TaxTMI 
TaxTMI 
TaxTMI 
2023 (6) TMI 925
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....me Tax (Investigation) Unit-XI (3), Hyderabad, respectively in the premises of Janapriya Engineers Syndicate Ltd. and M/s S.P. Real Estate Developer (P) Ltd. on 19.02.2008, wherefrom a Developer Agreement-cum- GPA dated 21.09.2007 entered into with the Assessee by the said companies, was found and seized, according to which the Assessee-company was having a plot of land admeasuring 67824 sq. yards of land situated at Fateh Nagar, Hyderabad, which was purchased long back in 1965 and the Assessee had entered into Agreement cum-GPA dated 21.09.2007 with the above two concerns, according to which the Assessee agreed to receive the following amounts from M/s S.P. Real Estate Developers (P) Ltd. in lieu of transfer of the said land. S.No. Amount receivable towards Amount 1 Towards reimbursement of cost, charges & taxes incurred on the said land since date of purchase of said land of 67,824 sq. yards Rs. 13,50,00,000 2 Towards cost of site development, construction of boundary walls & for services like consultancy for technical financial and other administrative matters- Rs. 16,72,00,000 3 Towards cost of land of 67,824 sq. yards Rs. 28,36,525/- 3.1 The AO further obser....
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....mation received from DDIT (Inv.) Unit-11(3), Hyderabad, observed and held as under as under: "That the Assessee has sold the land as per agreement and in pursuance to which the aforesaid companies have taken possession of the land and commenced the construction activity which is going on in full swing. The legal notice issued by the Assessee has not reached its logical and in first round of litigation up to the Hon'ble Supreme Court and has not been able to get back the land. Court has also not given any stay on the construction activity, hence, the transfer of land of 67824 sq. yard which is in the possession of the developer on which the construction activity is going is treated to be completed during the FY 2007-08 relevant to AY 2008-09 i.e. the year under consideration. The copy of statement of the Managing Director of the above concerns as forwarded by DDIT (Inv.) Unit-11(3), Hyderabad also strengthen the view of the Revenue .................... " That in view of the above discussion, it is crystal clear that the transfer of the land took place during the year under consideration only. The land was originally purchased in the year 1965 so as to determine the LTCG the Fair....
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.... was intimated @ Rs. 60/- per sq. yard. The Assessee also claimed that during the assessment proceedings before AO, it had submitted a report dated 27.10.2010, wherein the Joint Sub-Registrar, Hyderabad (South) intimated the FMV of the land as on 01.04.1981 @ Rs. 150 per sq. yard. 5. The Ld. Commissioner in order to verify the said letter/report dated 20.11.2010 directed the AO to call for the report from DDIT (Inv.), Hyderabad and submit the remand report. 5.1 The AO in response, relied upon the aforesaid letter/report dated 20.11.2010 of the Joint Sub-Registrar for adopting the FMV at Rs. 60 per sq. yard for determining the capital gain and after calling information from Joint Sub- Registrar, Hyderabad (South) u/s 133(6) of the Act, vide letter dated 12.06.2019 informed that Jt. Sub Registrar stated that the market value of scheduled property at serial no. 74/P & 75/P situated at Borabhandha Fatehnagar, Ashok Marg, Hyderabad as on 01.04.1981 was Rs. 60 per sq. yard for commercial and Rs. 20 per sq. yard for residential, as per value register in its office. 6. The copy of the remand report was provided to the Assessee, who by filing rejoinder claimed that in the report dated 27....
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....d the enquiry to the Assessee and not examined the authenticity of the certificate furnished by the Assessee, he cannot use any enquiry or statement reported behind the back of the Assessee and no reference was made by the Assessee to the Valuation Officer under section 55A for ascertaining the FMV of the capital asset,. 7.1 The Ld. Commissioner ultimately on the aforesaid observations, determined the FMV of the land in question @ 150 per sq. yard in place of Rs. 60 as adopted by the AO, for working out the capital gain and resultantly sustained the addition to the tune of Rs. 23,04,03,464/- only, out of Rs. 28,25,77,386/-, which resulted into deletion of the addition of Rs. 5,21,73,922/-. 8. The Revenue Department being aggrieved also challenged the deletion of the addition 5,21,73,922/-and reducing the capital gain from Rs. 28,25,77,386/- to Rs. 23,04,03,464/-. The Ld. Departmental Representative (Ld. DR) at the outset claimed that the AO before adopting the FMV Value, thoroughly considered the peculiar facts and circumstances and the claim of the Assessee as well as the report of the Joint Sub-Registrar, Hyderabad (South), who vide letter dated 20.11.2010 intimated the Market ....
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...., as the Assessee agreed for consideration of the same as LTCG in the Appellate proceedings before the Ld. Commissioner. The Assessee only contested the ascertainment of the FMV, which was adopted by the AO @ Rs. 60 per sq. yard as per the report dated 20.11.2010 of the Joint Sub-Registrar, Hyderabad (South) who has intimated the FMV of the land @ Rs. 60 per sq. yard. The Assessee before the Ld. Commissioner not only contested the consideration of the report 20.11.2010 referred to above but also claimed that it has also during the assessment proceedings also submitted a report dated 27.10.2010 issued by the Joint Sub-Registrar, Hyderabad (South) wherein as on 01.04.1981, the FMV of the land under consideration was intimated @ Rs. 150 per sq. yard. 10.2 The Ld. Commissioner in order to ascertain the real picture and to resolve the controversy, not only forwarded to the AO, the report 27.10.2010 submitted by the Assessee during the assessment proceedings and relied upon in the Appellate Proceedings, but also called for the assessment records to examine the report dated 20.11.2010 of the Joint Sub-Registrar, Hyderabad (South) which was made a base for determining the FMV @ 60 per sq.....
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....he aforesaid amount of Rs. 15 Crores as the revenue receipt in its return of income and therefore, it is entitled to get deduction of such amount of Rs. 1,87,40,000/- while computing capital gains on the transfer of subject land under section 45 r.w.s 2(47) (v) of the Act. 12. The AO rejected the said disallowance/claim of the Assessee by holding as under: That the Assessee's submission that the amounts received from the developers represents service charges which is on a/c of services to be provided to the developers is not correct in view of the statements of the Directors of the developer company. Further, the Assessee has not submitted any documentary evidence so as to prove the nature of services being rendered by the Assessee to the above developers and further it is accepted by the Assessee company vide its letter dated 29.10.2010 the contents of which enumerated on page 11 of this order that the Assessee has neither incurred nor claimed any expenses in connection with the deal. Undoubtedly, the amount received represents part payment of the sale consideration of the land which is chargeable to tax under the head capital gain. Further, the Assessee claimed that the servic....
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....: Please furnish the details of the costs incurred by M/s ECE Industries Ltd. for the above project at Fathenagar, which are reimbursed by M/s. Janapriya Engineers Syndicate Ltd. Answer : No, we have not reimbursed any costs incurred by M/s ECE Industries Ltd, for the proposed project at Fathenagar. As per the Agreemnts , all approvals and all costs have to be incurred by M/s Janapriya Syndicate Ltd. There is no reimbursement of costs to M/s ECE Industries Ltd. 14.1 The Ld. DR further submitted that for computing the capital gain, only two kinds of expenditures are allowed to be deducted from the full value of sale consideration as prescribed in section 48 of the Act, but not otherwise. 15. On the contrary, the ld. AR claimed that the Assessee duly provided the consultancy services to the developer/aforesaid companies and therefore, raised the invoice dated 18.03.2018 to the tune of Rs. 16,87,40,000/- including Rs. 15 Crores as consultancy/advisory services rendered and Rs. 1,87,40,000/- as service tax on the above consultancy/advisory service @ 12.36%. Consequently the Assessee vide challan dated 26.03.2008 (pages no. 84 & 85 of Paper Book) deposited the said amount of Rs....