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TMI Blog2014 (12) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,53,88,155/- on account of sale consideration while determining the total income of the appellant. 2] The learned CIT(A) failed to appreciate that the sale consideration due to the appellant on account of sale of land to Sayaji Hotels was actually Rs. 15,51,12,845/- as against the amount of Rs. 17,05,01,000/- as mentioned wrongly in the registered sale deed with Sayaji Hotels and hence, the addition of Rs. 1,53,88,155/- on this account was not justified. 3] The learned CIT(A) erred in holding that the payment made by the appellant of Rs. 1,53,88,155/- was neither distribution of sale consideration by overriding title nor expenditure incurred for the purpose of the business and accordingly, the addition made by the learned A.O. was justified. 4] The learned CIT(A) erred in holding that the transaction entered into by the appellant for payment of Rs. 1,53,88,155/- was a make believe arrangement and not a genuine transaction and the only intention was to avoid tax liability. 5] The learned CIT(A) failed to appreciate that - a. In the registered Sale Deed of the land with Sayaji Hotels, there was an error in the inter se allocation of the sale proceeds amongst the various ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee was bogus." 4. Although, assessee has raised multiple Grounds of Appeal but essentially the grievance is with respect to two issues, firstly, with regard to an addition of Rs. 1,53,88,155/- made by the income-tax authorities on account of undisclosed sale consideration; and, secondly with regard to a disallowance of Rs. 1,05,00,000/- made by the income-tax authorities on account of a nonexisting liability. 5. In so far as the addition of Rs. 1,53,88,155/- is concerned, the relevant facts are as follows. The assessee along with other co-owners sold a land at Survey Nos.135 & 136 Wakad, Pune, to M/s Sayaji Hotels for a total consideration of Rs. 21,88,01,000/- vide registered sale-deed dated 10.08.2006. In terms of the said agreement, assessee received consideration of Rs. 17,05,01,000/- whereas in the return of income filed by the assessee for assessment year under consideration he disclosed a consideration of Rs. 15,51,12,845/-. The Assessing Officer show-caused the assessee to justify the differential in the consideration accruing to the assessee in terms of the registered sale-deed dated 10.08.2006 and the amount disclosed in the return of income. In response, assessee furni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is appeal before us. 6. Before us, the Ld. Representative for the assessee has vehemently argued that the lower authorities were not justified in rejecting the plea of the assessee to adopt the consideration accruing to the assessee on the basis of MOUs entered amongst the co-owners, which was prior to the date of the registered sale agreement. It has been submitted that the terms and conditions of the MOUs, copies of which have been placed in the Paper Book, suggest that some of the persons, namely, Lata Manoj Shah and Jayshree Kailas Wani have made extra efforts in purchasing and selling the said land and therefore they have been compensated for such extra services by giving them higher share in the sale price. The point made out by the assessee is that the terms and conditions of the MOU are to be taken as diversion of income by overriding title qua the terms of distribution of sale proceeds recorded in the subsequently executed registered sale agreement. 7. On the other hand, the Ld. Departmental Representative appearing for the Revenue has relied upon the reasoning taken by the lower authorities, which we have already adverted to in the earlier paras and the same is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies is that the MOUs have been found to be unreliable. There is no material or evidence on record for us to distract from the aforesaid finding of the lower authorities. Therefore, the alternative plea of the assessee is also rejected. 11. Another issue in the appeal of the assessee relates to a disallowance of Rs. 1,05,00,000/- made by the Assessing Officer on account of a non-existing liability. The relevant facts in this regard are that the Assessing Officer noted that while arriving at the profit from the purchase and sale of land at Wakad, assessee had claimed an expenditure of Rs. 2,25,00,000/- representing payments made to M/s Manav Developers. The said expenditure was explained by the assessee as compensation paid to M/s Manav Promoters Pvt. Ltd. as the assessee had earlier entered into an understanding with the said party to sell the Wakad land to the said party. Assessee explained that subsequent to the contract with M/s Manav Promoters Pvt. Ltd., assessee and the other co-owners obtained a better price for the Wakad land and it was sold to M/s Sayaji Hotels; and, therefore the agreement with M/s Manav Promoters Pvt. Ltd. was cancelled with solatium payment of Rs. 2.25 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Manav Developers for having cancelled the earlier contracted agreement. The Ld. Representative explained that it was only during the course of assessment proceedings that assessee came to know of the non-existence of such liability and that rightly speaking, the said amount could not be disallowed while assessing the income for the instant year but it should be assessed as income for the previous year relevant to the assessment year 2010-11. The Ld. Representative pointed out that even before the Assessing Officer, assessee has raised such a plea and the same has been unjustly rejected. 13. On the other hand, the Ld. Departmental Representative appearing for the Revenue has justified the orders of the authorities below on this aspect by placing reliance thereon. 14. We have carefully considered the rival submissions. In our considered opinion, the alternative plea setup by the assessee to the effect that the amount of Rs. 1,05,00,000/- is be assessed to tax in assessment year 2010-11 is not justified. In the present case, the verification exercise carried out by the Assessing Officer, which is not disputed by the assessee, revealed that there was no legally enforceable liability ..... X X X X Extracts X X X X X X X X Extracts X X X X
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