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TMI Blog2023 (11) TMI 1064X X X X Extracts X X X X X X X X Extracts X X X X ..... s of accounts and compute the tax liability accordingly. Merely by entering into the private arrangement by virtue of agreement, substantive provisions of law cannot be forfeited. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 16,10,237/- regarding sale of land measuring 370 sq. yd. on the basis that M/s. Parsvnath Developers Ltd. has real rights on the land, whereas, M/s. Time Bound Contracts Ltd. is only the register owner of the land. 2. In so far as ground no.1 is concerned, briefly, the facts are, the assessee is a resident corporate entity stated to be engaged in the business of purchase of land, immoveable property and to undertake development and construction of real estate projects. For the assessment year under dispute, assessee filed its return of income on 30.09.2013 declaring loss of Rs. 51,287. 3. In course of assessment proceedings, while examining the audited financial statement of the assessee, the Assessing Officer noted that assessee has not offered any revenue from business operation. He further observed that the opening Work in Progress (WIP) amounting to Rs. 1,46,43,770 as on 01.04. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d party and the assessee has a transaction by way of transfer of land. He further alleged that assessee has not complied with the requirements of AS-18 prescribed by Institute of Chartered Accountants of India with regard to related period disclosure. He observed that according to the inventory of WIP, subject land was measuring 44 bighas 61 biswas. He observed that Parsvnath Associated Private Ltd. is holding 50% share in the assessee company and controlling the affairs of the assessee. Thus, he held that transfer of stock of land aggregating the 44 bighas 61 biswa to M/s. Parsavnath Developers Ltd. was for Rs. 1,46,43,770, whereas, as per the copy of sale deed received from Sub-Registrar, Jodhpur, the market price for which the sale of land at similar price was carried out by the assessee for a plot measureing 370 sq. yds. comes to Rs. 4460 per sq. yd. Thus, he observed that the total cost of land as per fair market value works out to Rs. 60,24,56,800. Therefore, after reducing the cost of land at Rs. 46,43,770, he added an amount of Rs. 58,78,13,030. 5. Assessee contested the aforesaid addition before learned First Appellate Authority. After considering the submission of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made and profit had been booked by M/s Parsvnath Developers Ltd. It is further argued that the addition of Rs. 1,87,19,545/- has been made in respect of sale of 14 plots of land of a total area of 3600 sq. yards, without considering that these plots are part of the same 47.01 bighas of land, whose sale to M/s Parsvnath Developers Ltd., has been brought to tax in the order u/s 153C for the AY 2006-07, passed on the same date. 5.1. The appellant has contended that the addition has been made in respect of developed plots sold by M/s Parsvnath Developers Ltd., in which sales the appellant is a confirming party. The AR of the appellant has stated that the appellant is an associated company of M/s Parsvnath Developers Limited and an agreement to sell dated 02.09.2005 was executed between the appellant and M/s Parsvnath Developers Limited. As per the said agreement to sell, the appellant company represented that it had made arrangement to acquire about 120 - 150 bighas of contiguous land at Dhinana, District Jodhpur, Rajasthan from various landowners / sellers. However, the said agreement did not materialize as the appellant company failed to acquire rights to the entire contiguous land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he land of 47.01 bighas shown till then as WIP, from the appellant to M/s Parasvnath Developers Ltd., to give effect of sales made by the developer company in earlier years. Therefore, the additions made by the AO of estimated profit on sale of the same land admeasuring 47.01 bighas in the span of the assessment years 2006-07 to 2013- 14 has led to triple taxation in the hands of the appellant. 5.4. In order to verify these contentions, the appellant was required to furnish a detailed chart in terms of the years of purchase of the land and sale of plots in the hands of M/s Parsvnath Developers Ltd. In response, the appellant vide its letter dated 21.02.2017 filed u/s 250(4) of the Act, furnished the details of sale of plots from AYs 2006- 07 to 2012-13 in the books of M/s Parsvnath Developers Limited, out of the said parcel of land of 47.01 bighas which was acquired by the appellant and was the subject of the development agreement with M/s Parsvnath Developers Ltd. The total saleable land out of 47.01 bighas, after plotting and development, has been disclosed at 50,875 sq. yards. M/s. Parsvnath Developers Ltd. is shown to have sold till date, 175 plots of 200-400 sq. yards, 23 vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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