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2018 (12) TMI 910 - ITAT MUMBAIAllocation of sale consideration - co-owner's right and interest in the units - assessee has shown less income on sale of units allotted which are at lower floors compared to sale consideration of upper floors - assessee having rights of 14% in total project - Held that:- As per Deed of Declaration dated 02/02/2008, the share of each co-owner in each unit is pre-decided mutually and agreed by all and same will determine profitability on sale of such units. The very basis adopted by the AO is without any basis and also not practical. One co-owner may be willing to sell the unit at available price whereas the other would be willing to hold on to get a better price and that is dependent on the risk appetite of the seller and their financial stability to negotiate the deal. This could result into conflicts between the co-owners. To avoid the same and to have ease in sale of units and its procedures on sale, all co-owners decided mutually to allocate units within themselves in such a manner that each would receive their proportion of share in the total build up area and have complete authority to decide the sale of units allocated to them, the price and the time etc. As find from the facts of the case that assessee had sold unit no.2 and 4 for a total sale consideration of ₹ 4,50,00,000/- and ₹ 4,05,00,000/- respectively during the financial year 2008-09 i.e. relevant to assessment year 2009-10. The assessment for assessment year 2009-10 was completed and the returned income of the assessee has been accepted by the department. Hence, we delete the addition made by AO and confirmed by CIT(A). This issue of assessee’s appeal is allowed. AO directing the AO to make addition of 14% share in the unsold units in the income of the assessee in the year in which such unit is actually sold - Held that:- Confirming the action of the AO in directing the AO to make addition of 14% share in the unsold units in the income of the assessee in the year in which such unit is actually sold.
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