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TMI Blog2018 (12) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... ht and interest in the entire project and according to him, the assessee should have earned 14% of the entire sale consideration realized on sale of units rather than actual sale consideration realized. For this assessee has raised the following ground No. 1: - "1. The learned Commissioner of Income-tax (Appeals) erred in upholding the action of the learned Assessing Officer iii making an addition of a sum of Rs. 6662,620/- on the ground that the appellant is a co-owner of the project wherein it has 14% right and interest in the entire project and the appellant should have earned 14% of the entire sale consideration realized on sale of all units rather than actual sale consideration realized I by the appellant on the sale of units which Were allocated to the appellant in pursuance of Deed of Declaration dated 02/02/2008." 3. Briefly stated facts are that the assessee is carrying on the business of real estate & development/construction of property. The assessee undertook a project of construction of 13 storey building known as H&M towers, situated at Bandra West, Mumbai along with four other co-owners. The assessee is one of the joint developer and co-owner of this project havi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29.46 9.080989386 129.46 Total 9.080989386 7 Hemani V Gowani 111.54 9.080989386 111.54 Total 9.080989386 8. Hemani V Gowani 47.62 1.712.754512 47.62 9 Hemani V Gowani 129.46 9.080989386 129.46 Total 9.080989386 10 Arti Kothari 129.46 9.080989386 129.46 Total 0 11 Arti Kothari 129.46 16.56 129.46 Total 12 Arti Kothari 101.08 16.56 101.08 Total Total 1425.38 407.9061 418.71638 199.58719 199.587147 199.5832 % shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee's right/ interest is oniy to the extent of 14%, whereas the assessee has disclosed its share of consideration of receipts at 12.69% of the total consideration of the project. According to AO, assessee's actual share of consideration receivable from the project is Rs. 7,12,47,120/- as against the disclosed consideration at Rs. 6,45,84,500/-. Therefore, the difference of Rs. 66,62,620/- was added to the total income of the assessee. Aggrieved, assessee preferred the appeal before CIT(A). 8. The CIT(A) apart from confirming the action of the AO, directed the AO to exclude the profit of unsold unit from the income of the assessee for the current year but also directed to bring this income to tax in the hands of the assessee in the year in which these units are actually sold. For this the CIT(A) has observed at para 7.3 as under: - "7.3 I have gone through the assessment order and submissions made in this regard. It is seen that the company is one of the joint developer and co-owner of the project situated at Bandra, Mumbai, having 14% share in the project as a co-owner along with other co-owners which are as under: Sr. No. Name of co-owner percentage 1. Arti Deepak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds of appeal are partly allowed." Aggrieved, now assessee is in second appeal before Tribunal. 9. We have heard rival contentions and gone through the facts and circumstances of the case. We find from the facts of the case and the arguments of both the sides and material available on cash, records including assessee's paper book consisting of pages from 1 to 136. The facts are that the assessee has undertaken a project for consideration of building known as H&M Tower, Bandra West, Mumbai. The assessee has one of the co-owner of the joint developers of the building holding rights in the unit aggregating to 14%. The assessee entered into a Deed of Declaration dated 02/02/2008 wherein each co-owner has been allotted interest in the build-up area in proportion of their percentage of shareholding in the building to be constructed. It is a fact that the assessee has been allotted right and interest in certain unit/units aggregating to 14%. The details of co-owner's right and interest in the units are enclosed in assessee's paper book at pages 6 & 7 and we have also reproduced above in para 4 pages 3 & 4 of this order. 10. In view of the above, before us Ld Counsel filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to decide at which price, at which time or at which such other conditions it want to sell its allocated units and that would be relevant to determine its share of profit on sale of its units. The sale consideration realized by other co-owners cannot be taken into consideration to arrive at its profits on sale of units. We also asked the Ld Counsel for the assessee, whether the sale considerations realized by the other co- owners on sale of their allotted units have been included in computing their income he answered the same that might have been included but was not aware about the same. We find that the sale consideration realized during the current year is only Rs. 20,84,500/- but the AO has made the additions in respect of sales made during the earlier assessment years by the co-owners and such addition made by the AO amount to double taxation in the hands of co-owners in earlier years upon actual sales made by them and in the hands of the assessee in the current year without any basis and is unwarranted. 13. We are of the view that on actual basis none of the co-owner would share their income with the assessee as intended to be done by the AO. Accordingly, we are of the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year and bring this income to tax in the hands of the assessee in the year in which these units are actually sold to the extent 14% of his share. We have already adjudicated the issue that profit to the extent of actual profit on the share of sale of unsold unit relating to assessee only which are assigned as per deed of declaration dated 02.02.2008 can be taken into consideration. In case these flats are not relating to assessee no addition can be made. This direction of CIT(A) is accordingly modified. 17. The next issue in ITA No. 3613/Mum/2017 for AY 2011-12 of assessee's appeal is regarding double taxation raised by assessee vide following ground No.3: - "3. Without prejudice to what is stated above, the appellant submits that the addition made and upheld by the learned Commissioner of Income-tax (Appeals) results into double taxation of the same income in the hands of the appellant and respective co-owners." 18. We have already answered this issue while adjudicating the first ground and hence, we need not to adjudicate again. 19. Issues in ITA No. 3614/Mum/2017 for AY 2011-12 are identical to ITA No. 3613/Mum/2017. Respectfully following the same, we direct the AO to de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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