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2014 (8) TMI 1037 - AT - Income TaxDisallowance of expenses incurred as per an MOU towards development of property - Short Term Capital Gain (STCG) on the sale of Fursungi land at Pune - whether the claim of deduction for improvement of the land at Fursungi of ₹ 2,47,65,600/- which was restricted by the Ld. CIT(A) to ₹ 1,62,33,447/- for computation of Short Term Capital Gain is justified and directing the Assessing Officer to reduce ₹ 85,32,153/- from gross consideration as it was contractual liability on the assessee to do development of land as per MOU. - Held that:- Assessing Officer has not discussed the issue in detail but adopted shortcut by disallowing the entire claim of expenditure by writing 5-6 lines. We find that the Ld. CIT(A) has in detail dealt with the issue and also narrated the relevant facts. In this case nowhere it is disputed that the assessee has sold the lands to the DSKDL but the solitary controversy is in respect of contractual liability on the assessee for carrying out development works on the said land as those lands were agricultural land, whereby the said land would be compatible for the project of the DSKDL which was initially SEZ project. It is stated that subsequently the DSKDL decided not to go with the SEZ project but decided to go with the Special Township Project and hence, the assessee was requested to withhold the further development. The assessee has produced the details of the expenditure on the said land before the Ld. CIT(A) to the extent of ₹ 1,62,33,447/- which has not been controverted before us only argument of the Revenue is that the said expenditure is incurred by the assessee not during the assessment year. It is true that the said MOU was not registered but at the same time it is also not disputed that the said MOU executed on the non-judicial stamp paper of ₹ 100/- “copy placed at Page Nos. 46 to 52 of the Compilation”. We also find that the Ld. CIT(A) has given the categorical finding that there was contractual obligation on the assessee to do the development and hence, to the extent of ₹ 1,62,33,447/- which were spent by the assessee up to 24- 01-2011, the Ld. CIT(A) allowed the claim of deduction to the assessee. In respect of the balance amount of ₹ 85,32,153/-, the same was directed to be reduced from the sale consideration for the reason that the higher consideration offered by the buyer of the land i.e. DSKDL was subject to the terms of development of the infrastructure like roads, leveling and other improvements etc. After giving our anxious consideration to the entirety of the facts, we are of the opinion that no interference is called for in the order of the Ld. CIT(A) - Decided against revenue
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