TaxTMI 
TaxTMI 
2019 (1) TMI 883
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....o-op. Hsg. Society and one Smt. Vanitaben Dilipkumar had sold an immovable property viz. Shop No. 7 situated at 3rd Eye-2 Complex of Subhratna Co-op. Hsg. Society Ltd. to one Shri Kutubdin F. Kapidia for a consideration of Rs. 281 lakhs. The AO sought information from the assessee in this regard. It was explained by the assessee that the assessee-company was appointed as developer by the society viz. Subhratna Co-op. Housing Society to develop the said scheme as per the development agreement. The assessee was also authorized by the society to accept amount of booking and sale of units in the said scheme on behalf of the assessee. It was explained that the property in question was earlier booked by Smt. Vanitaben Dilipkumar for Rs. 179 lakhs. Thereafter the said shop no. 7 was sold to Kutubdin F. Kapidia for a consideration of Rs. 281 lakhs. The buyer has paid a sum of Rs. 90 lakhs to the assessee, which was taken by the assessee as credit to the society and reflected in their books. The balance amount of Rs. 191 lakhs was paid to Vanitaben Dilipbhai (Rs. 179 lakhs against her booking amount and the balance amount of Rs. 12. 00 lakhs as her profit on sale). After considering this ex....
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....eceived against the sale price of Rs. 269 lakhs as agreed vide banakhat agreement. It was received by the assessee on behalf of the society and due credit has been given to the society in their accounts. Therefore, there is no question of treating the same as income of the assessee. 6. We have heard both the parties and gone through the orders of the Revenue and other details available on record. The case of the assessee is that amount of Rs. 90 lakhs received by it was on behalf of the society which was duly reflected in accounts of the society, and therefore, question of treating the same as profit to this extent in the hands of the assessee does not arise. Whereas, the case of the Revenue was that as per clause 25(a) of the development agreement, profit or income or any benefit or loss that may arise out of the sale of property in the project belongs to the developer i. e. assessee, and therefore, surplus/profit generated out of such transactions will belong to the assessee and is to be taxed accordingly. We find that the ld. CIT(A) has considered all these aspects in detail. He has considered development agreement entered into by the assessee and the society, and also accoun....
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....has received Rs. 179 lakhs in the preceding years through different cheques from Vanitaben Dilipkumar as booking amount being a developer, to whom initially the aforesaid shop was sold for the society. Subsequently this shop was sold in the year under consideration by Vanitaben Dilipkumar to Kutubudin F. Kapadia in consideration of Rs. 281 lakhs which included the profit of Rs. 12 lakhs received by Vanitaben Dilipkumar. 2.4. The AO observed that as per the development agreement entered by the appellant with the society namely Subhratna Co. op, Housing Society Ltd. dtd. 10. 07. 2008 and its clause No. 25 (a) it was observed that the profit or income or any benefit or loss that may arise out of the disposal of the premises (land and construction and infrastructure) of the proposed project will belong to the developer. Further all surplus that may be received in addition to the cost of the project to include the said consideration of the land payable to the society, received from the prospective acquirers of the premises shall absolutely belong to the developer as its profits. The losses, if any, shall also be borne and paid by the developer. As per the interpretation of the ....
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....ement was provided to the appellant. As per the aforesaid agreement, out of the sale consideration of Rs. 269 lakhs the appellant had received Rs. 179 lakhs in the preceding years on behalf of the society and the balance amount of Rs. 90 lakhs in the year under consideration for the society. Thereafter in the year under consideration this shop was sold to Kutubudin F. Kapadia and 9 other persons for Rs. 281 lakhs by Vanitaben Dilipkumar by earning the profit of Rs. 12 lakhs. Since the society had to obtain balance of Rs. 90 lakhs out of the sale consideration which has been received by the appellant during the year under consideration while registered the sale deed in favour of Kutubuddin F. Kapadia. So the appellant submitted that it was the money received from Shrl Kutubuddin F. Kapadia for and on behalf of the society which does not belong to the appellant. Therefore, the question of having any surplus/profit of the project to the above extent of Rs. 90 lakhs which was nothing but the sale consideration belonging to the society does not arise at all. 2. 8. Having considered the facts and submission, it is noticed that a registered development agreement dtd. 10. 7. 2008 ....
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.... the Third Part to make available for them, Shop No. 06 for the party of the Second Part. In this behalf, all the terms of allotment of said Shop No. 06 were finally decided, fixed and agreed by and between the parties hereto," 2.9. As per this agreement the appellant was entitle to receive 25% of the total cost of the construction as a development fees being income. Through this agreement, the appellant has been given the right to make the booking or to enter into an agreement and collect the money for booking amount for sale of the unit developed for and on behalf of the said society. All the receipts from the booking amount were shown in the balance sheet as advance from customers and amount given to the said society were shown in the loans and advances to others in pursuance to the agreement. 2.10. It has been noticed that as against the sale of shop No. 7, at ground floor for the consideration of Rs. 269 lakhs sold to Vanitaben Dilipkumar advance payment of Rs. 179 lakhs was received by the appellant for and on behalf of the society in the preceding years i. e. Rs. 1 crore in F. Y. 2008-09, Rs. 78 lakhs in F. Y. 2009-10 and balance Rs. 1 lakh in F. Y. 2012-13....
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....he appellant obviously for the reason that those were not pertaining to the appellant but the same were received as an agent for and on behalf of society. Thus, there was no difference on facts with regard to receipts of the sale proceeds of Rs. 90 lacs in the year under consideration. 2.13. It is worth here to mention that in the preceding years the appellant had collected the receipts towards the sale proceeds of various units for and on behalf of the society in different years as under:- SHUBHRATNA CO. OP. HOU. SOC. LTD. Year Unit Sq. Feet Doc Amount Charges Sales 31/03/2009 31/03/2010 12 30337. 00 149287500. 00 2936500. 00 152224000. 00 31/03/2011 11 21442. 00 50131364. 00 3898900. 00 54030264. 00 31/03/2012 3 9680. 00 41721000. 00 2015700. 00 43736700. 00 31/03/2013 3 9473. 00 53450000. 00 297000. 00 53747000. 00 31/03/2014 3 8883. 00 44030429. 00 44030429. 00 Total 32 79815. 00 338620293. 00 9148100. 00 347768393. 00 ....