TaxTMI 
TaxTMI 
2026 (9) TMI 773
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...., received a taxable benefit because an impounded, unregistered sale agreement between its seller, Mr. Prashanth K.V., and Ms. Jayamma and others showed the land's value as Rs.98,010,000. Relying on that agreement, the learned Assessing Officer added the differential amount under section 28(iv) of the Act. 3. The assessee is a company engaged in real estate development as a builder and developer. For the relevant assessment year, it filed its return of income on 3 September 2014, declaring total income of Rs.4,281,040. The return was selected for scrutiny, and a notice under section 143(2) of the Act was issued on 28 August 2015. 4. The assessee, engaged in real estate business, purchased land measuring 1 acre and 20 guntas in Sy. No. 139 at Channasandra Village, Bengaluru, for Rs.15,750,000. It also entered into joint development agreements with Mr. Prashanth K.V. and Mr. Chandariya. Under the agreement dated 6 April 2013, the assessee paid Mr. Prashanth K.V. an interest-free refundable security deposit of Rs.89,350,000. Under a second agreement dated 8 August 2013, it paid Rs.8,500,000 to Mr. Chandariya. 5. On 20 September 2016, a survey under section 133A of the Income-....
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....attorney dated 15 December 2012 in favour of Mr. Prashanth K.V., authorizing him to appear before the concerned authorities on their behalf. The assessee stated that Mr. Prashanth K.V. was required to pay Rs.87,500,000 to the claimants in addition to the agreed sale consideration of Rs.10,500,000 payable to Ms. Jayamma and Shri Viswanath, and that an unregistered agreement was prepared only to record those payments. Since Mr. Prashanth K.V. did not have sufficient funds, he approached the assessee, which advanced a refundable deposit of Rs.89,350,000. The assessee further stated that criminal proceedings concerning the property title were still pending and that the interest-free refundable deposit was made to secure a commercially viable business opportunity. In the alternative, it contended that, by advancing the deposit without interest in 2013, it had forgone interest for six years at the prevailing market rate of 18%, amounting to Rs.96,500,000. It therefore claimed that the effective cost of the land was Rs.116,000,000 and that no benefit had accrued to it. 8. The learned Assessing Officer rejected the assessee's explanation. He noted that the first agreement of sale dated ....
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....see, these unforeseen medical circumstances prevented timely preparation and filing of the appeal and supporting documents. It further stated that, once the director's health improved and the order of the learned CIT(A) came to its notice, it made sincere efforts to file the appeal at the earliest opportunity, though operational delays in collecting documents and reviewing the facts also contributed to the delay. The assessee submitted that the delay was unintentional and bona fide, relying on a medical certificate dated 5 July 2024 issued by Dr. Dilip Kumar of Helina Lifecare Hospital, and requested that the delay be condoned. The learned authorized representative, Shri Veeresh Budati, Chartered Accountant, reiterated these facts and submitted that the director's illness constituted sufficient cause for condoning the delay. 11. The learned Departmental Representative, Shri N.S. Sashidhara, opposed the request, arguing that the assessee had not shown sufficient cause for the delay in filing the appeal. He therefore submitted that the appeal should not be admitted and ought to be dismissed. 12. We have carefully considered the rival submissions. The appeal was filed with a del....
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....hara, CIT-DR, supported the orders of the lower authorities and submitted that the addition made by the Assessing Officer and confirmed by the learned CIT(A) should be upheld. He stated that Mr. Prashanth K.V. had purchased the land for Rs.98,010,000 and had already paid Rs.20,000,000, as confirmed by the seller in a statement recorded under section 131 of the Act. He further argued that the assessee's own computation valued the land at Rs.116,000,000 and that recording the same property at only Rs.15,750,000 showed the transaction to be camouflaged. He relied on the learned CIT(A)'s finding that the arrangement was structured to avoid tax. As to the assessee's reliance on the Hon'ble Supreme Court's decision in Mahindra and Mahindra Ltd., he submitted that the facts were distinguishable because that case concerned cessation of liability, the transaction was genuine, and no such doubt arose there. By contrast, the assessee here acquired land worth Rs.98,010,000 for only Rs.15,750,000 and thereby obtained a clear business benefit by paying substantially less than its value. He therefore submitted that section 28(iv) applied to the benefit arising from business or profession and, rel....
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.... consideration of only Rs.10,500,000. Considering the sale agreement value of Rs.98,010,000, the assessee's purchase price of Rs.15,750,000 for the same land, and the assessee's refundable deposit of Rs.89,350,000 to Mr. K.V. Prashanth, the learned Assessing Officer invoked section 28(iv) of the Act and taxed the differential amount of Rs.82,260,000 in the assessee company's hands. 19. On these facts, we find that the assessee, being engaged in real estate business, obtained a benefit in the course of its business by acquiring land valued at Rs.98,010,000 for a consideration of only Rs.15,750,000, resulting in a benefit of Rs.82,260,000. The benefit was admittedly not received in cash but in the form of land. We therefore find no infirmity in the orders of the lower authorities taxing Rs.82,260,000 in the hands of the assessee by invoking section 28(iv) of the Act. 20. The assessee's contention that it received no benefit or perquisite is without merit. The assessee acquired property valued at Rs.98,010,000 for consideration of only Rs.15,750,000. Its reliance on the Hon'ble Supreme Court's decision in Mahindra and Mahindra Ltd. (2018) 404 ITR 1 (SC) is misplaced, as that cas....