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TMI Blog2016 (1) TMI 1305X X X X Extracts X X X X X X X X Extracts X X X X ..... r : "1. That the First Party agrees to the proposal mooted by the Second Party that they will provide the said land at rate of Rs. 60 lakhs per acre and the amount will include: * The cost of land i.e. payment made to land owners * Stamp duty and Registration charges * Document charges/Miscellaneous expenses * Development charges, CLU charges & incidental Expenses (@Rsl5 lakh per acres) * Forfeiture amount * Commission / brokerage for procurement of land * Service charges for getting permission @Rs 75000/ - per acres. 2. That the Second Party will establish the boundary once the Agreement to Sell has been entered into and will bear full responsibility till the registration and CLU of the said land takes place. 5. That the first party shall pay the stamp duty/registration expenses/Miscellaneous and same shall be deducted from the agreed price mentioned in the clause l or sale consideration. 6. The first party shall not be responsible for advances given for purchasing land on behalf of first party in case registration of land is not done or in case of forfeiture of advances. The amount of advances forfeited shall be borne by the second party or deducte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ol by the assessee and in this financial year, assessee had not paid any CLU charges and so, its claim of reducing CLU charges from sale proceeds was not correct. The Assessing Officer, accordingly, reduced the amount of Rs. 2,40,00,000/- from cost of acquisition. However, subsequently, a rectification order has been passed by the Assessing Officer, since the action of the Assessing Officer resulted into double disallowance of Rs. 2,40,00,000/-. 6. The assessee had also reduced an amount of Rs. 50 lacs from the sale consideration on account of advances given for acquisition of land to the following persons : i) Shri Nirmal Gurdev Rs. 20 lacs ii) Shri Sandeep Singla Rs. 10 lacs iii) Shri Prabhjit Singh Rs. 20 lacs Total Rs. 50 lacs 7. The Assessing Officer asked the assessee to explain the purpose for which the advances were given and to provide the agreements relating to these persons. The assessee had filed one agreement from which Assessing Officer noticed that this agreement related to purchase of property entirely different from the property in respect of which short term capital gain had been declared. The assessee's cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the assessee had incurred expenditure of Rs. 40 lacs and have refunded Rs. 2 Crores to Inscol, ld. CIT(Appeals) held that assessee had rightly claimed the deduction at Rs. 2,40,00,000/- out of total receipts from Inscol and Assessing Officer has wrongly disallowed this amount. This addition was accordingly, deleted. 12. After hearing rival submissions, we do not find any merit in this ground of appeal of the revenue. The ld. DR relied upon order of the Assessing Officer and contended that this amount was paid to the assessee, therefore, it was income of the assessee. The ld. counsel for the assessee, however, reiterated the submissions made before authorities below and submitted that assessee is a service provider and these expenses included in the value of the land. Copy of the MOU in reference has been filed. Copy of the letter from Director, Town & Country Planning, Haryana dated 03.11.2008 is also filed on record which shows that permission to setting up of an Integrated Healthcare Institute has been rejected. In view of the facts of the case and in the light of the MOU and the letter from Town & Country Planning, Haryana, it is clear that assessee was service provider to In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee on behalf of Inscol and all the details regarding who will make the payment for what, are mentioned in this MOU. Perusal of the balance sheet of Inscol reveals that it had purchased land inclusive of Stamp Duty and no stamp duty and registration charges was separately debited to the land account and so, it was evident that this amount is inclusive of stamp duty and registration charges. The assessee is a service provider who purchased the land on behalf of Inscol, therefore, the conditions mentioned in the MOU clearly shows that Assessing Officer was not justified in disallowing Stamp Duty and Registration Charges from the cost of acquisition. The ld. CIT(Appeals), accordingly, deleted both the additions. 15. After hearing rival submissions, we do not find any merit in this ground of appeal of the revenue. The ld. DR relied upon order of the Assessing Officer. The copy of the MOU is filed on record which shows that assessee would be entitled for the amount for sale of the land at fixed price which includes the cost of the land paid to the land owners and stamp duty and registration charges. Therefore, the general proposition adopted by the Assessing Officer would not be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee reiterated the submissions made before authorities below and submitted that MOU in question includes forfeiture amount and referred to Clause-I and 10 of the MOU, which is reproduced above as clause-I and 6. On the other hand, ld. DR relied upon order of the authorities below. 21. On consideration of the rival submissions, we do not find any justification to sustain the addition of Rs. 50 lacs. It is not in dispute that advances were given for acquisition of land to three persons in a sum of Rs. 50,00,000/-. It is also not in dispute that Inscol could not purchase the land from these land owners and the amounts were forfeited by the land owners. Inscol has debited the assessee's account as the assessee company was responsible for getting the registration done in the name of Inscol. The advance was given for purchase of land on behalf of Inscol and the total consideration received from Inscol has been considered as income. Clause-1 of the MOU in question clearly shows that assessee would be entitled for sale consideration at the fixed price which includes the cost of the land i.e. payment made to the land owners and forfeited amount. Clause-10 of the MOU also provides t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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