TaxTMI 
TaxTMI 
2022 (7) TMI 1308
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....ed as business expenditure of Rs. 4,48,69,595/- and Rs. 50,00,884/- for the assessment years 2008-09 and 2009-10 respectively, on the facts and circumstances of the case? 2. Whether the Tribunal was justified in law in holding that there was no nexus between the compensation paid by the appellant and the project under execution even when the assessing officer had accepted the claim of expenditure in the earlier assessment year 2007-08 on the facts and circumstances of the case? 3. Without prejudice, whether the Tribunal was justified in law in not holding that the compensation paid by the appellant for the cancellation of the agreement was business expenditure which is otherwise allowable as expenditure under Section 37(1) of the Act on....
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....y to develop land measuring about 5 acres and 29 guntas in Sy. No.1B consisting of eight blocks, which belonged to M/s. Sunrise Realty and Leisure Pvt. Ltd. Both these properties were in the same vicinity. Assessee entered into an MoU (Memorandum of Understanding) with M/s. Sunrise Realty, to purchase its land and paid an advance Sale consideration of Rs.One Crore. M/s. ITC Ltd., agreed to purchase the property belonging to M/s. Sunrise Realty. Assessee entered into an MoU dated June 16, 2005 with ITC agreeing to facilitate transfer of property belonging to M/s. Sunrise Realty. In the same MoU, ITC had agreed to award Development and construction Contract to the assessee. 5. Assessee approached Shri. Mahesh Bhoopathi for cancellation of th....
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....cres, assessee decided to cancel the JDA with Shri. Mahesh Bhopathi. He had initially, demanded Rs.8.5 Crores and finally agreed to receive Rs.6.7 Crores as compensation. * assessee had facilitated transfer of land belonging to Sunrise Realty in favour of ITC and Shri. Mahesh Bhoopathi's land in favour of Sunrise Realty. 9. In substance, Shri. Shankar submitted that assessee had taken decision to cancel the JDA with Shri. Mahesh Bhoopathi as the assessee got a better business opportunity and paid compensation to Shri. Mahesh Bhoopathi to get the agreement cancelled. 10. Opposing the appeal, Shri. K.V. Aravind submitted that: * The transactions between Sunrise Realty and ITC have no nexus with the payment of compensation to Shri. M....
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....t. The ITC had identified certain other immovable property to construction multi-storied residential complex. The relevant clause in the agreement reads as follows: "C. The Parties have been approached by ITC Limited ("ITC") for participation in a project involving the development of land and construction of a residential complex for their use. The Schedule Property being insufficient, ITC has identified certain other immovable property adjacent to the Schedule Property, for developing and constructing thereon a multistoried residential complex. ("Project");" 14. Under the Sale deed dated April 1, 2006, Sunrise Realty has sold 5 acres 27.4 guntas in favour of ITC. In the said Sale deed, assessee is first confirming party. On the same day....
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....inessman can be compelled to maximise its profit. The tax authorities must not look at the matter from their viewpoint but that of a prudent businessman. 18. Thus, what is required to be examined is, whether there was nexus between the compensation paid to Shri. Mahesh Bhoopathi and the construction agreement. The answer must be in the affirmative firstly, because, in para 3 of the JDA cancellation agreement, it is stated that M/s. ITC had approached the parties to the said cancellation agreement. Thus, assessee, Shri.Mahesh Bhoopathi and ITC were considering the proposal for construction of multi-storied residential Complex. Secondly because, in the Sale deed dated April 1, 2006 executed by Sunrise Realty, assessee is one of the co....