TaxTMI 
TaxTMI 
TaxTMI 
2019 (10) TMI 1571
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....03.2015 under section 143(3) of the Income Tax Act, 1961 (hereinafter 'the Act'). 2. The only issue in this appeal of assessee is against the order of CIT(A) upholding the addition of Rs. 6,51,41,621/- made by the AO holding that the entire amount of Rs. 8.51 crores were received during the relevant assessment year and also holding that proportionate land cost of free hold area was Rs. 1,99,58,379/- ignoring the calculation error pointed out in the rectification petition. For this assessee has raised the following ground NO. 1 to 6 as under : - "1. Because, the Ld. CIT(A) has erred in law and on facts in upholding the addition of Rs. 6,5141,621/- made in the assessment order. 2. Because, the Ld. CIT(A) has erred in law and on facts in ....
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....e at Rs. Nil. The AO during the course of assessment proceedings noted that the assessee company has received a consideration of Rs. 8.51 crores in lieu of development of agreement entered with M/s Raajyam Realty LLP (RRL) for transfer of development rights in the land but the same was not credited as sale proceeds to P & L Account. The AO further noted that in lieu of the entire transactions, the assessee has actually earned profit from transfer of development rights at Rs. 6,51,41,621/-. Aggrieved against the assessment order, assessee preferred the appeal before CIT(A). The CIT(A) confirmed the action of the AO vide Para 4.2 of his order as under: - "4.2 The assessee company held rights in the piece of land at village Kale Kalyan, Talu....
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....e area. The construction and sale of free land building would be based on the successful completion of the Slum project i.e. the rehab building. The following date event chart may be referred to - Date Event 24.04.2009 Revised letter of intent from SRA granting 2.910 FSI 28.07.2009 Obtained commencement certificate from SRA 24.06.2009 Agreement between M/s Prabhav Properties and M/s Raajyam Realty LLp. 02.01.2012 Intimation of approval issued by SRA 04.06.2012 Obtained occupancy permission for part project from SRA 10.10.2012 Obtained commencement certificate for free sale area 22.03.2013 ROI for AY 2012-13 filed declaring nil gross total income (all expenditure relating to SRA project debited to WIP. I have considered th....
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.... transaction and the taxability thereof. I wish to also point out here that the assessee has raised an objection that the AO has incorrectly considered the consideration of Rs. 8.51 crores instead of Rs. 8.50 crores: I have perused the development agreement and noted that the consideration agreed between the parties was Rs. 8.S1 crores and not Rs. 8.50 crores. Accordingly, the AO has correctly considered the transfer consideration to be Rs. 8.51 crores. Now, coming back to the taxability of the rights transferred tinder the development agreement, as the land was held as stock in trade by the assessee, the consideration of Rs. 85 I crores is being treated as the sales price. The question under appeal is also the cost to be considered t....
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....w taken by the AO that the assessee has transferred the development rights for Rs. 8,51,00,000 and the proportionate cost of the free hold land is Rs. 1,99,58,379/- should be reduced thereby holding the net income of Rs. 6,51,41,621 be considered as taxable income. In the result, the assessee's ground of appeal is dismissed." Aggrieved, assessee is in second appeal before Tribunal. 4. Before us, the assessee Counsel only made contention that the assessee is following project completion method and he filed a statement of Vakola project details which read as under: - PRABHAV PROPERTIES PRIVATE LIMIT VAKOLA PROJECT DETAILED Opening Balance as on 01.04.2008 67,04,944.24 Add: Expense during FY 2008-09 55,64,018.58 Add: Ex....
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.... Honourable Bench, please find enclosed a statement showing the projected details of the Vakola Project upto 31st March, 2019. It is expected, as mentioned during the course of hearing that the project would be completed within six months, that is, during the financial year ended 31st March 2020. Further, on perusal of the aforesaid statement, it can be seen that upon completion, the project is expected to make a profit of approximately Rs. 10.40 crores, which will be included in the computation of total income for income-tax assessment year 202021 in as much as our clients are following the project completion method for calculating their area where the project is being developed. This is the minimum profit that our clients expect though ....