ITO, Ward 3(2), Pune V. Ashwini Sanjay Deshpande, Pune

ITA 1167/PUN/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2888 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 14-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 27-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Principle of natural justice; Rule of consistency; Cost of acquisition; Fair market value
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1167/PN/2013 '% % / ASSESSMENT YEAR : 2009-10 ITO, WARD-3(2), PUNE . / APPELLANT V/S SMT. ASHWINI SANJAY DESHPANDE, 1187/60, J.M. ROAD, PUNE 411 005 PAN NO. AARPD5294L . / RESPONDENT / APPELLANT BY : SHRI NIKHIL PATHAK / RESPONDENT BY : SMT. SARDAR SINGH MEENA / ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER DATED 08-01-2013 OF THE CIT(A)-II, PUNE RELATING TO ASSE SSMENT YEAR 2009-10. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND FILED HER RETURN OF INCOME ON 30-09-2009 DECLA RING TOTAL INCOME OF RS.14,75,060/-. DURING THE COURSE OF ASSESS MENT PROCEEDINGS THE AO NOTED THAT ASSESSEE IN HER COMPUTA TION OF / DATE OF HEARING : 11.01.2016 / DATE OF PRONOUNCEMENT:15.01.2016 2 ITA NO.1167/PN/2013 INCOME HAS DISCLOSED SHORT TERM CAPITAL GAIN OF RS.15,75,000/ -, THE DETAILS OF WHICH ARE AS UNDER : SHORT TERM : SALE OF LAND FHURSUNGI, TAL HAVELI , DIST PUNE RS.22,36,57,525 /- LESS :COST OF ACQUISITION PURCHASE COST OF LAND SOLD RS.11,41,00,474 PROVISION FOR DEVELOPMENT EXP.RS.10,79,82,051 --------------------- RS.22,20,82,525 --------------------- SHORT TERM CAPITAL GAINS RS.15,75,000/- --------------------- 3. FROM THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE DU RING THE COURSE OF ASSESSMENT PROCEEDINGS TO SUBSTANTIATE T HE SHORT TERM CAPITAL GAINS THE AO NOTED THE FOLLOWING POINTS : (I) VARIOUS LANDS HAD BEEN PURCHASED BY THE ASSESSEE AT FHURSINGI. THE COST OF LANDS PURCHASES IS STATED TO BE RS.11,41,00,4 74/-. THE ASSESSEE HAS SOLD THE LANDS IN A SHORT SPAN OF TIME TO DSK L TD. DURING THE YEAR RELEVANT TO A.Y. 2009-10 FOR A CONSIDERATIO N OF RS.22,36,57,524/-. (II) WHILE COMPUTING THE SHORT TERM CAPITAL GAIN THE ASSESSEE HAS REDUCED THE COST OF LAND OF RS.11,41,00,474/- AND ANO THER ADDITIONAL AMOUNT STATING IT TO BE COST OF SELLING AMOUNTING TO RS.10,79,82,051/- . THIS COST OF SELLING IS THE AMOUNT REFUNDED BY THE ASSESSEE TO DSK LTD FOR CERTAIN DEVELOPMENT WORK TO HAVE BEEN UNDERTAKE N BY HER. THE DEVELOPMENT WORK TO HAVE BEEN UNDERTAKEN BY HER IS STATED TO BE FOR SUCH WORK SUCH AS FENCING, REMOVING OF DEBRIS, EXCAVAT ION, AMALGAMATION OF LAND, LEVELING OF LAND, MOJINI, CON STRUCTION OF WALLS, AND OTHER RELATED DEVELOPMENTS. APPARENTLY AS PER TH E SUBMISSION MADE BEFORE THE UNDERSIGNED IT APPEARS ALL THESE WORKS WERE TO BE COMPLETED WITHIN ONE YEAR FROM THE AGREEMENTS TO SALE . THE ASSESSEE HAS NOT UNDERTAKEN SUCH WORK. (III) IN THE AGREEMENTS TO SALE WITH DSKD LTD THERE I S NO MENTION OF THIS COST TO BE INCURRED BY THE ASSESSEE, THE AMOUNT HAS N OT BEEN QUANTIFIED AT ALL. THE ASSESSEE HAS SUBMITTED THE ESTIMA TE OF SUCH WORK WHICH WAS PREPARED BY HER WITH THE HELP OF OFFI CIALS AND TECHNICAL PERSONS OF DSKD LTD. THE AMOUNT TO BE EXPE NDED FOR THE DEVELOPMENT WORK, IS A HUGE AMOUNT OF RS.10,79,82,051 /- WHICH WAS TO BE USED WITHIN ONE YEAR, IT WAS NEVER DECIDED OR Q UANTIFIED IN THE SAID SALE DEEDS, HENCE, IT IS DEVELOPMENT WORK EXPENSES A MOUNTING TO RS.10,79,82,051/- THE ESTIMATE PREPARED BY THE ASSESSEE A ND REFUNDED BY HER TO DSK LTD. WAS HELD AS NOT ALLOWABLE TO HER. 3 ITA NO.1167/PN/2013 (IV) WHEN COMPARED TO THE COST OF LAND THE COST OF DE VELOPMENT IS ALMOST AS MUCH AS THE COST OF LAND. IT IS PERTINENT TO MENTION THAT THE LANDS SOLD BY THE ASSESSEE TO DSKD LTD ARE SCATTERED OVER A LARGE EXPANSE OF LAND AND THE DEVELOPMENT WORK AND EXPENSES SEEMS ILLOGICAL WHICH IS APPARENT WHEN THE DETAILS OF SUCH E STIMATE IS SEEN WHICH IS REPRODUCED BELOW : ESTIMATE OF LAND DEVELOPMENT WORK IN R/O. SHILPA KUL KARNI S.NO. PARTICULARS AMOUNT 1 REMOVING DISPOSING OF EXISTING BUNDS & OLD HUTS COW SHADES & HOUSES ETC. 18 5000 GOVERNMENT & PRIVATE MEASUREMENT OF LAND (MOJANI) 111072.15 REMOVING OF GRASS, SHRUBS, DEBRIS, DISPOSING, CARTING AWAY & CLEANING 1480962 CONSTRUCTION OF RETAINING/COMPOUND WALL 9316774.13 CONSTRUCTION OF ENTIRE ROAD NETWORK IN CONCRETE WITH TREMIX FINISH 55813510 PLUMBING DEVELOPMENT OF WORKS EXTERNAL DRAINAGE DEVELOPMENT WORK 2407996 WATER DEVELOPMENT WORK 24795865 STORM WATER DEVELOPMENT WORKS 2541512 EXCAVATION, REFILLING & LEVELLING OF GROUND & DISPOSING SURPLUS MATERIAL 1132935 9.30 TOTAL 107982050.58 (V) THE PERTINENT QUESTION HERE IS WHY WOULD THE ASSE SSEE BE REQUIRED TO CONSTRUCT RETAINING/COMPOUND WALL. HOW COULD SHE CONSTRUCT ROADS WHEN THE LANDS ARE SCATTERED. HOW COUL D SHE EXPEND THE MONEY FOR WATER DEVELOPMENT AND DRAINAGE WORK I N SUCH SCATTERED PIECES OF LAND. A MAP SUBMITTED BY THE AR F URTHER CLARIFIES THIS POINT. IT IS CLEAR FROM THE ESTIMATE PREPARED TH AT SUCH WORK WAS NEVER PLANNED WHEN THE LANDS WERE SOLD AND IS AN AFTE RTHOUGHT. (VI) IN THE SALE DEED THERE IS NO CLAUSE WHICH STATES TH AT THE MONEY WILL BE REFUNDED IN THE EVENT OF SUCH DEVELOPMENT WO RK IS NOT CARRIED OUT BY THE ASSESSEE. (VII) THE AMOUNT TO BE EXPENDED FOR THE DEVELOPMENT WORK, THE AMOUNT OF RS.10,79,82,051/- WHICH WAS APPARENTLY TO B E USED WITHIN ONE YEAR, WAS NEVER DECIDED OR QUANTIFIED IN THE SAID SALE DEED, HENCE THE DEVELOPMENT WORK EXPENSES, REFUNDED BY THE ASSESSEE LATER TO DSKD LTD. IS AN AFTERTHOUGHT TO REDUCE THE LIABILIT Y OF SHORT TERM CAPITAL GAIN. THE MONEY REFUNDED BY THE ASSESSEE TO T HE COMPANY WAS PROMPTED BY THE FACT THAT THE PROPOSED SEB PROJECT O F THE COMPANY DID NOT MATERIALIZE, BUT IT IN NO WAY CAN THIS AMOU NT BE REDUCED AS COST OF SELLING. ALSO THE MONEY HAS NOT BEEN EXPENDED BY THE ASSESSEE AT ALL. (VIII) THE ENTIRE SCENARIO OF PURCHASE OF LANDS BY THE ASSESSEE AND THE ALMOST IMMEDIATE SALE WITHIN SHORT SPAN OF TIME F OR HUGE SUMS, IT IS APPARENT THAT BY PURCHASING THE LANDS AT RS.22,36,57 ,524/-, DSKD LTD WAS ENHANCING THE VALUE OF LANDS IN ITS BOOKS AND P ASSING THE 4 ITA NO.1167/PN/2013 CONSIDERATION TO INTERESTED PARTIES, I.E. FAMILY MEMB ERS, RELATIVES, MEMBERS OF SISTER CONCERNS, DIRECTORS ETC. (IX) THE ASSESSEE HAS STATED IN THE SUBMISSIONS THAT THE DEVELOPMENT WORK WAS TO BE CARRIED OUT BY HER WITHI N ONE YEAR OF THE AGREEMENTS OF THE SALE, BUT FROM THE SUBMISSION IT IS SEE N THE ESTIMATE WAS PREPARED BY HER ONLY IN JANUARY 2009, WHILE SHE W OULD BE REQUIRED TO FINISH THE WORK BY AUGUST 2009, WHEN THE LAST AGREEMENT OF SALE IS DATED AUGUST 2008. THE ESTIMATE WAS NEVER MA DE BEFORE THE LANDS WERE SOLD AND CLEARLY INDICATES THAT IT IS AN AFT ERTHOUGHT WITH A DESIGN TO REDUCE THE SHORT TERM CAPITAL GAIN. (X) THE ASSESSEE HAS PRODUCED A LETTER FROM DSK LTD DATE D 04-09- 2009 WHEREIN THE COMPANY HAS ASKED THE ASSESSEE TO REFUND THE AMOUNT OF RS.10,79,82,051/- AS THE SEZ JOINT VENTURE WAS CANCELLED AND THE COMPANY DID NOT WANT TO WATER MONEY ON THE DEVELOPMENT WORK. THE MONEY HAS BEEN REFUNDED BY THE ASSESSEE ONLY ON 10-03- 2010. THE CONDITIONS MENTIONED FOR THE REFUND OF MO NEY ARE EXTRANEOUS TO THE SALE AGREEMENT SAND NOWHERE MENTION ED IN THE SALE AGREEMENTS. THE OBLIGATION TO UNDERTAKE THE MASSIVE D EVELOPMENT WORK, OR TO RETURN THE MONEY WAS NEVER ENJOINED ON THE ASSESSEE BY THE SALE DEEDS. THE SALE DEEDS MERELY MENTION VAGUELY CERTAIN DEVELOPMENT WORK TO BE CARRIED OUT WITHIN 12 MONTHS OF THE SALE. (XI) THE DECISION OF KERALA HIGH COURT CITED BY THE ASSESSEE CANNOT RESCUE OF THE ASSESSEE AS THE FACTS OF THIS CASE ARE DIFFER ENT FROM THE FACTS OF THE CASE CITED ABOVE, AND NOT COMPARABLE. (XII) AS PER THE SCHEME OF TAXATION OF CAPITAL GAINS A S PER THE PROVISIONS OF SECTION 48 OF THE INCOME TAX ACT, 1961, THE CAPITAL GAINS HAS TO BE COMPUTED BY DEDUCTING FROM THE FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF CA PITAL ASSET, THE FOLLOWING AMOUNTS, NAMELY : (A) EXPENDITURE INCURRED WHOLLY IN CONNECTION WITH THE TRANSFER AND (B) THE COST OF ACQUISITION OF ASSETS AND COST OF ANY IMPROVEMENT. FROM THE ABOVE, IT IS CLEAR THAT THE DEDUCTION OF RS. 10,79,82,051/- IN RESPECT OF THE ABOVE AMOUNT REFUNDED BY THE ASSESSEE IS N OT AN ELIGIBLE DEDUCTION FOR THE PURPOSES OF COMPUTATION OF INCOME BY WAY OF CAPITAL GAINS. 4. IN VIEW OF THE ABOVE DISCUSSION AND POINTS RAISED, THE AO WAS OF THE OPINION THAT THE MONEY REFUNDED BY THE ASSES SEE IS A COLOURABLE DEVICE AND AN ATTEMPT BY HER TO REDUCE HER TAX LIABILITY WHICH HAS ARISEN DUE TO THE SALE MADE BY HER. HE THERE FORE ISSUED A SHOW CAUSE NOTICE DATED 05-12-2011 ASKING THE ASSE SSEE TO SUBSTANTIATE HER CLAIM OF SHORT TERM CAPITAL GAIN. 5 ITA NO.1167/PN/2013 5. THE ASSESSEE APPROACHED THE ADDL.CIT FOR DIRECTION U/S.144A. IN THE MEANTIME, THE ASSESSEE ALSO FILED HER SUB MISSION DATED 26-12-2010 IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED BY THE AO ON 05-12-2011. 6. IT WAS SUBMITTED THAT SHE HAS ENTERED INTO MOU DAT ED 16-08-2007 WITH DSKD LTD. WHICH DESCRIBES THE CONSIDERAT ION OF LAND TO BE SOLD, DEVELOPMENT WORK TO BE DONE SUCH AS RE MOVING AND DISPOSING BUNDS, LAYING OF COMPOUND WALLS, REMOVING OF GR ASS, SHRUBS, DEBRIS, DISPOSING CARTING AWAY AND CLEANING, GOVT. AN D PRIVATE MEASUREMENT OF LAND ETC. IN THE SAID MOU VARIOU S CONDITIONS HAVE BEEN MENTIONED. ON THE BASIS OF AFORESAID MOU, SALE DEEDS WERE EXECUTED BETWEEN THE ASSESSEE AND DS KDL. THE SALE DEEDS INCLUDE NATURE OF DEVELOPMENT WORK THAT HAS T O BE PERFORMED BY THE ASSESSEE WHICH WAS ESSENCE OF THE SALE DEEDS. IT WAS SUBMITTED THAT IT IS HER CONTRACTUAL OBLIGATION TO PE RFORM THE WORK AND IT IS ALSO MENTIONED THAT IF THERE IS CHANGE IN PR OPOSED PROJECT THE ASSESSEE HAS TO REFUND THE MONEY SET APA RT FOR DEVELOPMENT WORK. THE AMOUNT WAS NOT MENTIONED SEPARA TELY IN THE SALE DEEDS FOR THE WORK TO BE PERFORMED BY HER SINC E SALE DEEDS ARE PUBLIC DOCUMENTS WHICH ARE OPEN TO PUBLIC AT LARGE. H OWEVER, THE NATURE OF WORK WAS SPECIFICALLY MENTIONED IN THE RESPE CTIVE SALE DEEDS AS PER MOU. REFERRING TO THE DOCUMENTS FILED IN THE PAPER BOOK IT WAS SUBMITTED THAT THE CLAUSE IN MARATHI SHOWS THAT EXPENSES WERE TO BE INCURRED BY THE SELLER WHICH IS SPEC IFICALLY MENTIONED IN ALL THE SALE DEEDS. THEREAFTER, THE ASSESSEE PREPARED ESTIMATES FOR LAND DEVELOPMENT WORK WITH THE HELP OF OFFICIALS/TECHNICAL PERSONS OF DSKDL WHICH WAS AT 6 ITA NO.1167/PN/2013 RS.10,79,82,051/-. THE SAID ESTIMATE WAS PREPARED IN CONSULTATION WITH TECHNICAL EXPERTS OF DSKDL AND ACCORDING LY THE ASSESSEE AND AUTHORIZED PERSONNEL OF DSKDL CONFIRMED THE SAME ON 27-11-2008 BY EXECUTING THE DEED OF CONFIRMATION. THE REFORE, THE AMOUNT OF EXPENDITURE TO BE EXPENDED ON THE DEVE LOPMENT WORK WAS FIXED. THEREFORE, IT IS INCORRECT TO SAY THAT TH E AMOUNT OF EXPENDITURE WAS NOT QUANTIFIED AT ALL. IT WAS SUBMITTED T HAT BOTH THE PARTIES HAD AGREED THAT THE PERIOD FOR EXECUTION OF WORK WILL BE 12 MONTHS. HOWEVER, DUE TO DEVELOPMENT OF FUTURE EVENTS THE SAID COMPANY INFORMED THE ASSESSEE FROM TIME TO TIME NOT TO P ROCEED WITH THE WORK SINCE DSKDL WAS NEGOTIATING TO FORM SPV WIT H VARIOUS OTHER COMPANIES AND REQUIREMENT OF DEVELOPMENT W ORK WAS IN PROCESS/WAS CONSTANTLY CHANGING. 7. THE ASSESSEE FURTHER SUBMITTED THAT THE PERIOD OF 12 MONTHS WAS EXTENDED FROM TIME TO TIME BY BOTH THE PARTIES MUTU ALLY. AFTER FINAL DECISION OF REFUNDING THE AMOUNT, DSKDL PASSED A JOU RNAL ENTRY IN THEIR BOOKS AND COST OF THEIR WIP GOT REDUCED BY THE SAID AMOUNT. IT WAS SUBMITTED THAT REFUND OF MONEY BY THE A SSESSEE WILL INCREASE THE TAXATION IN THE HANDS OF DSKDL AND THERE FORE THERE IS NO REVENUE LOSS. ON THE CONTRARY, IF THE SAID EX PENDITURE IS DISALLOWED, IT WILL AMOUNT TO DOUBLE TAXATION, I.E. IN THE HANDS OF THE ASSESSEE AS WELL AS IN THE HANDS OF DSKDL AND IN SUB SEQUENT YEAR THERE WILL BE HUGE LOSS IN THE BOOKS OF THE ASSESSEE WHICH CANNOT BE ABSORBED AGAINST CORRESPONDING HEAD WHICH WILL BE AGAINST NATURAL JUSTICE. 8. THE ASSESSEE SUBMITTED THAT SHE WAS REQUIRED TO P ERFORM AT THE LAND WHICH WAS SOLD TO DSKDL. THE SAID WORK WAS MEN TIONED 7 ITA NO.1167/PN/2013 IN THE SALE DEEDS AS WELL AS IN THE MOU. THE SALE DEEDS W ERE REGISTERED DOCUMENTS WITH THE SUB-REGISTRAR. THE RESO LUTIONS OF DSKDL AND GOVERNMENT SANCTION AS WELL AS CANCELLATION OF S EZ WERE SUBMITTED BEFORE THE AO. IT WAS SUBMITTED THAT TH E COST OF AMOUNT TO BE SPENT ON DEVELOPMENT WORK ON LAND WAS FINA LIZED BY BOTH THE PARTIES AFTER SERIES OF DISCUSSIONS FROM TIME TO T IME. THE ASSESSEE FURTHER SUBMITTED THAT DSKDL WAS TO TRANSFER THE DEVELOPED LAND TO THE JOINT VENTURE WITH FOREIGN COMPANY AT HIGHER RATE OF RS.1.55 CRORES PER ACRE APPROXIMATELY WHICH INDICA TES THAT CONSIDERING THE DEVELOPMENT COST THE FOREIGN COMPANY HA D ALSO ACCEPTED THE ABOVE RATE FOR THE LAND WHICH WAS EVEN HIG HER THAN WHAT THE ASSESSEE HAS CHARGED TO DSKDL, I.E. RS.1.30 CROR ES PER ACRE. IT WAS SUBMITTED THAT THE ASSESSEE WAS GOING TO APPOINT TECHNOCRATS/ENGINEERS TO UNDERTAKE SUCH DEVELOPMENT W ORK. THEREFORE, IT IS NOT NECESSARY THAT EVERY DEVELOPER/CONT RACTOR SHOULD BE AN EXPERT IN THE FIELD. IT IS A BUSINESS AND NOT A PROFESSION. THE ASSESSEE FURTHER SUBMITTED THAT SHE HAS PURCHASED THE LANDS FROM FARMERS AND NOT FROM DSKDL AND THE LANDS WERE SOLD TO DSKDL WHEREIN SHE IS A SHAREHOLDER. R ELYING ON VARIOUS DECISIONS IT WAS SUBMITTED THAT A PART OF THE CONSIDERATION TO THE EXTENT OF RS.10,79,82,051/-DID NOT A CCRUE TO THE ASSESSEE AND IT WAS REFUNDED TO DSKDL. THEREFORE, THE CONSIDERATION FOR TRANSFER OF PROPERTY MUST BE REDUCED B Y THE ABOVE AMOUNT OF RS.10,79,82,051/- FOR DETERMINING THE CAPITA L GAINS U/S.48. IT WAS FURTHER SUBMITTED THAT THE SAME ISS UE HAD COME UP IN THE CASE OF D.S. KULKARNI AND CO. FOR A.Y. 2008-09 . THEY HAD ALSO SOLD VARIOUS LANDS AT FHURSINGI TO DSKDL AN D MADE PROVISIONS FOR DEVELOPMENT WORK. AT THAT TIME ALSO THE AD DL.CIT 8 ITA NO.1167/PN/2013 HAD ISSUED NOTICE ON THE SAME LINES AND AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE HE DID NOT MAKE ANY ADDIT ION IN THE SAID CASE. THEREFORE, FOLLOWING THE RULE OF CONSISTENCY THE A MOUNT OF RS.10,79,82,051/- MUST BE REDUCED FROM THE SALE CONSIDERATION. 9. IN THE MEANTIME THE AO RECEIVED THE DIRECTION ISSUED U/S.144A FROM THE ADDL.CIT WHO DIRECTED THE AO TO CONSIDE R THE FOLLOWING POINTS BEFORE FINALIZATION OF THE ORDER (PARA 5.1 AND 5.2 OF THE ASSESSMENT ORDER) : (A) AGREEMENT TO SALE SHOULD BE PERUSED THOROUGHLY AND ALL THE TERMS AND CONDITIONS SHOULD BE EXAMINED TO ASCERTAIN TH E FACTS AS NARRATED BY THE ASSESSEE. (B) MOU BETWEEN ASSESSEE AND DSKDL SHOULD BE EXAMINED V IS-- VIS TERMS AND CONDITIONS MENTIONED THEREIN. (C) A.O. SHOULD ASCERTAIN WHAT IS THE POSITION IN THE C ASE OF DSK CO. FOR A.Y. 2008-09, WHETHER FACTS OF THAT CASE ARE SAME AS IN THIS CASE AND WHAT WAS THE DECISION ARRIVED AT IN THAT CASE DURI NG THE COURSE OF ASSESSMENT. (D) A.O. SHOULD ASCERTAIN ASSESSEES CONTENTION THAT ADDI TION WOULD LEAD TO DOUBLE TAXATION AS ASSESSEE HAS RETURNED THE MONE Y TO DSKDL. ASSESSEE SAYS THAT DSKDL HAS ALREADY CREDITED THE AMOUNT I N ITS BOOKS AND WIP HAS BEEN REDUCED ACCORDINGLY. A.O IS DI RECTED TO EXAMINE ASSESSEE S CONTENTION AND ALSO VERIFY THE FACTS V IS--VIS RETURN OF INCOME FILED BY DSKSL IN RANGE-1, PUNE. (E) CASE LAWS CITED BY ASSESSEE SHOULD BE DEALT WITH AND E XAMINED BEFORE FINALIZATION OF ASSESSMENT ORDER. (F) A.O IS DIRECTED TO FRAME ASSESSMENT ORDER AFTER CONSI DERING AND EXAMINING ALL THE ISSUES/EVIDENCES/DOCUMENTS SUBMITTE D BY THE ASSESSEE. 10. AFTER EXAMINING THE DIRECTION OF THE ADDL.CIT, RANGE-3 A ND CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE THE AO HELD THAT THE REFUND OF MONEY OF RS.10,79,82,051/- BY THE ASSES SEE TO DSKDL IS NOT AN ALLOWABLE DEDUCTION IN COMPUTING THE SHOR T TERM CAPITAL GAINS. WHILE DOING SO, HE NOTED THAT THE SALE DEED S BY WHICH THE LANDS HAVE BEEN TRANSFERRED DID NOT IN ANY WAY QUANTIFY 9 ITA NO.1167/PN/2013 THE COST OF DEVELOPMENT WORK TO BE CARRIED OUT BY THE ASSESSEE. ONLY VAGUELY MENTIONED DEVELOPMENT WORK SUCH AS REMOV ING AND DISPOSING BUNDS, LAYING OF COMPOUND WALL, REMOVING OF GRASS, SHRUBS, DEBRIS, DISPOSING, CARTING AWAY AND CLEANING AND GOVERNMENT AND PRIVATE MEASUREMENT OF LAND (MOHANI) ARE MENTIONED. 11. THE AO FURTHER NOTED THAT THE ASSESSEE, FOR THE FIRS T TIME, HAS REFERRED TO AND PRODUCED A COPY OF MOU ENTERED INT O WITH DSKDL WHICH ENUMERATES THE CONSIDERATION FOR THE SALE OF LANDS AND WORK TO BE DONE. THE MOU PRODUCED BY THE ASSESS EE IS DATED 16-08-2007 AND THERE WAS NO MENTION OF THE EXISTENCE O F SUCH AN MOU TILL NOW, I.E. 26-12-2011. THE ASSESSEE, BY WAY OF SALE D EEDS, IS UNDER NO OBLIGATION TO UNDERTAKE THE DEVELOPMENT WOR K CLAIMED BY HER. THE MOU IS A SELF SERVING DOCUMENT, THE VERACITY OF WHICH IS IN DOUBT AS IT IS NEITHER A REGISTERED DEED NOR A NOTA RISED ONE, THEREFORE, THE MOU PREPARED ON A RS.100/- STAMP PAPER AND PRESENTED FOR THE FIRST TIME ON 26-12-2011 CANNOT BE RE LIED UPON. IT IS MERELY AN UNDERSTANDING BETWEEN A PUBLIC LIMITED CO MPANY ENTERED INTO WITH AN INTERESTED FAMILY MEMBER. FURTHER, THE DEED OF CONFIRMATION PRODUCED BY THE ASSESSEE IS DATED 15-01-2 009. THE ASSESSEE BY WAY OF THE SALE DEEDS IS UNDER NO OBLIGATION TO UNDERTAKE THE DEVELOPMENT WORK CLAIMED BY HER AND THE SAME WAS NEVER QUANTIFIED IN THE SALE DEEDS. THEREFORE, THE DEED OF CONFIRMATION FILED BY THE ASSESSEE IS A SELF-SERVING DOCUMEN T, THE VERACITY OF WHICH IS IN DOUBT AND IT IS NEITHER A REGISTERED DEED NOR A NOTARIZED ONE. THE AO THEREFORE REJECTED THE CLAIM OF REFUND OF MONEY OF RS.10,79,82,051/- TO DSKDL AS AN ALLOWABLE EXPENDIT URE 10 ITA NO.1167/PN/2013 AND DETERMINED THE TOTAL SHORT TERM CAPITAL GAIN OF THE ASSESSEE AT RS.10,95,57,050/-. 12. BEFORE CIT(A) THE ASSESSEE REITERATED THE SAME ARGU MENTS AS MADE BEFORE THE AO. THE ASSESSEE FILED A DETAILED SUBMISS ION AND A PAPER BOOK WHICH CONTAINED THE DOCUMENTS AND RELATED DETAILS WHICH WERE FILED BEFORE THE AO DURING THE ASSESSMENT PROC EEDINGS. IT WAS CONTENDED THAT A DETAILED SUBMISSION FOR THE OBJE CTIONS RAISED BY THE AO ALONG WITH THE PURCHASE/SALE DEEDS, BAN K STATEMENT AND ESTIMATES PREPARED BY THE ASSESSEE AND TECHNICAL EXPERTS FOR DEVELOPMENT OF LAND, JV PASSED BY DSKDL, PROOF OF REFUND OF MONEY WAS SUBMITTED DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSEE HAD ALSO MET THE OBJECTIONS RAISED BY THE AO DURING THE ASSESSMENT PROCEEDINGS AND WHICH HAD ALSO BEEN FILED DURING THE 144A PROCEEDINGS BEFORE THE ADDITIONA L CIT, RANGE-3. 13. AS REGARDS THE NON-COMPLETION OF WORK WITHIN 12 MONT HS AS PER THE TERMS OF THE SALE DEED IS CONCERNED IT WAS EXPLA INED THAT DUE TO THE CHANGED SCENARIO AFTER THE INCLUSION OF A FOREIG N PARTNER GTC WITH RESPECT TO THE PLANNING OF SEZ, THE DEVELOPER DS KDL WENT ON INSTRUCTING THE ASSESSEE NOT TO COMMENCE THE DEVELOPME NT WORK. WITH RESPECT TO THE NON-MENTION OF THE DEVELOPMEN T COST TO BE BORNE BY THE ASSESSEE IN THE SALE DEED IT WAS EXPLAIN ED THAT THE NATURE OF WORK TO BE CARRIED OUT WAS SPECIFICALLY MENTIONE D IN THE SALE DEED AS PER THE MOU DATED 16-08-2007 WHEREIN IT W AS CLEARLY MENTIONED THAT THE COST OF DEVELOPMENT WAS TO BE INCURR ED BY THE ASSESSEE. REGARDING THE QUESTION RAISED RELATING TO NON- QUANTIFICATION OF THE DEVELOPMENT WORK BY THE AO, IT WAS SUBMITTED 11 ITA NO.1167/PN/2013 THAT THE ESTIMATE FOR THE SAID WORK WITH THE HELP OF OFFICIAL AND TECHNICAL PERSONS OF DSKDL WAS PREPARED FOR AN AMOUNT O F RS.10,79,82,051/- AND THE SAME WAS DULY CONFIRMED BY DSK DL ON 27-11-2008 FOR WHICH A DEED OF CONFIRMATION WAS ALSO EX ECUTED. REGARDING THE OBSERVATION OF THE AO FOR CARRYING OF DEVE LOPMENT WORK ON LANDS WHICH WERE SCATTERED IT WAS SUBMITTED T HAT THE DEVELOPMENT WORK WAS TO BE CARRIED OUT ON EACH PIECE O F LAND AS FINALLY THE ENTIRE LANDS WERE TO BE AMALGAMATED AND THE DEVELOPMENT OF EACH SELLER WAS CONTROLLED AND SUPERVISED B Y DSKDL AND, THEREFORE, EVEN THOUGH THE LANDS WERE SCATT ERED, ULTIMATELY THE SAME WILL BE MERGED ALONG WITH ONE PROJECT OF DSKDL OF ABOUT 250 TO 270 ACRES. REGARDING THE SALE DEE D HAVING NO CLAUSE FOR REFUND OF MONEY IN THE EVENT OF DEVELOPMENT W ORK NOT CARRIED OUT IT WAS EXPLAINED THAT THE SALE DEED INCLUDED N ATURE OF DEVELOPMENT WORK TO BE PERFORMED BY THE ASSESSEE WHER EAS THE MOU DATED 16.08.2007 ENTERED INTO BY THE ASSESSEE WITH DSKDL DESCRIBES THE VARIOUS DETAILS OF WORK TO BE DONE AND VAR IOUS CONDITIONS HAVE ALSO BEEN MENTIONED. THE ASSESSEE THUS S UBMITTED THAT IT WAS A CONTRACTUAL OBLIGATION OF THE ASSESSEE TO P ERFORM THE WORK AS PER THE MOU AND DEED OF CONFIRMATION AND IN THE EVENT OF ANY CHANGE OF SIZE OR SPECIFICATION OF PROJECT OR DELAY IN IN STRUCTION FROM DSKDL FOR DEVELOPMENT WORK, THE ASSESSEE HAS TO RE FUND THE MONEY SET APART FOR THE SAID WORK AS PER PARA 3 OF MOU AND PARA (IX) OF DEED OF CONFIRMATION. 14. WITH RESPECT TO THE NOTINGS OF THE ASSESSING OFFICER R EGARDING THE DSKDL HAVING ENHANCED THE VALUE OF LAND AND PASSING THE CONSIDERATION TO INTERESTED PARTIES IT WAS SUBMITTED THAT THE PROOFS RELATING TO THE MONEY HAVING BEEN RETURNED BY THE ASSE SSEE TO 12 ITA NO.1167/PN/2013 DSKDL HAS BEEN SUBMITTED INCLUDING THE JV, BANK STATEMENT OF DSKDL AND AFFIDAVIT OF DSKDL WHICH CLEARLY INDICATE THAT THE AMOUNT KEPT ASIDE FOR DEVELOPMENT WORK HAVING BEEN REFUNDED AND THUS THE ISSUE OF PASSING OF MONEY TO THE ASSESSEE DOES NOT ARISE. THE ASSESSEE CONTENDED THAT HAD SHE NOT RETURNED TH E MONEY SET APART FOR DEVELOPMENT OF WORK, DSKDL BEING A PUBLIC LTD. CO . WOULD HAVE RECOVERED THE AMOUNT BY LEGAL MEANS WHICH DE FIES INTENTION OF AN AFTERTHOUGHT. REGARDING THE OBSERVATION O F THE ASSESSING OFFICER THAT REFUND OF MONEY IS A COLOURABLE DEVICE TO REDUCE TAX LIABILITY AND ALSO WITH RESPECT TO THE DELAY IN R EFUNDING THE MONEY BY THE ASSESSEE TO DSKDL IT WAS SUBMITTED T HAT DSKDL GAVE LETTER DATED 30-09-2009 TO THE ASSESSEE SEEKING REFUND OF AMOUNT AND THE ASSESSEE HAD GIVEN ITS ACCEPTANCE WHE REIN SHE AGREED TO REFUND THE MONEY WITHIN 8 TO 10 MONTHS. THE A SSESSEE EXPLAINED THAT THE SAID LETTER WAS GIVEN AS PER THE MOU AND DEED OF CONFIRMATION AND CONTENDED THAT BOTH HAS TO BE REFERR ED TOGETHER AND ONE CANNOT READ ONE DOCUMENT IN ISOLATION AND COME TO A CONCLUSION. THE ASSESSEE AGAIN REITERATED THAT AFTE R THE FINAL DECISION OF REFUNDING THE AMOUNT DSKDL PASSED JV IN THEIR BOOKS AND COST OF THEIR WIP GOT REDUCED BY THE SAID AMOUNT. IT WAS CONTENDED THAT THE REFUND OF MONEY WILL INCREASE THE TAX ATION IN THE HANDS OF DSKDL, THEREFORE, THERE IS NO REVENUE LOSS A ND ON THE CONTRARY IF THE SAID EXPENDITURE IS DISALLOWED IT WILL RESULT IN DOUBLE TAXATION, BOTH IN THE HANDS AND THE ASSESSEE AS WELL AS DSKDL. THEREFORE, THE FACT CLEARLY INDICATES THAT IT IS NEITHER A C OLOURABLE DEVICE NOR AN ATTEMPT TO REDUCE THE TAX LIABILITY. REGARD ING THE OBSERVATION OF THE AO THAT REFUND OF MONEY IS AN AFTERTHO UGHT TO REDUCE THE LIABILITY OF CAPITAL GAINS, IT WAS SUBMITTED THAT TH E SAME 13 ITA NO.1167/PN/2013 IS NOT CORRECT AS PART OF THE CONSIDERATION TO THE EXTE NT OF RS.10,79,82,051 DID NOT ACCRUE TO THE ASSESSEE. FURTHER , THE AO IS DUTY BOUND TO COMPUTE THE REAL AND CORRECT INCOME, WHIC H CANNOT BE IGNORED. FOR THE ABOVE PROPOSITION, THE ASSESSEE PLAC ED RELIANCE ON THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF AHMEDABAD ELECTRICITY SUPPLY CO. REPORTED IN 199 ITR 35 1. THE ASSESSEE ALSO PLACED RELIANCE ON THE DECISION OF SUSHILA S. JHAVERI VS. UOI, 286 ITR 428, FOR THE PROPOSITION THAT EVENTS TILL T HE STAGE OF PASSING THE ORDER MUST BE CONSIDERED FOR DECIDING THE CASE. 15. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) DIRECTED THE AO TO REDUCE THE AMOUNT OF RS.10,79,82,051/- FROM THE SALE CONSIDERATION FOR COMPUTING SHORT TERM CAPITAL GAIN. THE RELEVANT OBSERVATION OF LD.CI T(A) FROM PARA 4.5 TO 4.10 OF THE ORDER READS AS UNDER : 4.5 THE SUBMISSION MADE BY THE APPELLANT HAS BEEN CON SIDERED AND MATERIAL ON RECORD PERUSED. IT IS UNDISPUTED FACT THAT THE APPELLANT HAS SOLD VARIOUS LANDS TO THE DEVELOPERS, I.E. DSK DEVELOPERS WHO WERE DESIROUS TO PURCHASE ABOUT 100 TO 120 ACRES OF CONTIGUOUS LAND FOR DEVELOPMENT OF THEIR SEZ PROJECTS, WHICH WA S LATER ON REVISED TO ONE PROJECT OF ABOUT 250 TO 270 AFTER NEGOTIATIO N WITH THE FOREIGN COMPANY VIZ. GTC CYPRUS, NETHERLANDS FOR A JOINT VENT URE FOR SETTING UP THE SEZ. THE CO. I.E. DSK DEVELOPER LTD HAD EVEN ENTERED INTO AN AGREEMENT WITH THE FOREIGN COMPANY VIDE AGREEMENT D ATED 10-7- 2008. IT IS ALSO SEEN THAT THE APPELLANT AGREED TO SELL THE DEVELOPED LANDS AT RATE APPROVED OF RS. 1.30 CRORES PER ACRE F OR A DEVELOPED LAND THOUGH THE FAIR MARKET VALUE WAS MUCH LOW AT 4. 40 LACS PER ACRE. THE DEVELOPER HAD OFFERED THE APPELLANT SUCH HANDSOME CONSIDERATION FOR SALE ONLY AFTER THE APPELLANT HAD UNDERTAKEN TO DEVELOP THE LANDS WHICH WAS NOT AN EASY TASK THE LANDS BEING AGRICULTURA L AND NOT SUITABLE FOR SEZ. THE APPELLANT HAD EVEN ENTERED IN TO MOU WITH THE DEVELOPER ON 16-08-2007 WHEREBY THE APPELLANT AGREE D TO SELL THE LAND WITH THE DEVELOPMENT AS DESIRED AND AGREED UPON BY THE COMPANY. THE APPELLANT ONLY AFTER THE EXECUTION OF THE AFORESAID MOU'S HAD TRANSFERRED AND EXECUTED SALE DEEDS OF LAND I N FAVOR OF DSK DEVELOPER LTD FOR A CONSIDERATION OF RS. 22,36,57,525 /-. THE APPELLANT IN PERFORMANCE TO THE MOU'S AND THE CONDITION OF DEV ELOPMENT OF LAND APPROACHED THE PERSON HAVING TECHNICAL KNOWLEDGE AND PREPARED AN ESTIMATE OF EXPENDITURE FOR THE DEVELOPMENT OF THE L AND AT RS.7,98,57,979/- AND THE SAME HAD ALSO BEEN CONFIRMED BY BOTH THE PARTIES INCLUDING THE APPELLANT FOR WHICH A DEED OF CONFIRMATION DATED 14 ITA NO.1167/PN/2013 15-01-2009 WAS EXECUTED WHICH CONFINED AND QUANTIFIE D THE EXPENDITURE THE PROJECT OF SEZ ENVISAGED BY DEVELOP ERS M/S D.S. KULKARNI DEVELOPER LTD HAD ALSO BEEN APPROVED BY THE GOVT. VIDE ITS APPROVAL DATED 26-7-2007. THE FACTS BROUGHT ON RECOR D DO INDICATE THAT THE DEVELOPMENT WORK GOT DELAYED BECAUSE OF THE NEGOTIATION BY THE DEVELOPER WITH THE FOREIGN CO. GTC CYPRUS, NETHE RLAND. THOUGH, SUBSEQUENTLY THE DEVELOPERS HAD TO ABANDON THE PROJECT SEZ BECAUSE OF THE WORSENING ECONOMIC SCENARIO AND THE NEGOTIATIO NS HAVING BROKEN DOWN WITH THE FOREIGN COMPANY. IT WAS UNDER THESE CIRCUMSTANCES THAT THE DEVELOPERS SOUGHT REFUND OF THE AMOUNT WHICH WAS TO BE INCURRED TOWARDS DEVELOPMENT WORK. THE VARI OUS OBJECTIONS RAISED BY THE ASSESSING OFFICER DURING THE ASSES SMENT PROCEEDINGS HAS BEEN MET AND REPLIED BY THE APPELLANT . THE APPELLANT HAS ALSO FILED A DETAILED PAPER BOOK CONTAINING THE P APERS AND THE DOCUMENTS WHICH WERE ALSO FILED BEFORE THE ASSESSING OFF ICER AND THE ADDL. CIT, RANGE-3 DURING THE 144A PROCEEDINGS. IT I S SEEN THAT THE ASSESSING OFFICER HAS NOT CONSIDERED THE MOU, SALE DEED AN D THE DEED OF CONFIRMATION FILED BY THE APPELLANT AND WITHOUT BRINGING ANY SUCH MATERIAL ON RECORD INFERRED THE TRANSACTION TO BE CO LOURABLE DEVICE AND AN ATTEMPT TO REDUCE THE TAX LIABILITY. THE ASSESSI NG OFFICER HAS ALSO NOTED THAT THE REFUND OF MONEY WAS AN AFTERTHOUG HT TO REDUCE THE LIABILITY OF CAPITAL GAINS, HOWEVER, THE VARIOUS DEVE LOPMENTS WHICH WAS TAKING PLACE HAS NOT BEEN CONSIDERED BY THE ASSESSING OFFICER BEFORE ARRIVING AT THE AFORESAID CONCLUSION. IT IS NOT ICED THAT THE ASSESSING OFFICER HAS NOT CARRIED OUT ANY VERIFICATION SO AS TO JUSTIFY THE STAND TAKEN BY HER AND VARIOUS OBJECTIONS RAISED BA SED ON THE DETAILS FURNISHED BY THE APPELLANT. IT IS ALSO SEEN THA T THE ADDL CIT RANGE-3 HAD ALSO GIVEN DIRECTIONS TO EXAMINE THE RETU RN OF THE DEVELOPERS DSK DEVELOPER LTD. THE ASSESSING OFFICER HAS FAILED TO CONSIDER THAT THE DEVELOPMENT WORK ON THE LANDS SOLD B Y THE APPELLANT WAS A CONTRACTUAL OBLIGATION WHICH THE APPELLANT WAS BOUND TO FOLLOW LEST THE DEAL WOULD NOT HAVE TAKEN PLACE. THE ASSESSING OFFICER HAS THUS FAILED TO GO INTO THE MERITS OF THE EXPENDITURE ESTIMATION WHICH WERE TO BE INCURRED BY THE APPELLANT HAS BEEN REJECT ED OUTRIGHTLY. THE ASSESSING OFFICER, HAS ALSO NOT CONSIDERED THE ISSUE OF DOUB LE TAXATION WHICH HAS ALSO BEEN POINTED OUT IN THE 144A PROCEEDI NGS. THE FACT WHICH REMAINED AND WHICH CANNOT BE IGNORED WHILE MA KING AN ASSESSMENT IS THAT THE ASSESSING OFFICER IS DUTY BOUND TO CO MPUTE THE REAL AND CORRECT INCOME AND THE EVENTS TILL THE PASSIN G OF THE ORDER BE CONSIDERED FOR DECIDING THE CASE AS HELD IN THE CASE OF SUSHILA S. JHAVERI VS UOI (SUPRA). 4.6. THE ASSESSING OFFICER HAS ACCEPTED THE SALES CONSIDER ATION RECEIVED BY THE APPELLANT BUT NOT CONSIDERED THE OTH ER ASPECTS OF THE MATTER WHICH INCLUDED THE DEVELOPMENT WORK TO BE CA RRIED OUT BY THE APPELLANT AS THE PRICE PAID FOR THE AGRICULTURAL LAN D MUCH HIGHER THAN THE STAMP VALUE RATE OF THE AREA. THE ASSESSING OFFICER HAS NOT AT ALL CONSIDERED THE OTHER PART OF THE TRANSACTION WHEREAS I T WAS INCUMBENT ON THE ASSESSING OFFICER TO CONSIDER THE ENTIRE FACTS AND THE TOTALITY OF THE CIRCUMSTANCES TO BE TAKEN INTO ACCOUNT BEFORE ARR IVING AT A CONCLUSION. THE ASSESSING OFFICER HAS NOT BEEN ABLE TO P ROVE OR BRING ON RECORD ANY SUCH MATERIAL WHICH COULD INDICATE THE TRANSACTION TO BE SHAM RATHER HAS DRAWN INFERENCES WITHOUT HAVING EXAMIN ED THE SAME. 15 ITA NO.1167/PN/2013 4.7. UNDER THE INCOME TAX ACT, REAL INCOME IS CHARGE D TO TAX AND NOT NOTIONAL INCOME. THE COURTS HAVE USED THIS CONCEPT FO R ENSURING THAT WHAT IS TAXED IS AS NEARLY REAL AS POSSIBLE WITHIN THE CO NSTRAINTS OF STATUTORY LIMITATION. THE INCOME IS ONE WHICH GIVES T HE OWNER DISPOSABLE CAPACITY. PROBABILITY OR IMPROBABILITY OF REALIZATION IN A REALISTIC MANNER CANNOT BE IGNORED WHAT IS TAXABLE SHO ULD BE REAL AND NOT HYPOTHETICAL. THE CONCEPT OF REAL INCOME ALSO C AME FOR CRITICAL ANALYSIS IN THE CASE OF STATE BANK OF TRAVANCORE VS. CI T (1986) 158 ITR 102 (SC) WHEREIN IT IS HELD THAT, IT IS THE INCOM E WHICH HAS REALLY ACCRUED OR ARISEN TO THE ASSESSEE THAT IS TAXABLE AND IN THE PRESENT CASE NO SUCH INCOME HAS ACCRUED OR ARISEN SO AS TO BE TRE ATED AS INCOME. 4.7.1 THE APEX COURT IN THE CASE OF GODHRA ELECTRICI TY CO. VS. CIT 225 ITR 74 (SC) HAS ELABORATED AND HELD THAT : INCOME TAX IS A LEVY ON INCOME. NO DOUBT, THE INCO ME TAX ACT TAKES INTO ACCOUNT TWO POINTS OF TIME AT WHICH THE LI ABILITY TO TAX IS ATTRACTED VIZ., THE ACCRUAL OF THE INCOME OR ITS RECEIPT, BUT THE SUBSTANCE OF THE MATTER IS THE INCOME. IF INCOME DOES NOT RESULT AT ALL, THERE CANNOT BE A TAX, EVEN THOUGH IN BOOK-KEEPING AN ENTRY IS MADE ABOUT A HYPOTHETICAL INCOME, WHICH DOES NOT MATERIALIZE. 4.8 APPELLANT HAS FURTHER STATED THAT ALL EXPENDITURE WHOLLY AND EXCLUSIVELY INCURRED IN CONNECTION WITH TRANSFER HAS T O BE ALLOWED AND IT IS IMMATERIAL THAT THE SAID EXPENDITURE WAS INCURRE D SUBSEQUENT TO THE SALE DEED AND, THEREFORE, CONTENDED THAT THE CRU CIAL TEST TO BE APPLIED IS REGARDING INCURRING OF EXPENDITURE WHOLLY AND EXCLUSIVELY IN CONNECTION WITH TRANSFER AND THAT IT IS IMMATERIAL WHETHER IT WAS INCURRED PRIOR OR SUBSEQUENT TO THE PASSING OF TITLE. IT IS ALSO SUBMITTED THAT AS PER THE MOU DATED 16-08-2007 THE AP PELLANT PROMISED AND TOOK RESPONSIBILITY TO CARRY OUT THE DEV ELOPMENT WORK ON THE SAID LAND AS PER THE UNDERSTANDING AND BASED ON THE SAME THE CONSIDERATION WAS FIXED WHICH INCLUDED THE SAID COST OF THE DEVELOPMENT WORK. IT IS ALSO CONTENDED THAT THE ESTIM ATE OF EXPENDITURE TO BE INCURRED ON THE SAID LAND WAS ALSO A PPROVED BY THE COMPANY AND WAS INTRINSICALLY LINKED WITH THE TRANSFER THOUGH THE SAME HAS BEEN INCURRED SUBSEQUENT TO THE EXECUTION OF T HE SALE DEED. IT HAS, THEREFORE, BEEN CONTENDED THAT THE A.O. HAD FAILED TO CONSIDER THAT THE DEVELOPMENT WORK WAS APPELLANTS CONTRACTUAL OBLIGATION AND IF THE SAID WORK WAS NOT CARRIED OUT, THE COMPANY WO ULD HAVE RECOVERED THE SAID AMOUNT. IT IS ALSO SUBMITTED THAT VARIOUS AUTHORITIES HAVE HELD THAT EXPENDITURE WHOLLY AND EX CLUSIVELY INCURRED IN CONNECTION WITH TRANSFER HAS TO BE ALLOWE D AND IT IS IMMATERIAL THAT THE SAID EXPENDITURE WAS INCURRED SUBSE QUENT TO THE SALE DEED. THE APPELLANT HAS RELIED ON THE FOLLOWING JUDICIAL CONTENTIONS: 1. V.A. VASUMATI VS. CIT (1980) 123 ITR 94 (KER) 2. CIT VS. DR.P. RAJENDRAN (1981) 127 ITR 810 (KER) 3. KALPATARU CONSTRUCTION VS. DCIT (2007) 13 SOT 194 (MUM) 4. S.S. JHAVERI VS. UNION OF INDIA (2006) 286 ITR 428 (BOM). 16 ITA NO.1167/PN/2013 4.8.1 IN THE CASE OF V.A. VASUMATI, CITED SUPRA, THE K ERALA HIGH COURT HELD THAT ALL THE EXPENDITURE WHOLLY AND EXCLUSIVELY INCURRED IN CONNECTION WITH TRANSFER IS ALLOWABLE. THIS WAS A CASE OF COMPULSORY ACQUISITION AND THE APPELLANT HAD CHALLENGED THE AMO UNT AWARDED WITH RESPECT TO THE EXPENDITURE INCURRED ON SUBSEQUEN T LITIGATION BY THE APPELLANT, THE HONBLE COURT HELD THAT ALL EXPE NDITURE WHOLLY AND EXCLUSIVELY INCURRED IN CONNECTION WITH SUCH LITIGATI ON IS AN EXPENDITURE WITHIN THE MEANING OF SECTION 48 AND FOR THE PURPOSE OF THE SECTION, IT IS IMMATERIAL THAT THE EXPENDITURE WA S INCURRED SUBSEQUENT TO THE AWARD SO LONG AS IT WAS INCURRED WHOL LY AND EXCLUSIVELY IN CONNECTION WITH THE COMPULSORY ACQUISIT ION. IN THE PRESENT CASE ALSO THE EXPENDITURE INCURRED BY THE APPE LLANT IS WITH REFERENCE TO AND IS IN CONNECTION WITH WHOLLY AND E XCLUSIVELY RELATED TO THE TRANSFER OF THE LAND. 4.8.2 IN THE CASE OF DR. P. RAJENDRAN, CITED SUPRA, T HE KERALA HIGH COURT HELD THAT THE WORDS IN CONNECTION WITH USED I N CLAUSE (I) OF SECTION 48 OF THE I.T. ACT, ARE VERY WIDE IN THEIR A MBIT AND HENCE THERE IS NO WARRANT FOR IMPORTING A DISTINCTION THAT TO QUA LIFY FOR DEDUCTION THE EXPENDITURE MUST NECESSARILY HAVE BEEN INCURRED PR IOR TO THE PASSING OF TITLE. IT WAS FURTHER HELD THAT THE CRUCIA L TEST TO BE APPLIED IS WHETHER THE EXPENDITURE WAS INCURRED WHOLLY AND EXCL USIVELY IN CONNECTION WITH TRANSFER AND IT IS IMMATERIAL WHETHER IT WAS INCURRED PRIOR OR SUBSEQUENT TO THE PASSING OF TITLE. 4.8.3 IN THE OTHER CASE CITED BY THE APPELLANT OF KA LPATARU CONSTRUCTION SUPRA, THE ITAT, MUMBAI, HAS HELD THAT SU BSEQUENT EVENTS CONTINGENT UPON WHICH THE SAID CONSIDERATION OF CAPITAL ASSET WAS VARIABLE THEN SUCH EVENT HAS TO BE CONSIDERED WHILE COMPUTING THE CAPITAL GAIN. 4.8.4 IN THE PRESENT CASE, THE VALUE OF LAND IN QUESTI ON INCREASED SUBSTANTIALLY ON ACCOUNT OF THE VARIOUS IMPROVEMENT AN D DEVELOPMENT WORK WHICH WAS TO BE CARRIED OUT AS PER T HE MOU DATED 16-08-2007. HAD SUCH IMPROVEMENT UPON THE LAND NOT TAKEN PLACE THE SALE PRICE OF THE LAND WOULD HAVE BEEN MUCH LESS. THE WORD IMPROVE HAS VARIOUS SHADES OF MEANING AND IT INCLUDE S EVERYTHING BY DOING IN WHICH THERE IS ENHANCEMENT IN VALUE OF THE ASSET OR THERE IS A RISE IN ITS PRICE OR THE ASSET IS MADE TO GROW BETTER. IN THE CASE OF VALLIAMMAL VS. CIT (1981) 127 ITR 713 (MAD) (TB), BE TTERMENT CHARGES PAID TO MUNICIPALITY WAS HELD TO CONSTITUTE CO ST OF IMPROVEMENT FOR THE PURPOSE OF CLAUSE (I) OF SECTION 4 8 OF THE ACT, AS IT CONTRIBUTED TO THE INCREASE IN POTENTIAL VALUE OF LA ND IN A REAL SENSE. IN THE PRESENT CASE ALSO THE APPELLANT HAS CARRIED OUT A DIVERSE SET OF DEVELOPMENT WORK ON THE LAND SUCH AS CONSTRUCTION OF R OAD NETWORK IN CONCRETE, REMOVING BUND, OLD HUTS, HOUSES AND CLEAN ING GRASS, SHRUBS, DEBRIS ETC. BUILD THE COMPOUND WALL, WHICH HAS INDEED ADDED VALUE TO THE LAND FOR WHICH THE SALE CONSIDERATION RE CEIVED BY THE APPELLANT WAS MUCH MORE THAN THE EXISTING PRICE AS PER THE STAMP DUTY VALUATION. 4.9 SECTIONS 48 AND 50 OF THE ACT CLARIFY THAT CAPIT AL GAIN CAN BE CORRECTLY WORKED OUT ONLY IF COST OF ACQUISITION OR I MPROVEMENT OF THE ASSET IS DEDUCTED FROM THE FULL VALUE OF CONSIDERATION RECEIVED. THEREFORE, TO ENTITLE THE ASSESSEE TO ANY DEDUCTION IN TERMS OF THE SAID PROVISIONS ON ACCOUNT OF ANY IMPROVEMENT IT IS REQUIRE D THAT A CLAIM 17 ITA NO.1167/PN/2013 FOR SUCH DEDUCTION IS MADE BEFORE THE ASSESSING AUTHORIT Y FAILING WHICH THE A.O. SHALL BE ENTITLED TO PROCEED ON THE A SSUMPTION THAT NO SUCH IMPROVEMENT WAS ACTUALLY MADE. IN THE PRESENT CA SE THE CLAIM OF THE SAID IMPROVEMENT OF THE LAND WAS MADE BEFORE THE A.O. THOUGH IT WAS BASED ON AN ESTIMATE AS PER THE MOU WHICH FETCHED T HE APPELLANT A MUCH HIGHER SUM OF MONEY THAN IT COULD HAVE BEEN W ITHOUT SUCH IMPROVEMENT AS ENVISAGED IN THE MEMORANDUM AND WITHOU T WHICH LAND DEAL WOULD NOT HAVE TAKEN PLACE AND IT CERTAIN LY HAD TO BE ADDED TO THE COST OF THE ASSET WHICH THE A.O. HAS FAILED TO C ONSIDER AT THE ASSESSMENT STAGE. THE SALE OF THE CAPITAL ASSET AND THE DE VELOPMENT WORK TO BE CARRIED OUT AS PER THE CONTENTS OF THE MO U DATED 16-08- 2007 HAS NOT BEEN DISPUTED BY THE A.O. THE EXPRESSION IN CONNECTION WITH SUCH TRANSFER IS WIDER THAN THE EXPRESSION FOR THE TRANSFER. ANY AMOUNT, THE PAYMENT OF WHICH IS ABSOLUTELY NECESSARY TO EFFECT THE TRANSFER WILL BE AN EXPENDITURE COVERED BY THIS CLAUSE . IN OTHER WORDS, IF, WITHOUT IMPROVING ANY ENCUMBRANCE, SALE OR TRANSF ER COULD NOT BE EFFECTED, THE AMOUNT PAID FOR REMOVING THAT ENCUMBR ANCE WILL FALL UNDER CLAUSE (I) IN THE CASE OF CIT VS. SHAKUNTALA KAN TILAL (1991) 190 ITR 56 (BOM) AND FOLLOWED IN CIT VS. ABRAM ALVI (200 1) 247 ITR 312 (BOM) SLP DISMISSED AND CIT VS. PIROJA C. PATEL (2000) 242 ITR 582 (BOM) IT HAS BEEN HELD THAT THE PHRASE IN CONNECTION WITH SHOULD BE LIBERALLY CONSTRUED AND THAT, IN A CASE OF AN ACQUISIT ION OF LAND THE EXPENDITURE INCURRED FOR PROSECUTING A REFERENCE TO THE COURT EXPENDITURE INCURRED BY ASSESSEE ON MAINTENANCE OF STAFF ETC., PENDING FINALIZATION COMPENSATION WILL BE DEDUCTIBLE EXPENDI TURE SINCE CAPITAL GAIN ARE CHARGEABLE IN THE PREVIOUS YEAR VIZ., THAT IN WHICH THE TRANSFER TOOK PLACE ALL EXPENSES INCIDENTAL TO THE TRANSFER W HENEVER THEY MAY HAVE BEEN INCURRED SHOULD BE DEDUCTED AGAINST THE FUL L AMOUNT OF CONSIDERATION. IN THE CASE OF ADDL.CIT VS. ROHTAK TEX TILE MILLS LTD. (1982) 138 ITR 195 (DEL) IT WAS HELD THAT ALL EXPEND ITURE INCIDENTAL TO TRANSFER MUST BE DEDUCTIBLE IN COMPUTING THE AMOUNT O F CAPITAL GAINS WHETHER INCURRED IN THAT PREVIOUS YEAR OR NOT. THE CONCEPT OF EXPENDITURE BEING RELATABLE TO THE YEAR IN WHICH IT WAS INCURRED WILL NOT BE QUITE APPROPRIATE IN THE CONTEXT OF COMPUTAT ION OF THE CAPITAL GAINS IN VIEW OF THE LANGUAGE OF SECTION 45 R.W.S.48. COURTS HAVE OBSERVED THAT THE CRUCIAL WORDS IN THE PROVISION ARE IN CONNECTION WITH TRANSFER. THE EXPRESSION MEANS INTRINSICALLY LINKE D WITH TRANSFER. SUCH EXPENDITURE HAS TO BE WHOLLY AND EXCLU SIVELY IN CONNECTION WITH THE TRANSFER. EVEN IF SUCH EXPENDITU RE HAS SOME NEXUS WITH THE TRANSFER IT DOES NOT QUALIFY FOR DEDUCT ION UNLESS IT IS WHOLLY AND EXCLUSIVELY IN CONNECTION WITH THE TRANSFE R. FURTHER, THE EXPRESSION WHOLLY AND EXCLUSIVELY DOES NOT MEAN THAT THE EXPENDITURE SHOULD BE A NECESSARY EXPENDITURE. THUS, IN THE COMPUTATION OF CAPITAL GAINS, IN ORDER TO QUALIFY FO R DEDUCTION UNDER SECTION 48, THE EXPENDITURE SHOULD BE WHOLLY IN TER MS OF QUANTUM IN CONNECTION WITH TRANSFER AND THE MOTIVE FOR SUCH EXP ENDITURE SHOULD ALSO BE THE TRANSFER OF THE CAPITAL ASSET IN ORDER THAT EXPENDITURE COMES WITHIN THE AMBIT OF THE WORD EXCLUSIVELY. TH E ALLOWABILITY HAS TO BE EXAMINED FROM THIS ANGLE. 4.10 IN VIEW OF THE ABOVE STATED FACTS, THE DISALLOWA NCE MADE BY THE ASSESSING OFFICER IS LIABLE TO BE DELETED AND THE GROUND S OF APPEAL NO.2 AND 3 RAISED BY THE APPELLANT ARE ALLOWED. 18 ITA NO.1167/PN/2013 16. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) E RRED IN ALLOWING THE ASSESSEE'S CLAIM OF DEDUCTION OF RS. 10,79,2 2,051/ - IN THE COMPUTATION OF SHORT-TERM CAPITAL GAINS ARISING ON SAL E OF LAND AT FURSUNGI ON ACCOUNT OF EXPENSES TO BE INCURRED AS PER A N MOU TOWARDS DEVELOPMENT OF PROPERTY AND IN DIRECTING THE ASSESSING OFFICER TO REDUCE THE SUM FROM THE SALE CONSIDERATION ON ACCOUNT OF REFUND. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN FAILING TO APPRECIATE THAT THERE WAS NOT EVEN A MENT ION OF THE SO-CALLED MEMORANDUM OF UNDERSTANDING (MOU) DT. 16-08-2007, WH ICH WAS NEITHER REGISTERED NOR NOTARIZED, IN THE SALE DEEDS W HICH WERE EXECUTED SUBSEQUENTLY. THIS CLEARLY INDICATES THAT THE SO-CALLED MOU WAS AN AFTER-THOUGHT AND A SELF-CREATED, SELF-SERVING D OCUMENT. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN FAILING TO APPRECIATE THAT THE TOTAL EXPENSES OF RS. 1 0,79,22,051/- WAS A MERE ESTIMATE WHICH HAD NEITHER BEEN QUANTIFIED IN THE SALE-DEED OR IN THE MOU AND, IN THE CIRCUMSTANCES, THE SAME COULD N OT BE TREATED AS EXPENDITURE INCURRED ONLY AND EXCLUSIVELY IN CONNECT ION WITH THE TRANSFER OF ASSETS U / S. 48( 1) OF THE INCOME-TAX ACT, 1961. 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN ALLOWING THE ASSESSEE'S CLAIM OF DEDUCTION OF RS. 10,79 ,22,051/- EVEN THOUGH THE ASSESSEE HAD NOT FURNISHED ANY EVIDENCE EITHE R BEFORE THE ASSESSING OFFICER OR IN THE COURSE OF THE APPELLATE PROC EEDINGS IN SUPPORT OF THE EXPENSES ACTUALLY INCURRED. 5. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED COMM ISSIONER OF INCOME-TAX (APPEALS) ERRED IN FAILING TO APPRECIATE THAT THE EXPENDITURE OF RS. 10,79,22,051/- CLAIMED TO HAVE B EEN INCURRED ON A WORK SUCH AS REMOVING OF BUNDS, HUTS, GRASS, SHRUBS, CONSTRU CTION OF WALL AND ROAD, PLUMBING WORKS ETC. WAS UNREASONABLY HI GH. 6. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN FAILING TO APPRECIATE THAT THE AGREED SALE CONSIDERAT ION AS PER A REGISTERED DEED WOULD NOT ALTER MERELY BECAUSE THE BO ARD OF DIRECTORS OF THE BUYER COMPANY PASSED A RESOLUTION TO THAT EFFEC T AND ALSO WHEN THE REFUND AS PER SUCH RESOLUTION HAD NOT BEEN ACTUALL Y MADE BY THE ASSESSEE AND THE ASSESSEE HAD REFUND THE MONEY ONLY ON 10/ 3/2010. 7. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN DIRECTING THE ASSESSING OFFICER TO REDUCE THE SUM OF RS. 10,79,22,051/- WITHOUT APPRECIATING THAT THE ASSESSEE HAD NO OBLIGATIO N UNDER THE SALE-DEED OR MOU TO MAKE ANY REFUND IN ANY CONTINGE NCY. 8. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN FAILING TO APPRECIATE THAT AS PER THE TERMS AND CONDI TIONS OF THE SALE DEEDS, THE ASSESSEE WAS NOT UNDER ANY OBLIGATION EITHER T O INCUR ANY DEVELOPMENT EXPENSES ORE TO REFUND ANY SUM TO THE BU YER AND, THEREFORE, THE RATIO IN THE CASE OF V.A. VASUMATI 123 ITR 94 AND IN THE 19 ITA NO.1167/PN/2013 CASE OF VALLIAMMAL, 127 ITR 713, WOULD NOT APPLY TO THE ASSESSEES CASE. 17. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY CHALLENG ED THE ORDER OF THE CIT(A). HE SUBMITTED THAT WHATEVER DOCUMEN TS WERE PRODUCED ARE POST FACT SCENARIO. HE SUBMITTED THAT TH E LIABILITY OF THE ASSESSEE TO PAY BACK DOES NOT ARISE OUT OF THE SA LE DEED. THE ASSESSEE IS THE OWNER OF THE MONEY RECEIVED. FURTHER, THE ASSESSEE IS A FAMILY MEMBER OF THE DIRECTOR OF THE COMPANY. REFERR ING TO THE COPY OF THE ASSESSMENT ORDER THE LD. DEPARTMENTAL REPR ESENTATIVE SUBMITTED THAT THE AO HAS THOROUGHLY DISCUSSED THE ISS UE AND REJECTED THE CLAIM OF REFUND OF THE AMOUNT. WHEN NOTHING IS MENTIONED IN THE SALE DEED, NO DEDUCTION OR ALLOWANCE CAN BE GRANTED WHILE COMPUTING CAPITAL GAIN. THERE WAS ALSO NO SU CH DIRECTION BY THE LD. ADDL.CIT U/S.144A. THE LD.CIT(A) HAS G ONE BY THE REAL INCOME THEORY AND ALLOWED THE CLAIM MADE BY THE ASSESSEE WHICH IS NOT PROPER UNDER THE FACTS AND CIRCUMSTANCES O F THE INSTANT CASE. HE SUBMITTED THAT WHEN THERE WAS NO MEN TION OF THE SOCALLED MOU DATED 16-08-2007 IN THE SALE DEED AND SINC E THE MOU WAS NEITHER REGISTERED NOR NOTARISED, THEREFORE, IT CLE ARLY INDICATES THAT THE SOCALLED MOU WAS AN AFTERTHOUGHT AND A SELF- SERVING DOCUMENT. FURTHER, WITHIN A SHORT SPAN OF TIME T HE ASSESSEE COULD NOT HAVE SPENT A HUGE SUM OF RS.10.80 C RORES. THEREFORE, WITHOUT APPRECIATING THE FACTS OF THE CASE PROP ERLY THE LD.CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE WHICH IS NOT PROPER UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. HE ACCO RDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BE REVERSED AND THAT OF THE AO BE RESTORED. 20 ITA NO.1167/PN/2013 18. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND WHILE SUPPORTING THE ORDER OF THE LD.CIT(A) SUBMITTED THAT IDENT ICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE CASE OF OTHER MEM BERS OF THE GROUP AND THE TRIBUNAL VIDE ITA NO.1163 TO 1166/PN/ 2013 ORDER DATED 12-10-2015 HAS DECIDED THE ISSUE AND DISMIS SED THE GROUNDS RAISED BY THE REVENUE, THEREFORE, THIS BEING A C OVERED MATTER THE GROUNDS RAISED BY THE REVENUE SHOULD BE DISMISSED. 19. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND T HE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND THE AO IN THE INSTANT CASE DENIED THE DEDUCTION OF COST OF SELLING AMOUNTING TO RS.10,79,82,061/- ON THE GROUND THAT IN THE AGREEMENT TO SALE WITH DSKDL THERE IS NO MENTION OF THIS COST TO BE INCURRE D BY THE ASSESSEE AND THAT THE AMOUNT HAS NOT BEEN QUANTIFIED A T ALL. WE FIND AN IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE CASE OF OTHER GROUP MEMBERS NAMELY SMT. SHILPA M. KULKARNI AND OTHER CONNECTED APPEALS VIDE ORDER DATED 12-10-2015 IN ITA N OS. 1163 TO 1166/PN/2013 HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY OBSERVING AS UNDER : 21. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND IN THE INSTANT CASE THE AO DENIED THE DEDUCTION OF COST OF SELLING AMOUNTING TO RS.8,30, 66,636/- ON THE GROUND THAT IN THE AGREEMENT TO SALE WITH DSKDL, THE RE IS NO MENTION OF THIS COST TO BE INCURRED BY THE ASSESSEE AND THAT THE AMOUNT HAS NOT BEEN QUANTIFIED AT ALL. FURTHER, THE AMOUNT TO BE EXPENDED FOR THE DEVELOPMENT IS A HUGE AMOUNT OF RS.8,30,66,636/- WHIC H WAS TO BE USED WITHIN ONE YEAR AND THE SAME WAS PREPARED ON THE BASIS OF ONLY ESTIMATES PREPARED BY THE ASSESSEE AND SUBSEQUENTLY REFUNDE D BY HER TO D.S. KULKARNI DEVELOPERS LTD. IT IS ALSO THE C ASE OF THE AO THAT WHEN COMPARED TO THE COST OF LAND, THE COST OF DEVELO PMENT IS ALMOST AS MUCH AS THE COST OF THE LAND. FURTHER, ACCORDING T O THE AO THE LANDS SOLD BY THE ASSESSEE TO D.S. KULKARNI DEVELOPERS LT D. ARE SCATTERED OVER LARGE EXPANSE OF LAND AND THE DEVELOPM ENT WORK AND 21 ITA NO.1167/PN/2013 EXPENSES ACCORDING TO THE AO IS ILLOGICAL. FURTHER, IN THE SALE DEED, THERE IS NO CLAUSE WHICH STATES THAT THE MONEY WILL BE REFUNDED IN THE EVENT OF SUCH DEVELOPMENT WORK NOT CARRIED OUT BY TH E ASSESSEE. FURTHER, ACCORDING TO THE AO, THE ENTIRE SCENARIO OF PURCHASE OF LANDS BY THE ASSESSEE AND THE ALMOST IMMEDIATE SALE WITHIN SHOR T SPAN OF TIME FOR HUGE SUMS SHOWS THAT IT IS APPARENT THAT BY PU RCHASING THE LANDS AT RS.17,67,80,000/- D.S. KULARNI DEVELOPERS LT D WAS ENHANCING THE VALUE OF THE LAND IN ITS BOOKS AND PASSING THE CONSI DERATION TO INTERESTED PARTIES, I.E. FAMILY MEMBERS, RELATIVES, MEM BERS OF SISTER CONCERNS, DIRECTORS ETC. IN VIEW OF THE ABOVE AND IN VIEW OF THE DETAILED REASONING GIVEN IN THE BODY OF THE ASSESSMENT O RDER, THE AO DISALLOWED THE AMOUNT OF RS.8,30,61,030/- BEING COST O F SELLING. WE FIND IN APPEAL THE LD.CIT(A) ALLOWED THE CLAIM OF D EDUCTION OF RS.8,30,66,636/-. 22. IT IS THE CASE OF THE REVENUE THAT SINCE THERE WAS NO MENTION OF THE SOCALLED MOU DATED 27-12-2007 IN THE SALE DEED WH ICH WAS EXECUTED SUBSEQUENTLY AND SINCE THE MOU WAS NEITHER RE GISTERED NOR NOTARIZED, THEREFORE, THE MOU IS NOTHING BUT AN AFTE RTHOUGHT AND SELF- CREATED AND SELF-SERVING DOCUMENT. FURTHER, IT IS AL SO THE CASE OF THE REVENUE THAT THE TOTAL EXPENSES OF RS.8,30,66,636/- WA S A MERE ESTIMATE WHICH HAD NEITHER BEEN QUANTIFIED IN THE SAL E DEED NOR IN THE MOU AND THEREFORE THE SAME COULD NOT BE TREATED AS EX PENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH T HE TRANSFER OF ASSETS U/S.48(1) OF THE I.T. ACT. 23. IT IS THE CASE OF THE LD. COUNSEL FOR THE ASSESSEE THA T WHEN SIMILAR MOU HAS BEEN ACCEPTED BY THE DEPARTMENT IN TH E CASE OF THE SISTER CONCERN OF THE ASSESSEE NAMELY D.S. KULKARNI AND C O. FOR A.Y. 2008-09, THE DEPARTMENT CANNOT SAY THAT THE MOU ENTE RED INTO BETWEEN THE ASSESSEE AND D.S.KULKARNI DEVELOPERS LTD. IS A SELF- SERVING DOCUMENT. FURTHER, M/S. D.S. KULKARNI DEVELO PERS LTD. HAS ALREADY REDUCED SUCH EXPENDITURE FROM THE WORK-IN-PR OGRESS. IT IS ALSO THE CASE OF THE LD. COUNSEL FOR THE ASSESSEE THAT UND ER IDENTICAL FACTS AND CIRCUMSTANCES THE TRIBUNAL IN THE CASE OF SH IRISH D. KULKARNI VIDE ITA NO.709/PN/2012 DATED 28-08-2014 FOR A.Y. 2 008-09 HAS DISMISSED THE APPEAL FILED BY THE REVENUE. THEREFORE, THIS BEING A COVERED MATTER THE APPEAL FILED BY THE REVENUE HAS T O BE DISMISSED. 24. WE FIND MERIT IN THE ARGUMENTS ADVANCED BY THE L D. COUNSEL FOR THE ASSESSEE. FROM THE COPY OF THE ASSESSMENT ORDER IN THE CASE OF M/S. D.S. KULKARNI AND CO. FOR A.Y. 2008-09 WE FIND THERE IS NO ADDITION/DISALLOWANCE MADE BY THE AO ON ACCOUNT OF SU CH COST OF SELLING ALTHOUGH UNDER IDENTICAL MOU ENTERED INTO TH E ASSESSEE HAS REFUNDED SUCH AMOUNT TO D.S. KULKARNI DEVELOPERS LTD. FROM THE COPY OF THE LETTER ADDRESSED TO THE AO DATED 02-11-20 10, A COPY OF WHICH IS PLACED AT PAPER BOOK PAGES 269 TO 279, WE FI ND THE ASSESSEE HAS SUBMITTED ALMOST IDENTICAL SUBMISSIONS BEFORE THE AO I N RESPECT OF SUCH QUERY RAISED BY THE AO IN THAT CASE. CLAUSE (1 ) OF THE REPLY GIVEN BY D.S. KULKARNI & CO. READ AS UNDER : WITH REFERENCE TO CAPTIONED SUBJECT WE WOULD LIKE T O SUBMIT AS UNDER : 22 ITA NO.1167/PN/2013 AS ON 31-03-2008 PROVISION OUTSTANDING IS RS.95,76,016,2 40/- OUT OF WHICH PROVISION RS.54,82,24,680/- IS DEBITED FOR THIS Y EAR TOWARDS EXPENSES TO BE INCURRED FOR DEVELOPMENT OF LAND AT FU RSUNGI. (1) DURING THE F.Y.2007-08 WE HAVE SOLD LANDS AT MOUJE FU RSUNGI TO D.S. KULKARNI DEVELOPERS LTD. (HEREINAFTER REFERRED TO AS DSKDL) AND RECEIVED CONSIDERATION OF RS.87,17,34,375/-, WHIC H WAS REFLECTED ON CREDIT SIDE UNDER THE HEAD SALES ACCOUNTS. WE HAD AGREED TO SELL THE DEVELOPED LAND BY CARRYING SOME DE VELOPMENT WORK IN THE LANDS WHICH WERE SOLD/TRANSFERRED/ASSIGNED T O DSKDL. THEREFORE, AFTER ESTIMATION FOR THE EXPENSES W E HAVE DEBITED THE LIABILITY PROVISION OF RS.54,82,24,680/- ABOUT WHICH IN THE LAST HEARING, YOU HAVE ASKED FOR JUSTIFICATION. F OR THIS PURPOSE, THE FACTS OF THE CASE ARE TO BE PROPERLY APPRECIATED AND WHICH ARE STATED HEREUNDER - . . . . . . . . . . . . . . . . 25. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, THE MOU FILED BY THE ASSESSEE WAS ACCEPTED BY THE AO AND THERE I S NO ADDITION/DISALLOWANCE MADE IN THE BODY OF THE ASSESSMENT ORDER, A COPY OF WHICH IS PLACED AT PAGES 349 TO 359. THEREFO RE, WE FIND MERIT IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSE THAT ONCE SIMILAR TRANSACTION HAS BEEN ACCEPTED IN ONE CASE, THE DEPARTM ENT CANNOT DEVIATE FROM THE SAME PRINCIPLE IN OTHER CASES. 26. WE FIND THE HONBLE SUPREME COURT IN THE CASE O F BERGER PAINTS INDIA LTD. VS. CIT REPORTED IN [2004] 266 ITR 99 (SC) HAS OBSERVED AS UNDER : . . . . . . . . . . . . . . . . . . . . . . . . . . . . IN VIEW OF THE JUDGMENTS OF THIS COURT IN UNION OF IN DIA V. KAUMUDINI NARAYAN DALAL [2001] 249 ITR 219, CIT V. NARENDRA DOSHI [2002] 254 ITR 606 AND CIT V. SHIVSAGAR ESTATE [2002] 257 ITR 59, THE PRINCIPLE ESTABLISHED IS THAT IF THE REVENUE HAS NOT CH ALLENGED THE CORRECTNESS OF THE LAW LAID DOWN BY THE HIGH COURT AN D HAS ACCEPTED IT IN THE CASE OF ONE ASSESSEE, THEN IT IS NOT OPEN TO THE REVENUE TO CHALLENGE ITS CORRECTNESS IN THE CASE OF OTHER ASSESSEES, WI THOUT JUST CAUSE. 27. WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE C ASE OF SHRI VIPUL KRISHNA ASHTEKAR VIDE ITA NO.1062/PN/2013 ORDER DATED 30- 12-2014 FOR A.Y. 2009-10 AND OTHER CONNECTED APPEAL S AT PARA 15 OF THE ORDER HAS OBSERVED AS UNDER : 15. IN THE AFORESAID BACKGROUND, THE RATIO OF THE LAW ENUNCIATED BY THE HON'BLE SUPREME COURT IN THE CASES OF (I) UNION O F INDIA VS. KAUMUDINI NARAYAN DALAL, (2001) 249 ITR 219 (SC); ( II) CIT VS. NARENDRA DOSHI, (2002) 254 ITR 606 (SC); AND, (III) CIT VS. SHIVSAGAR ESTATE, (2002) 257 ITR 59 (SC) AND IN THE CASE OF BER GER PAINTS INDIA LTD. (SUPRA) CLEARLY APPLIES. NOTABLY, THE REVENUE HA S NOT 23 ITA NO.1167/PN/2013 DEMONSTRATED ANY REASON IN THE PRESENT CASES SO AS TO JUST IFY DEPARTURE OF THE DEPARTMENT FROM ITS ACCEPTED STAND I N SIMILARLY PLACED OTHER CASES WHERE CAPITAL GAINS IN PURSUANCE TO AGREEMENT WITH MTDC DATED 26.03.1999 HAVE BEEN TAXED OVER THE YEARS AND NOT IN ASSESSMENT YEAR 1999- 2000. IT IS ALSO NOT DENIED THAT THE ASSESSEE HAS DECLARED CAPITAL GAINS IN THE RETURN FOR ASSESSMENT Y EAR 2003-04 ONWARDS ON THE BASIS OF THE ENTITLEMENT CERTIFICATES ISSU ED BY MTDC IN TERMS OF THE AGREEMENT DATED 26.03.1999. IN- FACT , IN THE CASE TWO OF THE APPELLANTS BEFORE US, NAMELY, S/SHRI AMOL KRI SHNA ASHTEKAR AND ATUL KRISHNA ASHTEKAR, THE ASSESSING OFFICER HAS MADE SCRUTINY ASSESSMENT FOR ASSESSMENT YEAR 2007-08 U/S 143(3) DATED 17.12.2009 WHEREIN THE CAPITAL GAINS DECLARED BY THE ASSESSEE IN THE RETURNS OF INCOME HAVE BEEN ASSESSED. OSTENSIBLY, SUCH ASSESSM ENTS, WHICH ARE IN LINE WITH THE STAND OF THE DEPARTMENT I N THE CASES OF OTHER FARMERS WHO ARE SIMILARLY PLACED AS THE ASSESSEE, IT SELF SHOW THAT IN THE IMPUGNED PROCEEDINGS, REVENUE HAS DEPARTE D FROM ITS ACCEPTED POSITION. THERE IS NO JUSTIFICATION BROUGHT O UT BY THE REVENUE FOR SUCH A DEPARTURE. THEREFORE, ON THE PRIN CIPLE OF UNIFORMITY OF APPROACH WHICH IS REQUIRED TO BE ADOPT ED BY THE REVENUE IN RELATION TO SIMILARLY PLACED ASSESSEES AS LAID DOWN BY THE HON'BLE SUPREME COURT, IN OUR VIEW, THE ACTION OF T HE INCOME-TAX AUTHORITIES IN THE PRESENT CASE TO INITIATE PROCEEDING U/S 147/148 TO ASSESS CAPITAL GAINS ON THE BASIS OF THE AGREEMENT DATED 2 6.03.1999 WITH MTDC IS NOT JUSTIFIED. THEREFORE, WHEN THE AO IN THE CASE OF D.S. KULKARNI & CO. HAS ALSO RAISED SIMILAR QUERIES AS RAISED BY THE PRESENT AO AND A FTER ELABORATELY RECORDING THE VARIOUS DETAILS SUBMITTED BY THE ASSESSEE IN THE ORDER SHEET, COPIES OF WHICH ARE PLACED AT PAGES 3 29 TO 343 OF THE PAPER BOOK HAS ACCEPTED THE MOU AS GENUINE AND NO ADDITION/DISALLOWANCE WAS MADE ON ACCOUNT OF SUCH DEVE LOPMENT EXPENDITURE WHICH WAS CLAIMED BY THE ASSESSEE AS COST OF SE LLING, THEREFORE, WE FIND NO REASON AS TO HOW AND WHY THE AO IN THE CASE OF THE PRESENT ASSESSEE HELD THAT THE SOCALLED MOU WAS AN AFT ERTHOUGH AND SELF-CREATED AND SELF-SERVING DOCUMENT ESPECIALLY W HEN THE ORDER PASSED IN THE CASE OF D.S. KULKARNI & CO. IS PRIOR TO T HE ASSESSMENT ORDER PASSED IN THE INSTANT CASE AND THE SAME HAS NOT BEE N DISTURBED BY THE CIT U/S.263 OF THE I.T. ACT TILL NOW. 28. FURTHER, THE ALLEGATION OF THE REVENUE THAT D.S . KULKARNI DEVELOPERS LTD. WAS ENHANCING THE VALUE OF THE LAND I N ITS BOOKS AND PASSING THE CONSIDERATION TO INTERESTED PARTIES, I.E. FA MILY MEMBERS, RELATIVES, MEMBERS OF SISTER CONCERNS AND DIRECTORS ETC. IS ALSO NOT CORRECT SINCE D.S. KULKARNI DEVELOPERS LTD. BY PASSING A JOURNAL ENTRY HAS REDUCED SUCH DEVELOPMENT EXPENSES FROM THE WORK-IN- PROGRESS. THE JOURNAL VOUCHER PASSED BY DSKDL ON 30-09-2009 IS PLACED AT PAPER BOOK PAGE 259 ACCORDING TO WHICH THE DEVELOPM ENT EXPENSES HAS BEEN REDUCED TO THE EXTENT OF RS.8,30,61,030/-. IT IS ALSO A FACT THAT THE ASSESSEE HAS REFUNDED THE AMOUNT OF RS.8,30,61,0 30/- TO M/S. D.S. KULKARNI DEVELOPERS LTD. AND THE SAME HAS BEEN C REDITED IN THEIR BANK ACCOUNT. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SUSHILA SHANTILAL JHAVERI (SUPRA)HAS HELD THAT SUBSEQUENT EVE NTS OR DEVELOPMENTS OCCURRING PENDENT LITE CAN BE CONSIDERED IF THEY HAVE THE EFFECT OF OVERSHADOWING THE ORIGINAL CASE FOUND BY THE COURT BELOW. THE RELEVANT OBSERVATIONS OF THE HONBLE COUR T READ AS UNDER : 24 ITA NO.1167/PN/2013 HAVING HEARD MR. JHAVERI, LEARNED COUNSEL FOR THE P ETITIONER, HAVING SEEN THE IMPACT OF THE SUBSEQUENT EVENTS ON THE OPERATI VE PART OF THE IMPUGNED ORDER, THE SUBMISSION MADE BY MR. JHAVERI NEE DS ACCEPTANCE. THE APEX COURT IN THE CASE OF GAYA PRASAD , AIR 2001 SC 803 RULED THAT SUBSEQUENT EVENTS OR DEVELOPMENTS OCCURR ED PENDENTE LITE CAN BE CONSIDERED; IF IT HAS THE EFFECT OF OVERSH ADOWING THE ORIGINAL CASE FOUND BY THE COURT BELOW. IN THE CASE OF HASMAT R AI V. RAGHUNATH PRASAD, AIR 1981 SC 1711 THE APEX COURT HELD THAT TH E MAGNITUDE OF SUBSEQUENT EVENTS OR THE DIMENSION THEREOF SHOULD BE SUCH THAT IT SHOULD HAVE THE EFFECT OF COMPLETELY CHANGING THE CO LOUR OF THE ORIGINAL FINDINGS. IN OUR CONSIDERED VIEW, THE SUBSEQUE NT EVENTS BROUGHT ON RECORD HAVE COMPLETELY CHANGED THE COLOU R OF THE ORIGINAL FINDINGS EXTRACTED IN PARA. 2. SUPRA. IN THE PECULIA R FACTS AND CIRCUMSTANCES OF THIS CASE, WE FEEL THAT IT WOULD BE NE CESSARY TO DIRECT THE COMMISSIONER OF LNCOME-TAX TO RECONSIDER THE APPLI CATION FILED AND THE SUBMISSIONS MADE BY THE PETITIONER ON ITS OWN ME RITS IN THE LIGHT OF THE SUBSEQUENT EVENTS SINCE THEY HAVE DISLODGED THE VALIDITY OF THE ADVERSE FINDINGS SUFFERED BY THE PETITIONER. 29. WE FURTHER FIND THE COORDINATE BENCH OF THE TRI BUNAL IN THE CASE OF ACIT VS. SHIRISH D. KULKARNI VIDE ITA NO.709/ PN/2012 HAS ALREADY DISCUSSED THE ISSUE AND DISMISSED THE APPEAL FILED BY THE REVENUE BY OBSERVING AS UNDER : 4. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. THE LD. COUNSEL SUBMITS THAT THE ASSESSEE HAD NEGOTIATED WITH THE LANDLORDS AT VILLAGE-FURSUNGI, TAL.-HAVELI, DISTT.-PUNE FOR PUR CHASE OF LANDS. THE ASSESSEE PURCHASED THE AGRICULTURAL LAND DURING THE F.Y. 2007-08 AT VILLAGE-FURSUNGI. THE ASSESSEE ARGUES THAT THE ASSESSEE PURC HASED THE LAND ADMEASURING 234.5R AND THE COST OF ACQUISITION TO THE ASSESSEE WAS TO EXTEND OF RS.3,36,23,900/-. THE ASSESSEE ALSO PAID THE BROKERAGE OF RS.1,50,000/- WHICH DETAILS WERE SUBMITTE D BEFORE THE ASSESSING OFFICER. HE SUBMITS THAT D.S. KULKARNI DEVELOP ERS LTD., WHICH IS RENOWNED BUILDER AND DEVELOPER IN PUNE WAS D ESIROUS TO PURCHASE ABOUT 100 TO 120 ACRES OF CONTIGUOUS LANDS FO R DEVELOPMENT OF THEIR SEZ PROJECT AT VILLAGE-FURSUNGI, TAL.-HAVEL I, DISTT.-PUNE. THE ASSESSEE APPROACHED D.S. KULKARNI DEVELOPERS LTD. AND OF FERED TO ASSIGN THE ASSESSEES RIGHTS OF THE AGRICULTURAL LANDS ACQU IRED IN VILLAGE-FURSUNGI. THE D.S. KULKARNI DEVELOPERS LTD. (IN SHORT DSKDL) OFFERED HANDSOME CONSIDERATION FOR SALE OF LA NDS PROVIDED THE ASSESSEE UNDERTAKES THE WORK OF BASIC DEVELOPMENT OF THE PROPERTY AS THE LANDS WERE USED FOR AGRICULTURAL PURPO SES AND WERE NOT SUITABLE FOR SEZ PROJECT. HE SUBMITS THAT AS PER U NDERSTANDING BETWEEN THE ASSESSEE AND DEVELOPER, THE SAID DSKDL WAS IN TERESTED IN PURCHASING THE DEVELOPED LAND SUBJECT TO 1) REMOVING & DISPOSING BUNDS, OLD HUTS, COW SHEDS AND HO USES. 2) REMOVING GRASS, SHRUBS, DEBRIS, DISPOSING CARTING AWAY AND CLEANING. 3) GOVERNMENT & PRIVATE MEASUREMENT OF LAND (MOJANI) 4) CONSTRUCTION OF ENTIRE ROAD NETWORK. 25 ITA NO.1167/PN/2013 5) CONSTRUCTION OF RETAINING/COMPOUND WALL 6) PLUMBING DEVELOPMENT WORKS. 7) EXTERNAL DRAINAGE DEVELOPMENT WORK, STORM WATER DEVELOPMENT WORK ETC. 5. AFTER DEAL WAS FINALIZED THERE WAS A MOU BETWEEN T HE ASSESSEE AND DSKDL DATED 26-09-2007 AND IT WAS THE CONTRACTUA L OBLIGATION OF THE ASSESSEE TO COMPLETE THE ENTIRE DEVELOPMENT WORK ME NTIONED HERE-IN-ABOVE. HE SUBMITS THAT FOR DOING ALL THESE WO RKS AND AFTER DEVELOPMENT THE ASSESSEE WAS OFFERED THE GOOD PURCHASE PR ICE FOR THE LAND. HE SUBMITS THAT SUBSEQUENTLY THE ASSESSEE EXECUTED SALE DEED IN FAVOUR OF THE DEVELOPER I.E. DSKDL, TRANSFERRING THE TITLE IN LAND ADMEASURING 204R FOR THE CONSIDERATION OF RS.6.63 CROR ES AND THE ASSESSEE RETAINED ABOUT LAND ADMEASURING 30.5R WITH HIM. THE ASSESSEE MADE THE DETAILED ESTIMATE FOR THE DEVELOPMENT WORK TO BE EXECUTED BY THE ASSESSEE ON THE SAID LAND AND AS PER THE SAID ESTIMATE THE ASSESSEE WAS TO INCUR THE EXPENDITURE TO THE EXTENT OF RS.2,47,65,600/- WHICH DETAILS WERE FURNISHED TO THE A SSESSING OFFICER. HE ARGUES THAT THE ASSESSING OFFICER ACCEPTED THE QUANTUM OF DEVELOPMENT WORK AS WELL AS THE CONTENT OF THE MOU. HE ARGUES THAT AS PER THE MOU BETWEEN THE ASSESSEE AND DEVELOPER DATED 26-09- 2007 THERE WERE CONDITIONS FOR GIVING THE HIGHER CON SIDERATION TO THE ASSESSEE AND HENCE, OR IN OTHER WORDS THE HIGHER CONSIDER ATION OFFERED BY THE DSKDL WAS SUBJECT TO THE IMPROVEMENT A ND DEVELOPMENT OF THE PLOT OF LAND SUITABLE FOR SEZ PRO JECT. HE ARGUES THAT AS PER CLEAR UNDERSTANDING BETWEEN THE ASSESSEE AND DSKDL THE ASSESSEE HAS TO MAKE THE SAID LAND COMPATIBLE TO THE SEZ PROJECT. 6. THE LD. COUNSEL SUBMITS THAT THE ASSESSEE FILED BEFORE THE LD. CIT(A) THE DETAILS OF THE EXPENDITURE TO THE EXTENT OF RS.1,62,33,447/- WHICH WERE ACTUALLY INCURRED WHEN THE HEARING BEFOR E THE LD. CIT(A) WAS GOING ON. HE ARGUES THAT SUBSEQUENTLY, THE DEVELOP ER CHANGED THE PROJECT AND MADE IT SPECIAL TOWNSHIP PROJECT. DUE T O CHANGE IN THE PROJECT, THE ASSESSEE WAS INSTRUCTED TO HOLD THE DEVELOPM ENT WORK. HE ARGUES THAT THE CONSIDERATION FIXED FOR THE SALE OF THE LAND WAS LINKED WITH THE DEVELOPMENT EXPENDITURE WHICH WAS TH E ASSESSEES CONTRACTUAL LIABILITY AND HENCE, THE ASSESSEE WAS ENTITL ED TO CLAIM THE SAME EXPENDITURE AS A DEDUCTION. LD. COUNSEL SUPPORTED THE ORDER OF THE LD. CIT(A). 7. PER CONTRA, THE LD. DR VEHEMENTLY ARGUES THAT IN THE FINAL SALE DEED BETWEEN THE ASSESSEE AND THE DEVELOPER THERE IS NO WHISPER OF THE MOU BETWEEN THE ASSESSEE AND DSKDL DATED 26-09-2007 . HE ARGUES THAT EVEN PRESUMING THE ASSESSEE HAS INCURRED THE E XPENDITURE TO THE EXTENT OF RS.1,62,33,447/- BUT SO FAR AS REDUCI NG AN AMOUNT OF RS.85,32,153/- FROM THE SALE CONSIDERATION IS NOT PRO PER AS ADMITTEDLY THE ASSESSEE HAS NOT INCURRED THE SAID EXPENDITURE. HE P LEADED FOR RESTORING THE ORDER OF THE ASSESSING OFFICER. 8. ON PERUSAL OF THE ASSESSMENT ORDER, WE FIND THAT THE ASSESSING OFFICER HAS NOT DISCUSSED THE ISSUE IN DETAIL BUT ADOPTE D SHORTCUT BY DISALLOWING THE ENTIRE CLAIM OF EXPENDITURE BY WRITI NG 5-6 LINES. WE FIND THAT THE LD. CIT(A) HAS IN DETAIL DEALT WITH TH E ISSUE AND ALSO 26 ITA NO.1167/PN/2013 NARRATED THE RELEVANT FACTS. IN THIS CASE NOWHERE IT IS DISPUTED THAT THE ASSESSEE HAS SOLD THE LANDS TO THE DSKDL BUT THE SOLITARY C ONTROVERSY IS IN RESPECT OF CONTRACTUAL LIABILITY ON THE ASSESSEE F OR CARRYING OUT DEVELOPMENT WORKS ON THE SAID LAND AS THOSE LANDS WERE A GRICULTURAL LAND, WHEREBY THE SAID LAND WOULD BE COMPATIBLE FOR THE PROJECT OF THE DSKDL WHICH WAS INITIALLY SEZ PROJECT. IT IS STATED THAT SUBSEQUENTLY THE DSKDL DECIDED NOT TO GO WITH THE SEZ PROJECT BU T DECIDED TO GO WITH THE SPECIAL TOWNSHIP PROJECT AND HENCE, THE ASSESSE E WAS REQUESTED TO WITHHOLD THE FURTHER DEVELOPMENT. THE ASSESSEE HAS PRODUCED THE DETAILS OF THE EXPENDITURE ON THE SAID L AND BEFORE THE LD. CIT(A) TO THE EXTENT OF RS.1,62,33,447/- WHICH HAS N OT BEEN CONTROVERTED BEFORE US ONLY ARGUMENT OF THE REVENUE IS THAT THE SAID EXPENDITURE IS INCURRED BY THE ASSESSEE NOT DURING THE A SSESSMENT YEAR. 9. WE FIND THAT THE IDENTICAL ISSUE HAS COME FOR THE C ONSIDERATION BEFORE THE ITAT, MUMBAI IN THE CASE OF KALPATARU CON STRUCTION VS. DCIT (2007) 13 SOT 194 (MUM) AND IT IS HELD THAT THE CONSIDERATION OF THE SUBSEQUENT EVENTS ALSO RELEVANT FOR COMPUTATION OF THE CAPITAL GAIN. ANOTHER ARGUMENT OF THE REVENUE IS THAT THERE IS NO MENTION OF THE MOU DATED 26-09-2007 IN THE FINAL SALE DEED. IT IS TRUE THAT THE SAID MOU WAS NOT REGISTERED BUT AT THE SAME TIME IT IS A LSO NOT DISPUTED THAT THE SAID MOU EXECUTED ON THE NON-JUDICI AL STAMP PAPER OF RS.100/- COPY PLACED AT PAGE NOS. 46 TO 52 OF THE COMPILATION. WE ALSO FIND THAT THE LD. CIT(A) HAS GIVEN THE CATEGO RICAL FINDING THAT THERE WAS CONTRACTUAL OBLIGATION ON THE ASSESSEE TO DO T HE DEVELOPMENT AND HENCE, TO THE EXTENT OF RS.1,62,33,4 47/- WHICH WERE SPENT BY THE ASSESSEE UP TO 24-01-2011, THE LD. CIT(A) ALLOWED THE CLAIM OF DEDUCTION TO THE ASSESSEE. IN RESPECT OF THE B ALANCE AMOUNT OF RS.85,32,153/-, THE SAME WAS DIRECTED TO BE REDUCED FROM THE SALE CONSIDERATION FOR THE REASON THAT THE HIGHER CONSIDERA TION OFFERED BY THE BUYER OF THE LAND I.E. DSKDL WAS SUBJECT TO THE T ERMS OF DEVELOPMENT OF THE INFRASTRUCTURE LIKE ROADS, LEVELIN G AND OTHER IMPROVEMENTS ETC. AFTER GIVING OUR ANXIOUS CONSIDERA TION TO THE ENTIRETY OF THE FACTS, WE ARE OF THE OPINION THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LD. CIT(A). WE, ACC ORDINGLY, CONFIRM THE SAME. 30. SINCE THE AO IN THE CASE OF ONE OF THE SISTER CON CERNS NAMELY D.S. KULKARNI & CO. HAS ACCEPTED SUCH MOU AS GENUINE A ND NO ADDITION/DISALLOWANCE HAS BEEN MADE ON ACCOUNT OF SUCH REFUND OF EXPENSES TO D.S. KULKARNI DEVELOPERS LTD. AND SINCE D.S . KULKARNI DEVELOPERS LTD. HAS ALSO REDUCED SUCH EXPENDITURE FROM ITS WORK-IN- PROGRESS AND CONSIDERING THE FACT THAT THE TRIBUNAL IN THE CASE OF ANOTHER RELATED PERSON OF THE ASSESSEE NAMELY SHRI SHIRI SH D. KULKARNI HAS ALREADY DISMISSED THE APPEAL FILED BY THE REVENUE UNDER IDENTICAL FACTS AND CIRCUMSTANCES, THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) IN ALLOWING THE CLAIM OF DE DUCTION OF RS.8,30,66,636/- IN THE COMPUTATION OF SHORT TERM CAP ITAL GAINS ARISING ON SALE OF LAND ON ACCOUNT OF EXPENSES TO BE INCURRED AS PER THE MOU TOWARDS DEVELOPMENT OF PROPERTY. WE ACCORDI NGLY UPHOLD THE SAME. THE GROUNDS RAISED BY THE REVENUE ARE ACCOR DINGLY DISMISSED. 27 ITA NO.1167/PN/2013 20. SINCE THE FACTS OF THE INSTANT CASE ARE IDENTICAL TO THE FACTS OF THE CASES DECIDED BY THE TRIBUNAL CITED (SUPRA) THEREFORE, FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF OTHER GROUP MEMBERS AND IN ABSENCE OF ANY CONTRARY MA TERIAL BROUGHT TO OUR NOTICE BY THE LD. DEPARTMENTAL REPRESEN TATIVE AGAINST THE ORDER OF THE TRIBUNAL, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) ALLOWING THE CLAIM OF COST OF SELLING AMOUNTING TO RS.10,79,82,051/-. ACCORDINGLY, THE SAME IS UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 21. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15-01-2016. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE ; DATED : 15 TH JANUARY, 2016. ( )'+ , / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. % ( ) / THE CIT(A)-II, PUNE 4. % , / THE CIT-II, PUNE 5. ( ++, , , , / DR, ITAT, B PUNE; 6. 0 / GUARD FILE. / BY ORDER , // TRUE COPY // ( + //TRUE COPY/ / 23 + , / SR. PRIVATE SECRETARY ,, / ITAT, PUNE