TMI Blog2017 (4) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee from such payment. It is also a matter of common knowledge that comparison can be made at all times with the like ones only. In the present case, there cannot be any comparison of shareholders-directors with the other tenants as the benefit accruing to the assessee from shareholders-directors is far more than the other tenants and they stand on different footing. We found that assessee has made payment to these two Directors. Since they were tenants holding tenancy right in respect of commercial shop and also holding possession of large area of land appurtenant thereto - behind the commercial shop, it was the sole and absolute responsibility of the indenting developers to settle with the tenants, provide the compensation to the tenants for vacating the premises. Since the amount was paid as a commercial consideration and nothing was brought on record by the AO to the effect that amount so paid was higher than the fair market value, the CIT(A) has deleted the same after recording detailed finding at para 1.5 of his appellate order. The finding so recorded by CIT(A) are as per material on record and do not require any interference on our part. - Decided against revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for temporary alternate accommodation and finally to provide permanent alternate accommodation at the entire cost and expenses of the developer and for that appellant has submitted the documentary evidence and further A.O. has erroneously come to the conclusion that each and every tenant were settled @ ₹ 2,50,000/- against the surrender of the tenancy right of the tenants in the present case - appellant has not incurred 1,71,19,700/ - to settle the 69 tenants but the said amount is nothing but work in progress - since, 1992-93 to 2006-07 and for that Ld. Counsel has submitted the details of work in progress and further Ld. Counsel has without prejudice produced the ready recknor for 2007 and estimated value also as per recknor comes to ₹ 74,52,000/- for the areas of 675 sq. ft. carpet and in the present case appellant has received only ₹ 68,00,000/- - and it is to settle this that the appellant has paid independently the said two tenants - each of them a sum of ₹ 68,00,000/- aggregating to ₹ 1,36,00,000/- and A.O. has deducted ₹ 2,50,000/- for each tenant and made the addition of ₹ 1,31,00,000/- without any basis and factual aspect. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 40A(2b) of the IT Act, accordingly, he disallowed the same. From the record, we found that the assessee is a Private Limited company and engaged in the business of buying and selling of immoveable properties, During the relevant Assessment Year, the assessee has debited the development expenses amounting to ₹ 3,06,87,851/ -. During the relevant Assessment Year, Mr. A.M. Lala and Mr. Z. M. Lala have surrendered the tenancy rights in their individual capacity in respect of the premises which they are holding in their individual capacity in favour of the assessee, Mr. A. M. Lala and Mr. Z. M. Lala are also Directors and share holders of the assessee company. As per the Development Control Regulations for Greater Bombay 33(7), the developers has to submit the consent of all tenants/ occupants to the Municipal Corporation of Greater Mumbai and/ or such other concerned authorities and on the basis of such consent, the approval will be granted by the Municipal Corporation of Greater Mumbai. Initially Mr. Z. M. Lala and Mr. A. M. Lala had given their consent to acquire the premises equivalent to 225 square feet instead of 675 square feet i.e. as per the rules and regulations of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ettled independently with the said two tenants and paid the sum of ₹ 68,00,000/- (Rupees Sixty Eight Lakhs Only) to each of the tenants. The list of the tenants are clearly mentioned in list of tenants being part and parcel of the Memorandum of Understanding dated 28.9.2001 and the learned Assessing Officer merely on plain reading of the formal consent, submitted by Mr. Z. M. Lala and accepted the area to the extent of 225 square feet, since simultaneously parallel understanding was also done by and between the tenants, who are occupying commercial premises and the assessee. as per the said Memorandum of Understanding, the permanent alternate accommodation is to be granted to the tenants by the Developers, which is more particularly mentioned in Clause No. 10 of the said Memorandum of Understanding. 6. We found that the assessee has paid compensation of ₹ 68,00,000/- each to two shareholders- directors for surrendering their tenancy rights. Both the directors were entitled to receive area of 675 square feet in the redeveloped property but instead opted for receiving area of 225 square feet. The AO has observed that the other 69 tenants were paid compensation of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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