TaxTMI 
TaxTMI 
2021 (5) TMI 546
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.....Y.2007-08 and 2008-09 are as under: Sl. No. Asst. 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 h....
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....t page 17 of the paper book, the assessee in his return of income has claimed loss from business at Rs. 50,020,948/- and has set off the other income of Rs. 11,139,164/- under the head income from other sources 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 under....
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.... or a plot in Housing and Commercial Complex to he developed by M/s. Boulder Hills Leisure Pvt. Ltd., which is one of the three projects mentioned above. The Golf Course was not meant for general public as per the original understanding. However, since the project of Housing and Commercial facilities 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 l....
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....3) years or any mutually agreed extension period in writing between the Parties." I) As per the Assignment Deed clause 3.1.3, during the assignment period all building materials, other materials in the project land shall be considered the property of the assignee. m) As per clause 3.2.2, the assignee can create any charge 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., rece....
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....per this deed, the appellant was supposed to develop a Golf Course alongwith a club on 235 acres of land leased by APIIC. On 03.11.2006 this land was assigned to M/s. Emaar MGF Land Pvt. Ltd.,. vide Assignment Deed dated 03.11.2006. The important clauses of this agreement are mentioned at 5 (j). As per these clauses, it is evident that leasehold rights of the appellant on the land were transferred to M/s. Emaar MGF Land Pvt. Ltd., for a period of 66 years and M/s. Emaar MGF Land Pvt, 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 ....
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....upreme Court judgment in R.B.Jodha Mai Kuthiala vs, CIT (1971) 82 ITR 570, held that the real test for depreciation was whether the assessee was entitled to property income and hence the owner should have, been the person who could exercise the rights of the owner in his own right, not on behalf of registered owner. In Smt. Kalarani vs. CIT (1981) 130 ITR 321 (P&H) it was held that if, in a given case it is found as a fact that the assessee is in occupation of the building for all intents and purposes except 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, ....
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....haying any leasehold rights on assets; c) The assets were not used in the business; d) Further, the income from other sources from Profit and Loss Account for A.Y. 2007-08 is Rs. 1,17,60,046/- and for A.Y. 2008-09 is Rs. 55,33,162/- which is correctly brought to tax by the Assessing Officer. 8. In the result, all the Grounds of Appeal for both the assessment years stand dismissed. 3. Learned authorised representative vehemently contended during the course of hearing that both the lower authorities have erred in law and on facts in treating the assessee as not eligible for the impugned depreciation claim pertaining to the corresponding fixed assets i.e., golf course in AYs.2007-08 and 2008-09. He further clarified that the assessee's appeal ITTA No.515/2012 raising the very issue against the tribunal's first round order in Section 263 proceedings holding to the contrary; is pending before the hon'ble jurisdictional high court and therefore, both these appeals deserve to be adjourned sine die so as to await final adjudication thereof. Mr.Raghuram lastly contended that the facts of the latter AY.2008-09 before us stand on a dif....