JUDGMENT :

M.R. Shah, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 04.09.2017 passed by the High Court of Judicature at Bombay in Income Tax Appeal No. 1756 of 2014, by which, the High Court has dismissed the said appeal preferred by the Revenue, thereby confirming the order passed by the Income Tax Appellate Tribunal, “G” Bench, Mumbai (hereinafter referred to as the ITAT) by which the addition made by the Assessing Officer (AO) of Rs. 15,94,06,500/- was deleted, the Revenue has preferred the present appeal.

2. The dispute pertains to the Assessment Year (AY) 2009-10 i.e., Financial Year (FY) 2008-09. The assessee entered into an agreement dated 06.05.2008 with one M/s Kirit City Homes Pvt. Ltd. The development rights in a property at Vasai were sold for a total consideration of Rs. 15,94,06,500/-. It appears that as per paragraph 6 of the development agreement and as per the receipt of the deed, consideration of Rs. 15,94,06,500/- was agreed and received by the assessee. During assessment, it was noticed by the AO that the aforesaid was not disclosed while filing the return of income. The assessee did not enter the aforesaid income into his profit and loss account. The assessee was asked to explain the transaction as it was not appearing in its profit and loss account. The agreement dated 06.05.2008 was also furnished to the assessee along with the notice. In response, the assessee vide letter dated 04.10.2011 stated that the transaction was duly offered to tax in AY 2008-09 reflecting a consideration of Rs. 5,24,27,354/-. The assessee also stated that it had entered into a “rectification deed” with the said party on 30.05.2008. By the said ratification, it was claimed that the value of the development rights was reduced from Rs. 15,94,06,500/- to Rs. 5,24,27,354/-. As the transaction was pertaining to AY 2009-10, the assessee was served a further notice dated 10.10.2011 under Section 142(1). The assessee was requested to explain as under:-

(i) “You are aware that perusal of AIR information, copy of ‘Development Agreement’ dt. 06.05.2008 revealed that you had entered into “Development Agreement” with M/s. Kirit City Homes Mau, Pvt. Ltd in respect of various properties as detailed in the said agreement. It is also seen that you had received Rs. 13,94,06,500/- on account of granting/allowing development rights assigned.

(ii) As per the agreement, the transaction is dt. 06.05.2008, so this transaction falls under the A.Y. 2009-10 whereas you had offered this transaction in the A.Y. 2008-09. Please explain the logic and basis thereof

(iii) Perusal of the ‘Development Agreement’ dt. 06.05.2008, you had claimed to had received the entire sale proceeds of Rs. 15,94,06,500/-. In this regard, you are requested to furnish the details of sale proceeds received mode there details of proceeds realized, etc in respect of sale proceeds of Rs. 15,94,06,500/-. Please also furnish the copy of ‘Bank Book’/‘Cash Book’ reflecting the receipts and narrations thereof alongwith copy of the bank account statement reflecting credits thereof.

(iv) Vide ‘Deed of rectification’ dt. 30.05.2008, you had claimed to have revised the value from Rs. 15,94,06,500/- to Rs. 5,24,27,354/-. In this regard, please explain whether you had refunded the differential amount. If yes, please furnish the mode and details thereof with supporting documentary evidences.

(v) Vide ‘Deed of rectification’ dt. 30.05.2008, you had claimed to have revised the value from Rs. 15,94,06,500/- to Rs. 5,24,27,354/-. In this regard please furnish the basis thereof with supporting documentary evidences.

(vi) Considering the above, I am of the view that for the above transaction, provisions of section 50C of the I.T. Act 1961 are clearly applicable despite the reduction in your agreement value. In this regard, you are requested to explain as to why the provisions of section 50C of the I.T. Act should not be initiated as well as please explain as to why the s