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2015 (3) TMI 362 - ITAT PUNEDisallowance payment made for surrendering rights in the lands - Acquisition of cost of right of land - Compensation payment - Held that:- In this case, the assessee is engaged in the aggregation of land. As per the modus operandi of the assessee, she hunts big chunk of land to sale the same to the big builders or corporate groups. Accordingly, she identified the land in Navlakumbhare and entered into MOU with the representatives of the farmers as well as land owners.It is seen that as per the said agreement/MOU the assessee agreed to pay the compensation of ₹ 25,25,000/- per acre if the farmers or their representatives agreed to consolidate and make available the land to the extent of 110 acres and ₹ 25,50,000/- per acre if it is more than 111 acres. On perusal of the said agreement it is seen that the total land area was contemplated to extend of 180 acres. We have examined the original agreement with the copy obtained from the Assessing Officer, Mumbai and prima-facie we agree that there is no tampering in the copy of agreement produced by the assessee after comparing copy of MOU obtained from the Assessing Officer, Mumbai. The law is also well settled that whatever an inference is drawn while deciding rights or liabilities of any person, it should be based on some evidence and not merely on presumptions and doubts. So far as M/s. Aanchal Properties Pvt. Ltd. is concerned the only reservation of the Assessing Officer is that the said company was not impleaded as a consenting party. In our opinion as the said company has not made any changes in the Revenue record after entering into agreement with the farmers, there was no necessity to implead said company as a consenting party. Same way so far as M/s. New Planet Trading Co. Pvt. Ltd. is concerned also there was no change in the Revenue record and hence there was no necessity to implead said company as a consenting party. We, accordingly, hold that in the case of M/s. Aanchal Properties Pvt. Ltd. the amount of compensation paid by the assessee to the said company is allowable expenditure in respect of M/s. New Planet Trading Co. Pvt. Ltd., we hold that so far as both the authorities below have not at all referred the documents to any expert for finding out whether any tampering is done by the assessee or M/s. New Planet Trading Co. Pvt. Ltd., entire inference and conclusion is based on only presumption and hence the same is erroneous.We, accordingly, hold that the conclusion drawn by both the authorities below is only on the presumption that there is a forgery or tampering in the contents of the MOU by the assessee. We, accordingly, allow the claim of the assessee at entirety. In the result, the grounds taken by the assessee are allowed on the issue of compensation paid to M/s. New Planet Trading Co. Pvt. Ltd. and M/s. Aanchal Properties Pvt. Ltd. and grounds taken by the Revenue are dismissed. - Decided in favour of assessee. Payment made to M/s. Otswal Trading Co. Pvt. Ltd. - We find that the said company entered into agreement with the farmers (copy placed in the Compilation in Marathi). We also find entire payment is rooted through the banking channel. The Assessing Officer himself admitted in the assessment order all three companies are independent companies and the assessee is not at all related to any of the companies. The only reason given by the Assessing Officer for making the disallowance in respect of compensation paid to the said company, it is not impleaded as a party in the final sale deed. We have already noted in the A.Y. 2008- 09 that unless there is a variation in the Revenue’s record then only for protecting the interest of the buyer, the entity which names in the revenue records appear is normally impleaded. After giving our anxious consideration to the evidence before us and considering the doubt raised by the Assessing Officer for making the disallowance, in our opinion the Assessing Officer was not justified disallowing the said expenditure. - Decided in favour of assessee. Additional compensation paid to the farmers - CIT(A) sustained the disallowance to the extent of 50% of the said amount - Held that:- As per the MOU dated 30-06-2007 with the farmers there is a provisions by way of Clause 4 and timely completion of deal was the important condition and if the deal was not completed in time then the farmers were given the rights to demand additional compensation. Even if the specific amount of additional compensation is not mentioned but there was a ceiling that it should not be more than ₹ 2 Lakhs per acre. The Ld. CIT(A) has restricted the provisions to 50%. We, therefore, hold that the provisions made by the assessee cannot be said to be contingent in nature as it is as per agreed terms of contract between the assessee and the farmers. At the same time we concur with the finding of the Ld. CIT(A) that the provision is excessive and no details are filed. We do not consider to interfere in the relief given by the Ld. CIT(A) by holding that the reasonable provision is to the extent of ₹ 90 Lakhs. In respect of addition sustained by the Ld. CIT(A) of ₹ 90 Lakhs, we consider it fit to remit this issue to the file of the Assessing Officer to decide whether the balance additional compensation of ₹ 90 Lakhs provided by the assessee is excessive - Decided in favour of assessee for statistical purposes. Development expenses disallowed - Held that:- We have to examine any claim of expenditure in the back drop of the commercial expediency. In this case the assessee is engaged in the aggregation of land and she has to deal with the many farmers and local villagers. It is not uncommon that even a single villager or farmers can create trouble for aggregation of land. The assessee has also produced the photographs in the Compilation. It is also notice that the assessee made the payment through the banking channel. In our opinion the expenditure of the assessee is towards the commercial expediency as maintaining the good relations of the villagers is also very much important in the process of aggregation of the land. Now, the next issue is whether the entire claim is allowable. The assesse has not produced the relevant record before us. We, therefore, of the opinion that if the expenditure of ₹ 15 Lacs is allowed that will meet the ends of the justice. We, accordingly, allow ₹ 15 Lacs out of ₹ 22,00,056/-. - Decided partly in favour of assessee.
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