TMI Blog2014 (3) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... he sale deed recorded the sale consideration of Rs. 7.35 Crorse - There was no material to suggest that any sale consideration in excess of the said amount was actually paid - the CIT (A) as well as the Tribunal both have considered the development and limited use of land to the purchaser - Fifty per cent of the land was likely to be reserved - The AO did not have any other evidence barring the MOU to controvert such evidence - CIT (A) as well as the Tribunal relied on the valuation report of the registered valuer - Without any further evidence, the Assessing Officer could not have substituted such amount - Decided against Revenue. - Tax Appeal No. 69 of 2014 - - - Dated:- 24-2-2014 - Akil Kureshi And Sonia Gokani,JJ. For the Appellant : Mr. Nitin K. Mehta, Advocate For the Respondent : Mrs. Swati Soparkar, Advocate ORDER (Per : Honourable Mr. Justice Akil Kureshi) Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal, Ahmedabad { Tribunal for short} dated 17th May 2013, raising following questions for our consideration : { A} Whether, in the facts and circumstances of the case, ITAT has erred in law in confirming the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of partnership and not for sale or purchase of the land, negotiations were held out between the parties and ultimately reduced price was agreed to be paid. It was pointed out that a supplementary deed was also signed on 18th January 2007 in which it was agreed that if the reservation problem for green belt is resolved and the purchaser gets the use of full land being sold, the seller would receive the remaining price, as indicated in the MOU. CIT [A] as well as the Tribunal accepted the stand of the assessee. The Tribunal, while confirming the order of CIT [A], held and observed as under : 3.8 We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below. We find that the case of the A.O is this that as per the MOU between the assessee and Smt. Chetnaben M. Patel dated 23.09.2006, it is stated at various places in clause 1, 2, etc., that the assessee is selling this land in question to Smt. Chetnaben M. Patel for a consideration of Rs. 1471.36 lacs. In para 7 of the same MOU, it is noted that for the purpose of developing the land in question, a new partnership firm is tobe formed jointly by the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsibilities of the said land due to T.P Scheme shall rest upon the new partnership firm. 3.9 From the above para of the MOU, it is seen that even the expenditure towards land price as well as construction to be put up upon the said land is to be borne by both the parties ie., assessee as well as the party of other part in the ratio of 50 : 50 each. It is also agreed that the profit will be distributed between these two parties in the ratio of 45% to the assessee and 55% to M/s. Savvy Infrastructure Company Limited. This clause of the agreement in the MOU to get only 45% profit although the cost to be borne in the ratio of 50% by the assessee, it is possible that the price of the land agreed to by the other party was possibly higher figure for any purpose not disclosed in the MOU but to compensate the assessee for, lesser amount of profit percentage being given to the assessee in the profits of the project. In view of these clauses of this MOU, as discussed above, we find force in these contentions of the learned AR that this MOU is not a sale simplicitor of the land in question but the same is mainly towards contribution as capital to the new partnership firm by the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of learned CIT (A) as per para 7.3 of his order and the same is reproduced below for the sake of ready reference : 7.3 The Assessing Officer has stated that the first document being Memorandum of Understanding, fixes the price at Rs. 14,71,36,000/= and payment of Rs. 21 lakh was made to the assessee by way of cheque by Savvy Infrastructure Limited. He has further stated that the second document being unsigned banakhat between the assessee and Chetnaben Mukeshbhai Patel, promoter of Savvy Cooperative Housing Society is for Rs. 14,71,36,000/=. This figures are changed to Rs. 7,36,20,750/= . He has therefore presumed that the sale consideration was of Rs. 14,71 Crores and not of Rs. 7.36 Crores. He has considered the differential amount as payment in cash. However, on perusal of the submissions of the appellant and the details furnished, it is found that first document being MOU cannot be the basis as it has not resulted into final transaction between the parties of MOU. Second document relied upon by Assessing Officer is unsigned and hence, it cannot be the basis for conclusion reached by Assessing Officer. As such, based on both these documents, no presumption about pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed CIT (A) on this issue. This ground is rejected. From the above it can be seen that the entire issue is based on evidence on record, duly considered by CIT [A] as well as the Tribunal to come to a concurrent factual finding. Significant facts were though advanced, such MOU did reflect the sale price of Rs. 14.71 Crores, nevertheless, the agreement to sale as well as the sale deed recorded the sale consideration of Rs. 7.35 Crorse. There was no material to suggest that any sale consideration in excess of the said amount was actually paid. As pointed out by the assessee, the search was carried out only eleven days after the sale and no cash was recovered. More importantly, the CIT [A] as well as the Tribunal both have considered the development and limited use of land to the purchaser. Fifty per cent of the land was likely to be reserved. It was, therefore that the seller agreed to receive reduced rate. Simultaneously, another deed was signed indicating that if by some chance, use of full area of land is available to the purchaser, the entire amount indicated in the MOU would be paid. The Assessing Officer did not have any other evidence barring the MOU to controvert such evide ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
