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TaxTMI 
TaxTMI 
TaxTMI 
2021 (5) TMI 546
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..... Year Income or loss Returned Order u/s. Date of order Nature of additions 1 2007-08 Rs.(-) 3,88,81,784/- 143(3) 29.12.2009 Depreciation disallowed: Rs. 3,60,93,017/- 2 2007-08 143(3) r.w.s.263 18.11.2011 Income from other sources: Rs. 1,17,06,046/- 3 2008-09 Rs.(-) 5,09,79,421/- 143(3) r.w.s.147 18.11.2011 Income from other sources: Rs. 55,33,162/- 3. The Grounds of Appeal for both the years are identical, but for figures. The Grounds of Appeal taken from A.Y. 2007-08 are as under: 1) The order of the Assessing Officer is erroneous both on facts and in law. 2) The Assessing Officer erred in holding that the appellant has not commenced its business in spite of the fact that the Golf Course was ready during the previous year. 3) The Assessing Officer failed to appreciate the fact that the appellant has invested a sum of Rs. 64,69,40,0811- and kept ready the Golf Course for use and that receipt in such infrastructure project is not a criteria to hold commencement of business and thereby erred in holding that the business has not commenced. 4) The learne....
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.... and claimed a loss of Rs. 38,881,784/-. The Assessing Officer in his order of assessment has disallowed claim of deprecation of Rs. 3,68,93,017/- and determined loss of Rs. 2788761/-. This loss of Rs. 27,88, 761/- has been arrived at after taking into account income of interest from deposits being 1,11,39,164/-. It is to be noted that the assessee itself in the computation of income has claimed Rs. 1,11,39,164/- under the head 'income from other sources' and, hence, the applicability of the apex court judgment in 227 ITR 172 in the case of Tuticorin Alkalis chemicals has been rightly applied by the CIT in his order u/s.263. Hence, we confirm the order of the CIT passed u/s 263 and dismiss the assessee's appeal." 5. The basic facts pertaining to the issues are - a) There was a Collaboration Agreement between Andhra Pradesh Industrial Infrastructure Corporation (APIIC), a State Government undertaking of Andhra Pradesh, and M/s.Emaar Properties PJSC, Dubai, dated 19.08.2003, to develop an integrated project for development of sub-projects, namely, (i) An integrated Convention Centre Co....
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....sp; was stuck due to varied legal cases, the Golf Course was opened for public in later years. h) As per the lease deed dated 25.12.2005, clause 5.8, the lessee (M/s. Boulder Hills Leisure Pvt. Ltd.) is entitled to sublet the premises as under: "5.8. The Lessee shall be entitled during the Term to assign, sublease, licence, give on leave and licence, sublet or underlet the Demised Premises together with the structures thereon or any part or portion thereof, independent of the other portion or portions or any interest therein to separate parties and for this purpose APIIC shall assist the Lessee in demarcation of the portion or portions of the Demised Premises notwithstanding, the rent payable would be the specified % of the gross annual value generated by the golf course both by the lessee including its sub-lessee, licencees etc." I) There as an Assignment Deed dated 03.11.2006 between M/s. Boulder Hills Leisure Pvt. Ltd. (assignor) and M/s. Emaar MGF Land Pvt. Ltd., New Delhi (assignee). As per this deed, the assignee undertake to develop project of developing Golf Course and other facil....
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....on leasehold rights in favour of any financial institution/bank. Whereas the assignor cannot do so. n) As per clause 3.2.4, the assignee is entitled to further assign, sub-lease, license, give on leave and license, sublet the project land. o) The assessee receives yearly payment from M/s. Emaar MGF Land Pvt. Ltd., as under: 5% of gross annual revenue for the first 33 years 6% of gross annual revenue for the later 33 years Accordingly the assessee will receive 5% of the revenues whereas M/s. Emaar MGF Land Pvt. Ltd., will receive 95% of the revenues. p) The assessee received 5% of revenues of Rs. 13.21 lakhs during the F.Y. 2008-09 and M/s. Emaar MGF Land Pvt. Ltd., received total revenues of Rs. 2.64 crores out of which 5% of Rs. 13.21 lakhs was given to the assessee. 6. The appellant repeated the submissions made by him before the Assessing Officer which are summarized as under: a) That part of the project was completed before the land was assigned to M/s. Emaar MGF Land Pvt. Ltd. What was assigned to M/s. Emaar MGF&n....
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....Ltd., has practically substituted the appellant and acquired all the rights over the land. Further, as per this assignment deed, the details of property assigned is mentioned at annexure enclosed to the deed. As per this annexure, what was assigned to M/s. Emaar MGF Land Pvt. Ltd., was 235 acres of land, i.e., whatever is taken on lease from the Government (APIIC) was in turn assigned to M/s. Emaar MGF Land Pvt. Ltd. There is no mention of any constructed area or any other specifications in the Annexure to this Assignment Deed. Hence the appellant's plea that certain developments/works were carried out on the part of the land is not correct is not backed by any evidence. Further, as per clauses 2.3 (b) and 2.4.4 of this deed, on the date of agreement, 03.11.2006, even the statutory permissions for developing the land were not taken which clearly means that the development/construction had not started by November, 2006. In these circumstances, the appellant's claim that crores of work was completed and was put to us....
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....pt the sale deed in his favor, then he is liable to be taxed as owner. 7.6, In the instant case, M/s.Emaar MGF Land Pvt. Ltd., is the beneficial owner enjoying 95% of the revenues and has control over the assets, In fact during the appellate proceedings, the appellant was asked to submit the assessment order in the case of M/s.Emaar MGF Land Pvt. Ltd., to verify whether M/s.Emaar MGF Land Pvt. Ltd., claimed any depredation. However, the same was not submitted. The certificate given by the Project Consultant by name Davis Langdon and Seah, Bangalore, stating that Phase-I of the Golf Course was completed by October, 2006, is not backed by any evidence and is only self serving. On the other hand it is contradicting several clauses of assignment deed which reveal that project was not started even in November, 2006. 7.7. The appellant's claim that the depreciation should be allowed as the asset was ready to be used is also factually incorrect as evident from the Assignment Deed. The entire land of 235 acres was handed over&nb....