Smt. Anjana P. Oswal, Pune v. ACIT, Circle -5, Pune, Pune

ITA 476/PUN/2011 | 2007-2008
Pronouncement Date: 28-11-2014 | Result: Dismissed

Appeal Details

RSA Number 47624514 RSA 2011
Assessee PAN AAWPJ7050K
Bench Pune
Appeal Number ITA 476/PUN/2011
Duration Of Justice 3 year(s) 7 month(s) 8 day(s)
Appellant Smt. Anjana P. Oswal, Pune
Respondent ACIT, Circle -5, Pune, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 28-11-2014
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 28-11-2014
Date Of Final Hearing 21-04-2014
Next Hearing Date 21-04-2014
Assessment Year 2007-2008
Appeal Filed On 19-04-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI G.S. PANNU ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA JUDICIAL MEMBER ITA NO.476/PN/2011 (ASSESSMENT YEAR : 2007-08) SMT. ANJANA P. OSWAL 259/A/5 BHAVANI PETH PUNE 42. PAN : AAWPJ7050K . APPELLANT VS. ASSTT. COMMISSIONER OF INCOME TAX CIRCLE- 5 PUNE. . RESPONDENT ITA NO.477/PN/2011 (ASSESSMENT YEAR : 2007-08) SHRI JAYANTILAL TARACHAND OSWAL 259/A/5 BHAVANI PETH PUNE 42. PAN : AACPO7931N . APPELLANT VS. ADDL. COMMISSIONER OF INCOME TAX RANGE- 5 PUNE. . RESPONDENT ASSESSEE BY : MR. SUNIL PATHAK DEPARTMENT BY : MR. MAZHAR AKRAM DATE OF HEARING : 29-09-2014 DATE OF PRONOUNCEMENT : 28-11-2014 ORDER PER G. S. PANNU AM THE CAPTIONED TWO APPEALS RELATE TO TWO DIFFERENT A SSESSEES BELONGING TO SAME FAMILY FOR ASSESSMENT YEAR 2007-08 AND SINC E THEY INVOLVE CERTAIN COMMON ISSUES THEY HAVE BEEN CLUBBED AND HEARD TOG ETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. FIRST WE SHALL TAKE-UP THE APPEAL OF THE ASSESS EE IN ITA NO.477/PN/2011 WHICH IS DIRECTED AGAINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-III PUNE DATED 30.11.2010 WHI CH IN TURN HAS ARISEN ITA NO.476/PN/2011 ITA NO.477/PN/2011 FROM AN ORDER DATED 24.12.2009 PASSED BY THE ASSESS ING OFFICER U/S 143(3) OF THE INCOME-TAX ACT 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT Y EAR 2007-08. 3. IN THIS APPEAL ASSESSEE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL:- 1] THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDIT ION OF RS.1 53 88 155/- ON ACCOUNT OF SALE CONSIDERATION W HILE DETERMINING THE TOTAL INCOME OF THE APPELLANT. 2] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE SALE CONSIDERATION DUE TO THE APPELLANT ON ACCOUNT OF SALE OF LAND TO SAYAJI HOTELS WAS ACTUALLY RS.15 51 12 845/- AS AGAINST THE AMOUNT OF RS.17 05 01 000/- AS MENTIONED WRONGLY IN THE REGISTERED SALE DEED WITH SAYAJI HOT ELS AND HENCE THE ADDITION OF RS.1 53 88 155/- ON THIS ACCOUNT WAS NOT JUSTIFI ED. 3] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE PAY MENT MADE BY THE APPELLANT OF RS.1 53 88 155/- WAS NEITHER DISTRIBUT ION OF SALE CONSIDERATION BY OVERRIDING TITLE NOR EXPENDITURE INCURRED FOR THE P URPOSE OF THE BUSINESS AND ACCORDINGLY THE ADDITION MADE BY THE LEARNED A.O. WAS JUSTIFIED. 4] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE TRA NSACTION ENTERED INTO BY THE APPELLANT FOR PAYMENT OF RS.1 53 88 155/- WA S A MAKE BELIEVE ARRANGEMENT AND NOT A GENUINE TRANSACTION AND THE O NLY INTENTION WAS TO AVOID TAX LIABILITY. 5] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT - A. IN THE REGISTERED SALE DEED OF THE LAND WITH SAY AJI HOTELS THERE WAS AN ERROR IN THE INTER SE ALLOCATION OF THE SALE PROCEEDS AMONGST THE VARIOUS VENDORS AND THAT MISTAKE WAS ACCEPTED BY AL L OF THEM AND HENCE IT WAS NOT CORRECT TO HOLD A VIEW THAT THE C ONSIDERATION MENTIONED IN THE SALE DEED TO EACH VENDOR WAS THE C ORRECT FIGURE. B. THERE WAS NO CHANGE IN THE TOTAL CONSIDERATION R ECEIVED FROM THE BUYER SAYAJI HOTELS AND THE VARIOUS VENDORS HA D PAID THE TAXES ON THIS AMOUNT. C. THE PRINCIPLE THAT THE REGISTERED AGREEMENT IS T O BE GIVEN A WEIGHTAGE OVER THE UNREGISTERED AGREEMENT MOU WAS N OT APPLICABLE IN THIS CONTEXT AS BASICALLY THEY RELATED TO DIFFER ENT TRANSACTIONS. D. BECAUSE OF THE MOU THERE WAS AN OVERRIDING TITL E TO THE PAYMENTS MADE TO THE OTHER CO VENDORS BY THE ASSESS EE AND HENCE THE SAME HAD TO BE REDUCED FROM THE CONSIDERATION M ENTIONED IN THE SALE DEED FOR THE ASSESSEE. E. THE APPORTIONMENT OF THE SALE CONSIDERATION WAS MADE AS PER THE MOU AND WAS ACCEPTED BY ALL THE VENDORS AND THE RE WAS NO LOSS OF REVENUE. F. ALTERNATELY THE ABOVE AMOUNT OF RS.1 53 88 155/ - WHICH WAS PAID TO THE OTHER CO VENDORS BY THE ASSESSEE CONSTI TUTED AN ALLOWABLE DEDUCTION AS PER BOMBAY H.C. DECISION IN [214 ITR 1 ]. ITA NO.476/PN/2011 ITA NO.477/PN/2011 6] WITHOUT PREJUDICE THE ABOVE AMOUNT OF RS.1 53 8 8 155/- WHICH WAS THE EXCESS CONSIDERATION RECEIVED BY THE ASSESSEE A ND LATER DISTRIBUTED AMONGST THE OTHER CO VENDORS WAS A DIVERSION OF INC OME BY OVERRIDING TITLE AND HENCE NOT TAXABLE IN THE HANDS OF THE ASSESSEE . 7] THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISAL LOWANCE OF RS.1 05 00 000/- BEING THE AMOUNT CLAIMED AS PAYABL E TO MANAV PROMOTERS ON THE GROUND THAT THE ASSESSEE WAS NOT REQUIRED TO MAKE THE SAID PAYMENT AND THE EXPENDITURE CLAIMED WAS NOT GENUINE. 8] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT - I. THE SETTLEMENT WITH MANAV DEVELOPERS WAS MADE TH ROUGH MRS. JAYASHRI WANI. THE ABOVE PAYMENT OF RS.1.05 CRS. WA S ALREADY MADE BY THE APPELLANT TO SMT. JAYASHRI WANI FOR SETTLEME NT OF DUES TO MANAV DEVELOPERS TOWARDS THE CANCELLATION OF THE AGREEMEN T AND WHICH WAS CONFIRMED BY HER AND HENCE SO FAR AS THE ASSESSEE IS CONCERNED THE LIABILITY WAS GENUINE AND THE CLAIM OF DEDUCTION TH EREOF WAS FULLY JUSTIFIED. II. IF MANAV DEVELOPERS HAS CLAIMED IN HIS LETTER D ATED 4.12.2009 THAT THE ABOVE PAYMENT OF RS.1.05 CRS. WAS NOT RECE IVABLE BY HIM FROM THE ASSESSEE THE SAME WOULD CONSTITUTE THE IN COME OF THE ASSESSEE IN F.Y. 2009 - 10 WHICH THE ASSESSEE HAS A GREED TO OFFER TO TAX BUT IT DID NOT IMPLY THAT THE CLAIM MADE BY THE ASSESSEE WAS BOGUS. 4. ALTHOUGH ASSESSEE HAS RAISED MULTIPLE GROUNDS O F APPEAL BUT ESSENTIALLY THE GRIEVANCE IS WITH RESPECT TO TWO IS SUES FIRSTLY WITH REGARD TO AN ADDITION OF RS.1 53 88 155/- MADE BY THE INCOME-TAX AUTHORITIES ON ACCOUNT OF UNDISCLOSED SALE CONSIDERATION; AND SECONDLY WITH REGARD TO A DISALLOWANCE OF RS.1 05 00 000/- MADE BY THE INCOME-TAX AUTHORITIES ON ACCOUNT OF A NON- EXISTING LIABILITY. 5. IN SO FAR AS THE ADDITION OF RS.1 53 88 155/- IS CONCERNED THE RELEVANT FACTS ARE AS FOLLOWS. THE ASSESSEE ALONG WITH OTHE R CO-OWNERS SOLD A LAND AT SURVEY NOS.135 & 136 WAKAD PUNE TO M/S SAYAJI HOT ELS FOR A TOTAL CONSIDERATION OF RS.21 88 01 000/- VIDE REGISTERED SALE-DEED DATED 10.08.2006. IN TERMS OF THE SAID AGREEMENT ASSESS EE RECEIVED CONSIDERATION OF RS.17 05 01 000/- WHEREAS IN THE RETURN OF INCOM E FILED BY THE ASSESSEE FOR ASSESSMENT YEAR UNDER CONSIDERATION HE DISCLOSED A CONSIDERATION OF RS.15 51 12 845/-. THE ASSESSING OFFICER SHOW-CAUS ED THE ASSESSEE TO ITA NO.476/PN/2011 ITA NO.477/PN/2011 JUSTIFY THE DIFFERENTIAL IN THE CONSIDERATION ACCRU ING TO THE ASSESSEE IN TERMS OF THE REGISTERED SALE-DEED DATED 10.08.2006 AND THE A MOUNT DISCLOSED IN THE RETURN OF INCOME. IN RESPONSE ASSESSEE FURNISHED BEFORE THE ASSESSING OFFICER THREE MEMORANDUM OF UNDERSTANDINGS (MOU) FIRST MOU DATED 09.11.2005 SECOND MOU DATED 20.10.2006 AND THIRD M OU DATED 23.11.2006 WHICH WERE ENTERED BETWEEN ASSESSEE AND FOUR OTHER PERSONS. IN TERMS OF THE SAID MOU ASSESSEE AND OTHER FOUR PERSONS NAMELY (I) ANJANA PRAVIN OSWAL; (II) JAYSHREE KAILAS WANI (VENKATESH DEVELOPERS); ( III) VICKY SHAMSUNDER BHUTADA; AND (IV) LATA MANOJ SHAH WERE TO SHARE TH E SALE PROCEEDS OF THE SAID LAND DIFFERENTLY THAN THE SHARES ACCRUING AS P ER THE REGISTERED SALE-DEED. THE ASSESSEE EXPLAINED THAT ON THE BASIS OF SUCH MO US ASSESSEE WAS TO RECEIVE SALE CONSIDERATION OF RS.15 51 12 845/- ONL Y AND THEREFORE SUCH AN AMOUNT WAS DISCLOSED IN THE RETURN OF INCOME. THE ASSESSING OFFICER AS WELL AS THE CIT(A) HAVE DIFFERED WITH THE ASSESSEE. AS PER THE INCOME-TAX AUTHORITIES THE MOUS WHICH HAVE BEEN RELIED UPON B Y THE ASSESSEE ARE UNREGISTERED DOCUMENTS AND THEY COULD NOT BE RELIED UPON. SECONDLY IT HAS ALSO BEEN POINTED OUT BY THE INCOME-TAX AUTHORITIES THAT THE AVERMENTS IN THE REGISTERED AGREEMENT OF SALE DATED 10.08.2006 ESTAB LISHED THAT THE BUYER I.E. M/S SAYAJI HOTELS HAVE PAID THE CONSIDERATION TO TH E CO-OWNERS AS PER THEIR PROPORTIONATE AND RESPECTIVE SHARES IN THE PROPERTY SOLD. ONE OF THE POINTS RAISED BY THE ASSESSEE WAS THAT THE MOUS ENTAILED H IGHER PAYMENTS TO ONE OF THE CO-OWNERS LATA MANOJ SHAH AND JAYSHREE KAILAS W ANI (PARTNER OF VENKATESH DEVELOPERS) THAN THE AMOUNT STATED IN THE SALE-DEED ON ACCOUNT OF EXTRA EFFORTS MADE BY THEM IN CARRYING OUT OF THE A FORESAID TRANSACTION OF PURCHASING THE LAND AND SELLING THEREOF. THE AFORE SAID PLEA OF THE ASSESSEE ALSO DID NOT FIND FAVOUR WITH THE ASSESSING OFFICER AS ACCORDING TO HIM ASSESSEE COULD NOT JUSTIFY SUCH EXTRA PAYMENTS TO O THER PERSONS. MOREOVER THE ASSESSING OFFICER HAS ALSO NOTED THAT AS PER MO US A SUM OF RS.10 00 000/- HAS BEEN PAID TO VICKY SHAMSUNDER BH UTADA BUT THE SAID ITA NO.476/PN/2011 ITA NO.477/PN/2011 PERSON IS NOT SHOWN AS A CO-OWNER IN THE REGISTERED SALE-DEED. FOR ALL THE AFORESAID REASONS THE ASSESSING OFFICER TREATED TH E ASSESSEES SHARES OF SALE CONSIDERATION OF RS.17 05 01 000/- STATED IN THE RE GISTERED SALE-DEED AS THE AMOUNT OF CONSIDERATION ACCRUING TO HIM ON THE SALE OF PROPERTY IN QUESTION AND ACCORDINGLY AN ADDITION OF RS.1 53 88 155/- WA S MADE TO THE RETURNED INCOME. THE CIT(A) HAS SINCE AFFIRMED THE SAID DEC ISION AGAINST WHICH ASSESSEE IS APPEAL BEFORE US. 6. BEFORE US THE LD. REPRESENTATIVE FOR THE ASSESS EE HAS VEHEMENTLY ARGUED THAT THE LOWER AUTHORITIES WERE NOT JUSTIFIE D IN REJECTING THE PLEA OF THE ASSESSEE TO ADOPT THE CONSIDERATION ACCRUING TO THE ASSESSEE ON THE BASIS OF MOUS ENTERED AMONGST THE CO-OWNERS WHICH WAS PRIOR TO THE DATE OF THE REGISTERED SALE AGREEMENT. IT HAS BEEN SUBMITTED T HAT THE TERMS AND CONDITIONS OF THE MOUS COPIES OF WHICH HAVE BEEN P LACED IN THE PAPER BOOK SUGGEST THAT SOME OF THE PERSONS NAMELY LATA MANO J SHAH AND JAYSHREE KAILAS WANI HAVE MADE EXTRA EFFORTS IN PURCHASING A ND SELLING THE SAID LAND AND THEREFORE THEY HAVE BEEN COMPENSATED FOR SUCH E XTRA SERVICES BY GIVING THEM HIGHER SHARE IN THE SALE PRICE. THE POINT MAD E OUT BY THE ASSESSEE IS THAT THE TERMS AND CONDITIONS OF THE MOU ARE TO BE TAKEN AS DIVERSION OF INCOME BY OVERRIDING TITLE QUA THE TERMS OF DISTRIB UTION OF SALE PROCEEDS RECORDED IN THE SUBSEQUENTLY EXECUTED REGISTERED SA LE AGREEMENT. 7. ON THE OTHER HAND THE LD. DEPARTMENTAL REPRESEN TATIVE APPEARING FOR THE REVENUE HAS RELIED UPON THE REASONING TAKEN BY THE LOWER AUTHORITIES WHICH WE HAVE ALREADY ADVERTED TO IN THE EARLIER PA RAS AND THE SAME IS NOT REPEATED FOR THE SAKE OF BREVITY. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. IN OUR CONSIDERED OPINION THE CASE SETUP BY THE INCOME-TAX AUTHORITI ES IS BASED ON A REGISTERED ITA NO.476/PN/2011 ITA NO.477/PN/2011 AGREEMENT OF SALE AND THE AVERMENTS CONTAINED THERE IN CANNOT BE BRUSHED ASIDE LIGHTLY. IN THE SAID REGISTERED SALE AGREEM ENT ASSESSEES SHARE OF SALE CONSIDERATION IS 17 05 01 000/- AND THE SAME IS LIA BLE TO BE CONSIDERED AS THE CONSIDERATION ACCRUING TO THE ASSESSEE. THE MOUS R ELIED UPON BY THE ASSESSEE TO JUSTIFY ADOPTION OF A DIFFERENT SALE CO NSIDERATION IN OUR VIEW IS OF NO-CONSEQUENCE ESPECIALLY BECAUSE NEITHER THE SAID MOUS ARE REGISTERED AND NOR THEIR TERMS AND CONDITIONS FIND A MENTION I N THE RECITAL OF THE REGISTERED SALE AGREEMENT. MOREOVER THE MOUS ENVI SAGE DISTRIBUTION OF SALE PROCEEDS WITH ONE MR. VICKY SHAMSUNDER BHUTADA WHO IS NOT STATED TO BE A CO-OWNER IN THE REGISTERED SALE AGREEMENT. APART T HEREFROM THERE IS NO CREDIBLE EXPLANATION FURNISHED BY THE ASSESSEE AS T O THE REASON FOR THE DIFFERENCE IN THE SHARES IN THE SALE CONSIDERATION NOTED IN THE REGISTERED SALE AGREEMENT AND THE MOUS. THEREFORE CONSIDERED IN I TS ENTIRETY WE FIND THAT THE INCOME-TAX AUTHORITIES HAVE APPROPRIATELY CONSI DERED THE ASSESSEES SHARE OF SALE CONSIDERATION AT RS.17 05 01 000/- ON THE B ASIS OF THE REGISTERED SALE AGREEMENT DATED 10.08.2006. 9. THE ASSESSEES PLEA FOR DIVERSION OF INCOME BY O VERRIDING TITLE ON THE STRENGTH OF THE MOUS IS ALSO NOT APPROPRIATE IN THE ABSENCE OF THE RELIABILITY OF SUCH MOUS. THEREFORE IN SO FAR AS THE FIRST ISSUE IS CONCERNED WE HEREBY AFFIRM THE ORDER OF THE LOWER AUTHORITIES. 10. BEFORE PARTING WE MAY ALSO DEAL WITH AN ALTERN ATIVE PLEA OF THE ASSESSEE TO THE EFFECT THAT THE DIFFERENTIAL IN THE SALE CONSIDERATION OF RS.1 53 88 155/- BE CONSIDERED AS AN EXPENSE INCURR ED BY THE ASSESSEE IN THE COURSE OF EXECUTING THE IMPUGNED TRANSACTION. THE PLEA OF THE ASSESSEE IS THAT THE SAID AMOUNT BE CONSIDERED TO HAVE BEEN PAID TO THE OTHER PERSONS FOR THE SERVICES RENDERED BY THEM FOR EXECUTION OF THE AFORESAID TRANSACTION. ON THIS ASPECT IT HAS BEEN POINTED OUT THAT THE OT HER PERSONS WHO HAVE ITA NO.476/PN/2011 ITA NO.477/PN/2011 RECEIVED THE DIFFERENTIAL AMOUNT HAVE OFFERED SUCH AMOUNT AS THEIR INCOMES AND THEREFORE ON THIS COUNT ALSO ASSESSEE DESERVES SUCH A DEDUCTION. ON THIS ASPECT ALSO WE ARE UNABLE TO ALLOW THE PLEA OF THE ASSESSEE BECAUSE THE FINDING OF THE LOWER AUTHORITIES IS THAT THE MOUS H AVE BEEN FOUND TO BE UNRELIABLE. THERE IS NO MATERIAL OR EVIDENCE ON RE CORD FOR US TO DISTRACT FROM THE AFORESAID FINDING OF THE LOWER AUTHORITIES. TH EREFORE THE ALTERNATIVE PLEA OF THE ASSESSEE IS ALSO REJECTED. 11. ANOTHER ISSUE IN THE APPEAL OF THE ASSESSEE REL ATES TO A DISALLOWANCE OF RS.1 05 00 000/- MADE BY THE ASSESSING OFFICER ON A CCOUNT OF A NON-EXISTING LIABILITY. THE RELEVANT FACTS IN THIS REGARD ARE T HAT THE ASSESSING OFFICER NOTED THAT WHILE ARRIVING AT THE PROFIT FROM THE PURCHASE AND SALE OF LAND AT WAKAD ASSESSEE HAD CLAIMED AN EXPENDITURE OF RS.2 25 00 0 00/- REPRESENTING PAYMENTS MADE TO M/S MANAV DEVELOPERS. THE SAID EX PENDITURE WAS EXPLAINED BY THE ASSESSEE AS COMPENSATION PAID TO M /S MANAV PROMOTERS PVT. LTD. AS THE ASSESSEE HAD EARLIER ENTERED INTO AN UNDERSTANDING WITH THE SAID PARTY TO SELL THE WAKAD LAND TO THE SAID PARTY . ASSESSEE EXPLAINED THAT SUBSEQUENT TO THE CONTRACT WITH M/S MANAV PROMOTERS PVT. LTD. ASSESSEE AND THE OTHER CO-OWNERS OBTAINED A BETTER PRICE FOR THE WAKAD LAND AND IT WAS SOLD TO M/S SAYAJI HOTELS; AND THEREFORE THE AGREEMENT WITH M/S MANAV PROMOTERS PVT. LTD. WAS CANCELLED WITH SOLATIUM PAYMENT OF RS .2.25 CRORES. THEREFORE THE SOLATIUM OF RS.2.25 CRORES PAID WAS CLAIMED AS AN EXPENDITURE AGAINST THE PROFITS EARNED ON THE SALE OF LAND TO SAYAJI HOTELS . IN THIS CONTEXT THE ASSESSING OFFICER CARRIED OUT A VERIFICATION EXERCI SE WHICH RESULTED IN THE INFORMATION THAT A SUM OF RS.1 05 00 000/- WAS NOT RECEIVED BY M/S MANAV PROMOTERS PVT. LTD. AT ALL. IT WAS FOUND THAT ASSE SSEE CLAIMED TO HAVE PAID A SUM OF RS.1 05 00 000/- TO M/S JAYSHREE KAILAS WANI ON BEHALF OF M/S MANAV PROMOTERS PVT. LTD. WHICH WAS NOT ULTIMATELY RECEI VED BY M/S MANVA DEVELOPERS. THE CLAIM OF THE ASSESSEE WAS THAT OUT OF THE TOTAL COMPENSATION ITA NO.476/PN/2011 ITA NO.477/PN/2011 OF RS.2.25 CRORES AN AMOUNT OF RS.1.20 CRORES WAS PAID DIRECTLY TO M/S MANAV DEVELOPERS AND BALANCE OF RS.1.05 CRORES WAS PAID T O JAYSHREE KAILAS WANI FOR ONWARD PAYMENT TO M/S MANAV DEVELOPERS. THE VE RIFICATION EXERCISE CARRIED OUT BY THE ASSESSING OFFICER REVEALED THAT M/S MANAV DEVELOPERS RECEIVED ONLY RS.1.20 CRORES AND NOT THE BALANCE OF RS.1.05 CRORES. THE ASSESSEE CONTENDED THAT IT WAS UNDER A BONAFIDE BEL IEF THAT THE AMOUNT PAID TO JAYSHREE KAILAS WANI WAS TOWARDS COMPENSATION PA YABLE TO M/S MANAV DEVELOPERS AND THEREFORE IT WAS NOT AWARE OF SUCH A SITUATION THAT THE SAID AMOUNT WAS NOT PAID TO M/S MANAV DEVELOPERS. M/S M ANAV DEVELOPERS IN ITS DEPOSITION BEFORE THE ASSESSING OFFICER DENIED HAVI NG RECEIVED RS.1 05 00 000/- AND ALSO STATED THAT NO ADDITIONAL COMPENSATION OTHER THAN RS.1 20 00 000/- WAS RECEIVABLE BY THEM. ON THIS B ASIS THE ASSESSING OFFICER HELD THAT THERE WAS NO LIABILITY AT ALL ON THE PART OF THE ASSESSEE TO PAY RS.1 05 00 000/- AND THEREFORE HE DISALLOWED SUCH A CLAIM. THE CIT(A) HAS ALSO AFFIRMED THE STAND THE ASSESSING OFFICER AGAI NST WHICH ASSESSEE IS IN APPEAL BEFORE US. 12. BEFORE US THE LD. REPRESENTATIVE FOR THE ASSES SEE HAS NOT DISPUTED THE RESULT OF THE VERIFICATION EXERCISE CARRIED OUT BY THE ASSESSING OFFICER. IT IS NOT DISPUTED BY HIM THAT THE DEPOSITION OF M/S MANAV DE VELOPERS TO THE EFFECT THAT ADDITIONAL COMPENSATION OF RS.1 05 00 000/- WAS NOT RECEIVABLE BY THEM AT ALL CONTINUES TO HOLD THE FIELD. THEREFORE IN SO FAR AS NON-EXISTENCE OF THE LIABILITY OF RS.1 05 00 000/- IS CONCERNED THERE IS NO DISPU TE. HOWEVER THE PLEA SETUP BY THE LD. REPRESENTATIVE FOR THE ASSESSEE IS THAT ASSESSEE PAID THE SAID AMOUNT TO JAYSHREE KAILAS WANI IN GOOD FAITH THAT I T REPRESENTED COMPENSATION PAYABLE TO M/S MANAV DEVELOPERS FOR HA VING CANCELLED THE EARLIER CONTRACTED AGREEMENT. THE LD. REPRESENTATI VE EXPLAINED THAT IT WAS ONLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS TH AT ASSESSEE CAME TO KNOW OF THE NON-EXISTENCE OF SUCH LIABILITY AND THA T RIGHTLY SPEAKING THE SAID ITA NO.476/PN/2011 ITA NO.477/PN/2011 AMOUNT COULD NOT BE DISALLOWED WHILE ASSESSING THE INCOME FOR THE INSTANT YEAR BUT IT SHOULD BE ASSESSED AS INCOME FOR THE PR EVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2010-11. THE LD. REPRESENTATIVE PO INTED OUT THAT EVEN BEFORE THE ASSESSING OFFICER ASSESSEE HAS RAISED S UCH A PLEA AND THE SAME HAS BEEN UNJUSTLY REJECTED. 13. ON THE OTHER HAND THE LD. DEPARTMENTAL REPRESE NTATIVE APPEARING FOR THE REVENUE HAS JUSTIFIED THE ORDERS OF THE AUTHORI TIES BELOW ON THIS ASPECT BY PLACING RELIANCE THEREON. 14. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. IN OUR CONSIDERED OPINION THE ALTERNATIVE PLEA SETUP BY THE ASSESSEE TO THE EFFECT THAT THE AMOUNT OF RS.1 05 00 000/- IS BE ASSESSED TO TAX IN ASSESSMENT YEAR 2010-11 IS NOT JUSTIFIED. IN THE PRESENT CASE THE VERIFIC ATION EXERCISE CARRIED OUT BY THE ASSESSING OFFICER WHICH IS NOT DISPUTED BY THE ASS ESSEE REVEALED THAT THERE WAS NO LEGALLY ENFORCEABLE LIABILITY ON THE ASSESSE E TO HAVE PAID RS.1 05 00 000/- TO M/S MANAV DEVELOPERS IN THE CON TEXT OF THE AGREEMENT WITH M/S MANAV PROMOTERS PVT. LTD. WHICH WAS CANCEL LED. ONCE IT IS FOUND THAT THERE WAS NO LEGAL OBLIGATION ON THE PART OF T HE ASSESSEE TO PAY SUCH AN AMOUNT THE CONSEQUENCES HAVE TO FOLLOW AND THEREFO RE THE SAID AMOUNT HAS BEEN RIGHTLY ASSESSED TO TAX IN THE YEAR UNDER CONS IDERATION. THE PLEA OF THE ASSESSEE WOULD HAVE BEEN JUSTIFIED IF THE CESSATION OF LIABILITY WOULD HAVE HAPPENED IN THE SUBSEQUENT PERIOD. SO HOWEVER THI S IS A CASE WHERE FROM THE BEGINNING THERE WAS NO LIABILITY FOR THE ASSESS EE TO INCUR SUCH AN EXPENDITURE. ACCORDINGLY WE HEREBY AFFIRM THE OR DER OF THE LOWER AUTHORITIES IN DISALLOWING THE CLAIM OF RS.1 05 00 000/- WHILE COMPUTING THE PROFIT ON SALE OF LAND AT WAKAD. THUS ON THIS ASPECT ALSO ASSESS EE FAILS. ITA NO.476/PN/2011 ITA NO.477/PN/2011 15. IN THE RESULT APPEAL OF THE ASSESSEE IN ITA NO .477/PN/2011 IN THE CASE OF SHRI JAYANTILAL TARACHAND OSWAL IS DISMISSED. 16. IN SO FAR AS IN ITA NO.476/PN/2011 IN THE CASE OF SMT. ANJANA P. OSWAL IS CONCERNED THE ONLY ISSUE RELATES TO THE DIFFERE NCE IN SALE CONSIDERATION ACCRUING TO THE ASSESSEE AS PER THE REGISTERED AGRE EMENT TO SALE DATED 10.08.2006 AND THE AMOUNT DISCLOSED IN THE RETURN O F INCOME. THE FACTS AND CIRCUMSTANCES OF THE SAID DISPUTE ARE PARI-MATERIA TO THOSE CONSIDERED BY US IN THE CASE OF SHRI JAYANTILAL TARACHAND OSWAL IN T HE EARLIER PARAGRAPHS. OUR DECISION THEREIN APPLIES MUTATIS MUTANDIS IN THIS APPEAL ALSO AND ACCORDINGLY ASSESSEE HAS TO FAIL. 17. RESULTANTLY BOTH THE APPEALS OF THE ASSESSEE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH NOVEMBER 2014. SD/- SD/- (SUSHMA CHOWLA) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 28 TH NOVEMBER 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-III PUNE; 4) THE CIT-III PUNE; 5) THE DR B BENCH I.T.A.T. PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T. PUNE