TaxTMI 
TaxTMI 
2020 (11) TMI 68
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....d cancelled. The arbitration award ordered to execute sale deeds pertaining to approx. 79 acres in favor of Manipal University in lieu of the advance received. 4. The learned C.I.T. (A) ought to have appreciated the fact that the appellant has disclosed the income of Rs. 150 crores in the financials as per the Arbitration Award in AY 16-17. The assessment proceeding for this assessment year has been completed with NIL additions. 5. The learned C.I.T. (A) has erred by not considering the fact that the same income cannot be taxed twice both in AY 10-11 as well as AY 16-17. 6. The learned C.I.T. (A) ought to have appreciated that as per the "Guidance Note on Recognition of Revenue by Real Estate Developers" issued by the ICAI, "so long as such acts, which the seller is obliged to perform, have not been performed, no revenue shall be recognized.". 7. The learned C.I.T. (A) has erred by recognizing revenue on the Appellant without considering the fact that the Appellant herein is not being reimbursed by the buyer for any costs. 8. The learned C.I.T. (A) has erred in not considering the submission of the Appellant that according to Accounting ....
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....d 4 sale deeds conveying 50 Acres of land to the buyer as per copy of Four Registered Sale Deeds available on pages 56 to 134 of the paper book. Thereafter on 20.03.2010, the buyer wrote a letter to the assessee copy available on pages 191 to 192 of the paper book in which it is stated that the assessee has failed to fulfil many of the terms and obligations of the agreement and it is also stated in this letter that in view of clause 14 of the agreement dated 01.06.2009, the buyer terminates this agreement dated 01.06.2009 and also cancels the sale deeds already executed and asked the assessee to refund the amount of 100 Crores plus Rs. 10 Crores being the amount spent by the buyer on account of legal fees, stamp duty and registration expenses together with a compensation of Rs. 100 Crores being opportunity cost of the buyer. As noted on page 9 of the Arbitration Award dated 02.09.2015, one more letter dated 15.01.2011 was written by the buyer to the present assessee being vendor that despite promises to refund the money, the vendor has not refunded the money and if the money is not refunded within 45 days, the purchaser will initiate legal action. Subsequently, O. S. No. 2963/2011 ....
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....untas with a value of Rs. 150 Crores. 4. This is the claim of the assessee before us that since, all four sale deeds executed in F. Y. 2009 - 10 were cancelled as per the Arbitration Award dated 02.09.2015, it should be held that there was no sale of land in F. Y. 2009 - 10 relevant to the present Assessment Year 2010 - 11 and entire sale of land has taken place in F. Y. 2015 - 16 relevant to A. Y. 2016 -17. Learned AR of the assessee also submitted that in that year, the assessee has duly disclosed the capital gain on sale of 79 Acres 21.26 Guntas land with a value of Rs. 150 Crores and therefore, no capital gain on sale of land is taxable in the present year. At this juncture, this was a query of the bench as to whether there is some common lands in the sale deeds executed in F. Y. 2009 - 10 and F. Y. 2015 - 16 and in reply, it was submitted by the learned AR of the assessee that there are some common pieces of land in these sale deeds executed in F. Y. 2009 - 10 and F. Y. 2015 - 16 but it is not relevant because all the sale deeds executed in F. Y. 2009 - 10 were cancelled as per Arbitration Award dated 02.09.2015. 5. In reply, learned DR of the revenue supported the or....
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.... deeds executed in F. Y. 2009 - 10 for conveying 50 Acres of land at a value of Rs. 100 Crores are cancelled and the assessee was asked to execute fresh sale deeds for conveying 79 Acres 21.89 Guntas of Contiguous land as described in Schedule 'B' of the Award for a consideration of Rs. 150 Crores and in this manner, the account between the assessee vendor and buyer M/s Manipal University will be squared up. 7. First, we compare the description of various pieces of land transferred in F. Y. 2009 - 10 with various Pieces of land transferred in F. Y. 2015 - 16 and for this, we reproduce the details of that, which is as under:- A) Details of Four sale Deeds Executed in F. Y. 2009 - 10. 1) List of Total lands being part of Sale Deed dated 03.06.2009 :- S. No. Village Survey No. Area in Acres Area in Guntas Page No./Paper Book 1 Govindpura 7 3 2.00 58 2 Govindpura 8 3 6.00 3 Govindpura 10 3 26.00 Total 9 34.00 Total price is Rs. 19.70 Crores as per page 64 of the Paper Book. 2) List of Total lands being part of another Sale D....
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....ing part of Sale Deed dated 16.01.2016 :- S. No. Village Survey No. Area in Acres Area in Guntas Page No./Paper Book 1 Vasudev Pura 10 0 24.69 170 2 Vasudev Pura 12 0 32.05 3 Vasudev Pura 13 0 25.41 4 Vasudev Pura 14 0 21.85 5 Vasudev Pura 15/3 0 17.75 6 Vasudev Pura 16/3 0 15.01 7 Vasudev Pura 17/3 0 8.07 8 Vasudev Pura 18 0 1.27 9 Vasudev Pura 19 0 2.01 Total 0 148.11 Total Guntas converted in Acre 3 28.11 Sale Value is Rs. 6,98,82,710/- as per page 164 of paper Book. 3) List of Total lands being part of Sale Deed dated 31.03.2016:- S. No. Village Survey No. Area in Acres Area in Guntas Page No./Paper Book 1 Govindpura 4 3 25.50 188 2 Govindpura 5 6 6.00 3 Govindpura 14 6 4.00 4 Govindpura 16 6 18.00 5 Govindpura 17 27.00 To....
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....ase that any portion of land out of 190 Acres stated to be already owned by the assessee along with its nominees was acquired by any government authority and because of that, the assessee was unable to fulfil the balance requirements of agreement dated 01/06.2009. In our considered opinion, up to the date of Arbitration award, sale of 50 Acres of land completed in F. Y. 2009 - 10 was not disturbed in any manner and the present assessee was enjoying its fruits also in the form of Rs. 100 Crores received by it along with Rs. 50 Crores extra as advance for balance land and not refunded in spite of the claim of the buyer made in F. Y. 2009 - 10 itself. Be that as it may because this aspect that the assessee enjoyed the fruits is not going to impact our decision in the present case regarding this aspect as to whether the sale of 50 Acres land in F. Y. 2009 - 10 is taxable in A. Y. 2010 - 11 or not. 11. We concentrate on this request of the assessee that because of cancellation of Four sale Deeds executed in F. Y. 2009 - 10 as per Arbitration Award dated 02.09.2015, it should be held that no sale of land took place in F. Y. 2009 - 10 although all ingredients of sale being execution of....