the Ld. representative for the assessee, submitted that the assessee-company entered into a Memorandum of Understanding with land aggregators, namely, Shri Kamalesh Kumar Sheth and Shri S. Venkataramanan, to purchase 50 acres of landed property in Perumpakkam. Referring to the Memorandum of Understanding, a copy of which is available at page 153 of the paperbook, the Ld. representative submitted that the assessee-company carried out the transaction through its subsidiary company, namely, M/s Varun Manian Realty & Construction Private Limited. Initially, according to the Ld. representative, an advance of Rs. 1.33 Crores was paid by the assessee on behalf of M/s Varun Manian Realty & Co....
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....rores shall be paid in six equal instalments starting from 1st April, 2013 and ending on 30th September, 2013. A copy of the order of the High Court is available at page 135 of the paper-book. Referring to page 185 of the paper-book, the Ld. representative submitted that this is the Memo of Settlement filed before the High Court. Since Shri Kamalesh Kumar Sheth and Shri S. Venkataramanan could not repay the money as per the compromise decree, according to the Ld. representative, they have executed a sale deed in respect of a commercial property, a copy of which is available at page 227 of the paper-book. In fact, according to the Ld. representative, Shri KamaleshKumar Sheth executed a sale deed in favour of the assessee on 30th September, 2....
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....luding that the assessee has paid only Rs. 1 Crore and acquired the property worth Rs. 12.5 Crores. Hence, according to the Ld. representative, the addition of Rs. 11.5 Crores cannot stand in the eye of law. 6. Shri Y. Sridhar, the Ld. representative for the assessee, further submitted that the Assessing Officer has not considered this so-called income of Rs. 11.5 Crores as enhanced by the CIT(Appeals) in the assessment order. According to the Ld. representative, this is a new source of income which was not considered by the Assessing Officer at all. Referring to the judgment of Madras High Court in CIT v. Chaganlal Kailas & Co (1984) 19 Taxman 536, the Ld. representative submitted that the power of the CIT(Appeals) to enhancean assessment....
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....res. The assessee has paid only Rs. 1 Crore, therefore, according to the Ld. D.R., the assessee has received Rs. 11.5 Crores. Hence, it has to be assessed as income. On a query from the Bench, can the Department go beyond the order of the Madras High Court wherein it is stated that Shri Kamalesh Kumar Sheth and Shri S. Venkataramanan have to pay Rs. 14.5 Crores? the Ld. D.R. very fairly submitted that he is placing reliance on the observation made by the CIT(Appeals). 8. We have considered the rival submissions on either side and perused the relevant material available on record. Admittedly, the assessee-company nominated Shri Kamalesh Kumar Sheth and Shri S. Venkataramanan as land aggregators for acquiring 50 acres of land. Shri Kamalesh....
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....uted a sale deed for Rs. 12.5 Crores and the balance has to be paid by Shri Kamalesh Kumar Sheth and Shri S. Venkataramanan. The judgment of Madras High Court clearly says that Shri Kamalesh Kumar Sheth and Shri S. Venkataramanan are jointly or severally liable to pay the money. In compliance with the direction of the High Court, Shri Kamalesh Kumar Sheth executed the documents for discharge of his liability. Therefore, the CIT(Appeals) is not justified in enhancing the assessment by holding that the assessee has paid only Rs. 1 Crore and it received property to the extent of Rs. 12.5 Crores, therefore, the balance of Rs. 11.5 Crores as income of the assessee. This observation of the CIT(Appeals) is contrary to the judgment of Madras High ....