TMI Blog2014 (2) TMI 1064X X X X Extracts X X X X X X X X Extracts X X X X ..... pting 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the owners free of cost, i.e., by way of cost of the development rights, retaining the balance built-up area, being flats, for himself. Further, vide Clause 4 of the Agreement, the assessee was to give an interest-free deposit of Rs.15 lacs to the owners, as per the schedule specified, who would refund the same on delivery of the flats to them. The assessee subsequently, i.e., vide a tripartite agreement dated 08.08.2006, assigned the development rights under the principal agreement/s of 17.02.2006 to a partnership firm by name M/s.Shri Sachidhanand Developers (SD), also in the business of development of property, for a consideration of Rs.18 lacs. His return of income for the year, filed on 31.03.2009, however, disclosed a gain of only R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , be so in the instant case. Further, the assignment was per a registered document, the value of which for the purpose of stamp duty and registration, was again taken at Rs.18 lacs. The plea of the consideration having been wrongly mentioned therein was thus not acceptable. The assessee s explanation was accordingly rejected as an afterthought. Aggrieved, the assessee is in second appeal. 3.1 Before us, the ld. Authorized Representative (AR) would emphasize on the legal validity of the registered agreement dated 03.11.2009, which could not be dismissed as an afterthought, and is to be read along with the assignment deed itself, i.e., in modification/rectification thereof. The assignee had itself financed the interest-free refundable depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the consideration of Rs.18 lacs specified in the agreement dated 08.08.2006 (PB pgs.101-129), duly registered, is wrongly so specified, and is thus inclusive of the refundable deposit of Rs.15 lacs, or not so, which arises for adjudication, is to be determined on a conjoint reading of the different agreements and a consideration of the surrounding circumstances, nothing much turns on the parties being experts or qualified persons or, for that matter, the registration of the rectification agreement dated 03.11.2009, which stands admittedly entered into much after the transaction had been closed, and only when the assessee s return for the relevant year stood selected for being subject to the verification procedure under the Act and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly, has rightly returned his net income therefrom, i.e., subject to the adjustment of incidental expenses. We say so for more than one reason. The interest-free deposit, even as admitted by the ld. CIT(A), as paid up to the date of the assignment (Rs.6 lacs), was paid for or financed only by the assignee, SD. In fact, even the subsequent payments to the owners, i.e., for the balance Rs.9 lacs (all of which stand listed at par 5, pg. 5 of the impugned order), by the assessee to the owners, are only out of the moneys advanced to him by SD, duly reflecting the same as a receivable (by way of refundable deposit) in its accounts (PB pg. 139), which would only have been disclosed to the Revenue per its annual accounts, and for each of the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e lack of credibility of the rectification deed (which we endorse, stating our reasons for the same), despite clear findings corroborating the assessee s stand. All that the Revenue was, in our view, required to do to satisfy itself in the matter was to examine the veracity of the accounting entries made by SD in its regular books (PB pg.139). This is as why would it not otherwise claim Rs.18 lacs 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. A different treatment, as by way of reflecting Rs.15 lacs as a deposit account, only shows of its being a part of the sale consideration of Rs.18 lacs. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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