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TMI Blog2015 (4) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... either examined by the Assessing Officer nor was before Commissioner of Income Tax? (b) Whether on the facts and in the circumstances of the case and in law, the Tribunal was correct in interpreting clause 7 of the AOP agreement dated 24th March, 2003 with respect to the method of allocation of revenue between member of AOP? (c) Whether on the facts and in the circumstances of the case and in law, the Tribunal was correct in accepting the calculation of eligible quantum of deduction under section 80IB(10) of the Act? (d) Whether on the facts and in the circumstances of the case and in law, the Tribunal was correct in allowing deduction u/s. 80IB(10) of the Act on the share of M/s. Sanand Properties Pvt. Ltd. (one of the member of AOP) in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce with clause (7) of the AOP agreement, SPPL was to receive 35% of the sale proceeds of the project and out of the balance 65%, all the expenditure of the AOP was to be met, after which the net balance constituted the share of income of RRK. 5. The notice under section 263 specified that the manner of allocation of revenue provided the Assessee with undue benefit by way of a higher claim of deduction under section 80IB(10) contrary to clause (7) of the AOP agreement. It was contended that the share of Revenue pertaining SPPL was not eligible for deduction under section 80IB(10). 6. After considering the written submissions of the Assessee and other material on record, the CIT (Appeals) set aside the assessment order and directed the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly withdraw its share of revenue/income as worked out herein above from time to time." 8. After considering this clause, the Tribunal proceeded to reproduce the working of the profit and distribution between the two members of the AOP. The Tribunal, then, proceeded to consider the fact that the main case of the Assessee was that the Commissioner of Income Tax (Appeals) is factually wrong in stating that the account of the Assessee has not been prepared in accordance with clause (7) of the agreement. The clause (7) of the agreement as well as the manner in which the Assessee has distributed the revenue are already reproduced in the order and according to the Tribunal, a plain reading of clause (7) would reveal that out of the amount receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On the issue of merger, the Tribunal held that the power under section 263 has been incorrectly invoked. The assessment order passed by the Assessing Officer was neither erroneous nor prejudicial to the interest of the Revenue. The impugned order of the Commissioner of Income Tax was, therefore, quashed and set aside by the Tribunal. 11. This Court in Income Tax Appeal No.1027/2013, The Commissioner of Income Tax (Appeals) V/s. K. Sera Sera Productions Limited (see order dated 18th March, 2015) had occasion to consider a similar set of facts where section 263 and the issue of merger were invoked. In that case, the Assessee had sold its share of theatrical rights to one M/s. RGV Enterprises for Rs. 25 lakhs and on the showing of the Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant and Mr. Mistri, the learned Senior Counsel, appearing for the Respondent at a considerable length. Mr. Malhotra submitted that the interpretation placed by the Assessing Officer and computing total income of Rs. 14,63,04,860/- was correct. He further submitted that disallowance of deduction claimed under section 80IB(10) was justifiable and considered that the Respondent shall not entitled to claim benefits of said section 80IB(10) on account of the manner in which clause 7 of the AOP agreement has been worded. According to him, the manner in which the AOP agreement was worded by the Assessee, disentitled the Assessee to claim benefit of section 80IB(10). Mr. Mistri, on the other hand, faulted the reasoning of the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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