DCIT, CIRCLE-7(1), NEW DELHI vs. DLF URBAN PVT LTD, DELHI

ITA No.1962/Del/2022 Assessment Year: 2016-17 DLF Urban Pvt. Ltd., Vs. DCIT, 15, Shivaji Marg, Circle 7(1), New Delhi – 110 015 New Delhi. PAN: AAFCD3019C (Appellants) (Respondents) Assessee by : Shri R.S. Singhvi, Shri Satyajeet Goel & Shri Rajat Garg, CAs. Revenue by : Shri Rajesh Kumar, CIT, DR Date of Hearing : 23.02.2024 Date of Pronouncement : 08.04.2024 CORRIGENDUM PER ANUBHAV SHARMA, JM: It has come to the knowledge that in the form 36 appeal set, the copy of order of First Appellate Authority, i.e., CIT(A), filed by the appellant Revenue Department, is of DLF Midtown Pvt. Ltd. which is another entity, of group, where in identical issue were raised and contested and, thus, in the order passed on 8/4/2024 in case of present assessee, while reproducing certain facts, from the order of the ld. CIT(A), discrepancy has crept in with regard to certain figures and with regard to the name of the Chartered Accountant firm which had verified Form 3CEB.

Relevant page and para of the order Corrected para Page 2 Para 2.1 Page 2 Para 2.1 “2.1 The Ld.AO passed the Draft “2.1 The Ld.AO passed the Draft Order u/s 143(3) r.w.s. 144C of the Order u/s 143(3) r.w.s. 144C of the Act, on 25.12.2019 wherein the Act, on 25.12.2019 wherein the income of the appellant company was income of the appellant company was proposed to be assessed at a total proposed to be assessed at a total income of Rs.3,28,59,57,780/- as income of Rs.3,28,59,57,780/- as against returned loss of Rs.90,47,202/-, against returned loss of Rs.90,47,202/-, thereby proposing an addition of thereby proposing an addition of Rs.3,28,59,57,780 / -. . .” Rs.3,29,50,04,981/-….” Page 5-6 Para 3.1 Page 5-6 Para 3.1 3.1 The case of Revenue and 3.1 The case of Revenue and assessee need to be first understood to assessee need to be first understood to adjudicate the aforesaid grounds. The adjudicate the aforesaid grounds. The appellant company, a wholly owned appellant company, a wholly owned subsidiary of DLF Home Developers subsidiary of DLF Home Developers Ltd (DHDL), was incorporated with Ltd (DHDL), was incorporated with the main object to engage in the the main object to engage in the business of construction, development, business of construction, development, and sale of integrated townships and and sale of integrated townships and residential complexes. The case of residential complexes. The case of assessee is that it approached many assessee is that it approached many investors for evincing interest in investors for evincing interest in developing a project in Moti Nagar developing a project in Moti Nagar situated in New Delhi. Thereupon, situated in New Delhi. Thereupon, Singapore government through its arm Singapore government through its arm M/s Reco Moti Pte Ltd. (RMPL) (a M/s Reco Moti Pte Ltd. (RMPL) (a Singapore Government entity) Singapore Government entity) acquired a controlling stake of 51% in acquired a controlling stake of 51% in the appellant company based on a the appellant company based on a valuation report by Cushman & valuation report by Cushman & Wakefield, an internationally Wakefield, an internationally recognized real estate company. The recognized real estate company. The appellant company entered into an appellant company entered into an Agreement with DLF Home Agreement with DLF Home Developers Ltd. on 21.12.2015 for Developers Ltd. on 21.12.2015 for purchase of irrevocable, absolute and purchase of irrevocable, absolute and unfettered rights in respect of land unfettered rights in respect of land parcel measuring 19.06 acres parcel measuring 6.79 acres (27,460 (77,133.0754 square meters) situated square meters) situated at Shivaji at Shivaji Marg, Moti Nagar, New Marg, Moti Nagar, New Delhi for Delhi for development of planned development of planned residential residential project at Shivaji Marg. On project at Shivaji Marg. On the basis the basis of Valuation Report dated of Valuation Report dated 28.08.2015 28.08.2015 of M/s Cushman of M/s Cushman Wakefield (C&W) Wakefield (C&W) (hereinafter (here in after refered as Valuer’ ) for referred as Valuer’) for valuing the valuing the project, the land of the project, the land of the project was project was valued at Rs. 9310 Million valued at Rs. 27831 Million rupees. rupees. The valuation was made on The valuation was made on two two methods:- methods:- (a) Sales Comparable Method = (a) Sales Comparable Method = 27803 Million Rupees 9340 Million Rupees (b) Discounted Cashflow Method (b) Discounted Cashflow Method = 27859 Million Rupees = 9279 Million Rupees Average of (a) & (b) = 27831 Average of (a) & (b) = 9310 Million Rupees Million Rupees Page 7 Para 5 Page 7 Para 5 5. In response, the appellant asserts 5. In response, the appellant asserts that RMPL appointed M/s Cushman & that RMPL appointed M/s Cushman & Wakefield as an Independent Valuer, Wakefield as an Independent Valuer, which is an International Real Estate which is an International Real Estate Company having its office at U.S.A. Company having its office at U.S.A. On the basis of the Valuation Report On the basis of the Valuation Report by M/s Cushman and Wakefield the by M/s Cushman and Wakefield the property has been valued at 931 property has been valued at 9310 ITA No.1962/Del/2022 Million Rupees. After making Million Rupees. After making valuation, it has been agreed between valuation, it has been agreed between the assessee and RMPL to enter into the assessee and RMPL to enter into an agreement for transfer of an agreement for transfer of development rights from M/s DHDL at development rights from M/s DHDL at a consideration of Rs.925 Cr. The a consideration of Rs.925 Cr. The Stamp Value Authority, which is Delhi Stamp Value Authority, which is Delhi Government, charged stamp duty from Government, charged stamp duty from the assessee company on transfer of the assessee company on transfer of development rights amounting to development rights amounting to Rs.55.50 Crs which is charged on Rs.55.50 Crs which is charged on Rs.925 Crs and not on the Circle Value Rs.925 Crs and not on the Circle Value of Rs. 192.57 Crs. Therefore, for the of Rs.385.13 Crs. Therefore, for the purposes of Sec. 50C and 43CA the purposes of Sec. 50C and 43CA the assessable value is Rs.925 Crs. assessable value is Rs.925 Crs. Page 39 para 15.1 Page 39 para 15.1 “15.1 In this context the Ld. DR has “15.1 In this context the Ld. DR has pointed out that in serial no.l of form pointed out that in serial no.l of form 3CEB, it is mentioned “I/We for 3CEB, it is mentioned “I/We for Chartered Accountant who has/have Chartered Accountant who has/have verified, the information received from verified the information received from the assessee regarding international the assessee regarding international transactions.” Ld, DR has submitted transactions.” Ld, DR has submitted that the accountant has to delete either that the accountant has to delete either I/We, whichever is not applicable. In I/We, whichever is not applicable. In the case of assessee, form 3CEB (page the case of assessee, form 3CEB (page no. 183 to 190 of PB) has been no. 183 to 190 of PB) has been verified by one Mr. Amit Gupta on verified by one Mr. Amit Gupta on behalf of S.R. Batliboi & Company behalf of S.R. Batliboi & Company LLP. Also the word used in the first LLP. Also the word used in the first paragraph is “WE" which means that a paragraph is “WE" which means that a team of Chartered Accountant on team of Chartered Accountant on behalf of Price Waterhouse and behalf of S.R. Batliboi & Company company has verified the form 3CEB LLP has verified the form 3CEB of of the assessee company, which means the assessee company, which means that the information along with the that the information along with the documents has been verified....” documents has been verified....”