TATA RALTY & INFRASTRUCTURE LTD, MUMBAI V. ACIT 2(3), MUMBAI

MA 299/MUM/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4841 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 29-12-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AARATI VISSANJI
• Section: 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI C.N. PRASAD , JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER M.A. NO. 299/MUM./2020 ( ARISING OUT OF ITA NO. 3929 / MUM . / 20 13 ) ( ASSESSMENT YEAR : 20 08 09 ) TATA REALTY & INFRASTRUCTURE LTD. ELPHINSTONE BUILDING, 2 ND FLOOR 10, VEER NARIMAN ROAD MUMBAI 400 001 PAN AACCT6242L . APPLICANT (ORIGINAL RESPONDENT) V/S ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 2(3), MUMBAI . RESPONDEN T (ORIGINAL APPELLANT) ASSESSEE BY : MS. AARATI VISSANJI REVENUE BY : MS. USHA GAIKWAD DATE OF HEARING 05 . 03 .20 21 DATE OF ORDER 19.05.2021 O R D E R PER S. RIFAUR RAHMAN , A.M. BY THIS MISC. APPLICATION, THE ASSESSEE SEEKS RECTIFICATION OF CERTAIN ERRORS WHICH CREPT INTO THE ORDER DATED 26 TH JUNE 2020, PASSED IN ITA NO.3929/MUM./20123, BY THE TRIBUNAL. 2. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT THOUGH THE ORIGINAL APPEAL FILED BY THE REVENUE WAS DIS MISSED, HOWEVER, SHE SUBMITTED THAT CERTAIN 2 TATA REALTY & INFRASTRUCTURE LTD. ERRORS HAVE CREPT INTO THE AFORESAID ORDER PASSED BY THE TRIBUNAL WHICH NEEDS RECTIFICATION. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS NOT RAISED ANY OBJECTION TO THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. 3. WE NOW PROCEED TO RECTIFY THE ERRORS, AS BROUGHT TO OUR NOTICE BY THE LEARNED COUNSEL FOR THE ASSESSEE, WHICH CREPT IN THE AFORESAID TRIBUNAL ORDER. 4. THE FIRST ERROR , AS POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE IS, IN THE ORDER DATED 26 TH JUNE 2020, AT P AGE 6 / PARA 7 / AT LINE NO.3, THERE IS A WRONGLY MENTION OF 49.16 ACRES WHICH IS TO BE REPLACED AND CORRECTLY MENTIONED AS 517 ACRES . THE JUSTIFICATION GIVEN BY THE LEARNED COUNSEL F OR THE ASSESSEE IN ITS MISC. APPLICATION FOR REPLACEMENT OF THE ABOVE FIGURE IS REPRODUCED BELOW: THE APPLICANT RESPECTFULLY SUBMITS THAT THE AMOUNT OF RS. 1700 CRORES WAS ADVANCED TO UNITECH LTD. FOR ACQUISITION OF 517 ACRES OF LAND SUBJECT TO DUE DILIG ENCE. FINALLY, 49.16 ACRES OF LAND WAS PURCHASED FOR RS. 692 CRORES AND THE BALANCE ADVANCE WAS REFUNDED BY UNITECH LTD. WITH INTEREST IN A.Y.2009 - 10. THESE FACTS HAVE BEEN RECORDED BY THE CIT(A) AT PARA 1.3 ON PAGE 1 AND 2 OF HIS ORDER. SUB - POINT NO. 1 OF PARA 1.3 OF THE CIT(A)'S ORDER STATES THAT AS PER THE TERMS OF THE FIRST MEMORANDUM OF UNDERSTANDING ('MOU'), THE APPLICANT HAD PAID INR 1700 CRORES TOWARDS PART OF PURCHASE PRICE FOR PURCHASE OF 517 ACRES OF LAND. SUB - POINT NO. 7 OF PARA 1.3 STATES THAT AS PER THE SECOND MOU, THE APPLICANT AGREED TO PURCHASE 49.16 ACRES OF LAND FOR CONSIDERATION OF INR 692 CRORES. THE CIT(A) HAS ALSO REFERRED TO THIS FACT IN THE CONCLUDING PARA 1.4.2 OF HIS ORDER . 3 TATA REALTY & INFRASTRUCTURE LTD. 5. THE SECOND ERROR WHICH CREPT AT P ARA 7 / PAGE 6, IT IS M ENTIONED THAT IT IS FACT THAT UNITEC GROUP IS SUBSIDIARY OF TAT GROUP COMPANIES AND THE GROUP ENTERED INTO AN AGREEMENT WITH UNITEC GROUP TO ACQUIRE THE SHARES AND LAND IN THEIR POSSESSION [ EMPHESIS SUPPLIED ] . IN THIS REGARD, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT UNITEC GROUP IS NOT A SUBSIDIARY OF TATA GROUP COMPANIES AND REQUESTED FOR MAKING NECESSARY RECTIFICATION . SHE MADE FOLLOWING SUBMISSIONS FOR MAKING SUCH RECTIFICATION: - THE APPLICANT RESPECTFULLY SUBMITS THAT UNITECH GROUP IS NOT A SUBSIDIARY OF TATA GROUP. UNITECH LIMITED IS AN INDEPENDENT LISTED COMPANY AND IS UNRELATED TO THE TATA GROUP. HOWEVER, THE LEARNED DEPT. REPRESENTATIVE WRONGLY CONTENDED IN THE COURSE OF THE H EARING THAT THE APPLICANT AND UNITEC H LTD ARE RELATED PARTIES, WHICH WAS UNSUPPORTED BY ANY EVIDENCE AND COUNTERED BY THE AUTHORISED REPRESENTATIVE OF THE APPLICANT . 6. THE LAST ERROR WHICH CREPT IN PARA 7 AT PAGE 7, AT LINE NO.8, THE WORD NOT NEEDS TO BE REMOVED AND AT LINE NO.8, THE WORD RELEVANT NEEDS TO BE REPLACED BY THE WORD IRRELEVANT . 7. WE FIND THAT ALL THE AFORESAID THREE ERRORS HAVE BEEN CREPT AT PARA 7 OF THE ORDER. THEREFORE, I N VIEW OF THE ABOVE CORRECTIONS SUGGESTED BY THE LEA RNED COUNSEL FOR THE ASSESSEE WHICH ARE APPARENT ON RECORD, WE PROCEED TO RECTIFY ALL THE AFORESAID ERROR S APPEARING AT PARA 7 . T HE PARA 7 OF THE ORDER IS HEREBY SUBSTITUTED AND MAY PLEASE BE READ AS UNDER: 4 TATA REALTY & INFRASTRUCTURE LTD. 7. CONSIDERED THE RIVAL SUBMISSIONS AND MATER IAL PLACED ON RECORD, WE NOTICE FROM THE RECORD THAT THE ASSESSEE ENTERED INTO AGREEMENT WITH M/S. UNITEC TO ACQUIRE 517 ACRES OF LAND AND ACCORDINGLY PAID ` 1700 CRORES ON 10.10.2007. THE UNITECH GROUP OWNED THE ABOVE SAID LAND AND IT HAD TO FACILITATE THE DUE DILIGENCE TO COMPLETE THE TRANSACTION. BUT THE UNITEC GROUP COULD MANAGE TO COMPLETE THE DUE DILIGENCE ONLY TO THE EXTENT OF THE LAND WORTH OF ` 600 CR ORES. IT IS FACT THAT TATA GROP COMPANIES ENTERED INTO AN AGREEMENT WITH UNITEC GROUP TO ACQUIRE THE SHARES AND LAND IN THEIR POSSESSION. IT HAD ARRANGED FUNDS THROUGH ISSUE OF RIGHTS SHARES ETC. THESE FUNDS WERE MADE AVAILABLE TO THE ASSESSEE. FROM THE REC ORDS WE NOTICE THAT IT WAS SUBMITTED BEFORE CITCA) THAT THE FUNDS WERE ARRANGED BY TATA SONS AND NO INTEREST BEARING FUNDS WERE UTLILIZED TO ADVANCE. IN ORDER TO FACILITATE THE TRANSFER F LANDS FROM UNITEC GROUP TO THE ASSESSEE, IT WAS AGREED TO CONDUCT DU E DILIGENCE AND ACCORDINGLY MOU WAS ENTERED. WE NOTICE THAT A O OBSERVED THAT THESE FUNDS WERE UTILIZED TO ACQUIRE THE UAS LICENSE AND IT IS ONLY MAKE TO BELIEVE TRANSACTION. WE DO AGREE WITH THE AO THAT HOW THE FUNDS WERE UTILIZED BY UNITEC GROUP IS IRRELE VANT AND WHAT IS RELEVANT IS, WHETHER UNITEC HELD THE LANDS AS PER MOU ON THE DATE OF TRANSACTION AND WHETHER DUE DILIGENCE ACTIVITIES WERE CARRIED ON OR NOT . IN THE RECORDS, WE FOUND THAT THERE IS EVIDENCE OF EXISTENCE OF ABOVE SAID CONDITIONS AND NO CONT RARY EVIDENCE WAS BROUGHT ON RECORD BY REVENUE. IN OUR VIEW, THE TRANSACTION ENTERED BY THE ASSESSEE SEEMS TO BE GENUINE AND WITHIN THE BUSINESS DEALINGS. IT IS ALSO RELEVANT TO NOTE THAT AS SOON AS THE PERIOD GIVEN FOR CARRYING OUT DUE DILIGENCE OVER, ASS ESSEE MODIFIED THE MOU ENTERED AND ACCORDINGLY PURCHASED ONLY THOSE LANDS WHICH ARE AS PER AGREEMENT TERMS AND FOR THE BALANCE ADVANCED AMOUNT CLAIMED INTEREST @18.5%. 8. T HE ORDER DATED 26 TH JUNE 2020, IS RECTIFIED TO THE EXTENT INDICATED ABOVE. 9. IN THE RESULT, MISC. APPLICATION IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19.05.2021 SD/ - C.N. PRASAD JUDICIAL MEMBER SD/ - S. RIFAUR RAHMAN ACCOUNTANT MEMBER MUMBAI, DATED: 19 .05.2021 5 TATA REALTY & INFRASTRUCTURE LTD. COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI