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2014 (2) TMI 1064 - AT - Income TaxComputation of LTCG - Addition made on Interest free deposits given to the owners - assignment of development agreement to the firm – Whether the consideration of Rs.18 lacs specified in the agreement is inclusive of the refundable deposit of Rs.15 lacs or not – Held that:- The assessee was entitled to a consideration of Rs. 3 lacs only on assignment has rightly returned his net income is subject to the adjustment of incidental expenses - The interest-free deposit as paid up to the date of the assignment was paid for or financed only by the assignee - The CIT(A), while accepting that the assessee did not make any investment in the project, which had not even commenced as on the date of the assignment, and was only a middle man, yet continues to be guided by the lack of credibility of the rectification deed despite clear findings corroborating the assessee’s stand - the agreed consideration in its books, being admissible as expenditure toward work-in-progress (WIP). This would at once satisfy or quell its doubts with reference to an external evidence - The inference of an after-thought is inconsistent with and not borne out of the material on record, as well as the conduct of the parties even prior to the execution of the rectification deed, including the returning of the income itself on the transaction by the assessee - The same would matches with the net of the other sums received up to the last rupee, and at variance with the rectification deed itself - the assessee’s claim of the stated consideration of Rs.18 lacs under the assignment deed is inclusive of Rs.15 lacs to be paid to the owners by way of a refundable deposit is correct – thus, it is rightly deducted in computing the capital gain arising – Decided in favour of Assessee.
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