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4. A Collaboration Agreement dated 28.08.2002 was then executed between Span Properties Pvt. Ltd. and JMD Promoters Private Limited, through its Managing Director Shri Sunil Bedi. Under this MoU, JMD Promoters Private Limited agreed to construct a building having approximately 54,000 square feet of FAR on the land belonging to Span Properties Private Limited. The building which JMD Promoters Private Limited had to construct on the land of Span Properties Private Limited was to be a centrally air conditioned multi-storey commercial building. A sum of Rs 2.50 crores was paid by JMD Promoters Private Limited to Span Properties Private Limited as a non-refundable security for due purpose of its obligations under the agreement and as part consideration. On completion of the project, 25% of the entire built up area of the building (13500 square feet) and basement with proportionate ownership rights in the land underneath was to come to the share of Span Properties Private Limited and simultaneously the amount of Rs 2.50 crores which it had received from JMD Promoters Private Limited as security was to be adjusted towards consideration. Thus under this agreement, JMD Promoters Private Limited was to pay Rs 2.5 crores and 25% of the built up area of the proposed air conditioned commercial building to Span Properties Private Limited.

5. An agreement dated 30.11.2002 was then executed between Shri Prem Shanker Khandelwal, Shri Niraj Khandelwal, Shri Karan Khandelwal and Shri Niraj Khandelwal (HUF) on the one hand and Shri Sunil Bedi, Managing Director of JMD Promoters Private Limited on the other. Under this agreement Khandelwals agreed to transfer entire share holding in Span Properties Private Limited consisting of 216200 fully paid up equity shares to Shri Sunil Bedi for a total sale consideration of Rs 2.50 crores. Pursuant to the aforesaid agreement, the entire share holding of Khandelwals in Span Properties Private Limited was transferred to Shri Sunil Bedi.

9. It is not in dispute that the requisite approvals, including charge of land use and licence for construction of a commercial building on land in question had been obtained and conversion charges, additional conversion charges, external development charges and external development charges had been paid by Span Properties Private Limited before it entered into the Collaboration Agreement dated 28.08.2002 with JMD Promoters Private Limited. The relevant clauses of the said agreement read as under:-

10. The value of land in question, after change of land use so as to enable construction of a commercial building and payment of conversion charges, development charges, etc., was agreed by Kandelwals/Span Properties Private Limited and Fashion Flair International Private Limited at Rs 6.35 crore, vide MoUs dated 22.03.2000 and 19.12.2000. It can therefore be safely taken that the value was not less than Rs 6.35 crore on 15.07.2002 when the Collaboration Agreement was executed been Span Properties Private Limited and JMD Promoters Private Limited and on 30.11.2002, when the agreement for sale of share holding was executed between Khandelwal and Sunil Bedi, unless it is shown that on account of reasons such as slump in the market or the permissible coverage/FAR being reduced or the land use having been changed from commercial to some other purpose, or some other reason, there was erosion in the market value of the land between 22.03.2000/19.12.2000 and 28.08.2002/30.11.2002. We find that this was not the case of the assessee either before the Assessing Officer or before the CIT (Appeals) or before the Tribunal that on account of slump in the market, the value of land in the locality had gone down between December, 2000 and November, 2002. No such plea has been taken even before us. It was, however, contended by the learned counsel for the assessees that at the time MoUs were executed on 22.03.2000 and 19.12.2000, the parties were under an impression that the permissible FAR on the land in question was 2, whereas Haryana Government permitted only 1.5 FAR while changing land use and accorded necessary approvals and that is why the market value of the property had gone down on account of permissible built up area having been substantially reduced. We have carefully perused the MoU dated 22.03.2000 as well as the MoU dated 19.12.2000. There is absolutely no mention in either of these MoUs from which it may be inferred that the parties believed that the permissible FAR at the time these MoUs were executed was 2. Admittedly, no attempt was made by the assessees to lead evidence before the Assessing Officer to prove that the permissible FAR at the time of execution of MoUs was 2. If the permissible FAR on land in question at the time of execution of the MoUs, was 2, it could have been easily proved by the assessee before the Assessing Officer, by filing the relevant building bye-laws or summoning an official from the office of concerned Authorities in Haryana. Since neither the MoU gives any indication that the FAR in contemplation of the parties at the time of execution of these documents was 2 nor has any evidence been produced to this effect, we are unable to accept the plea that at the time MoUs were executed, the parties were under an impression that permissible FAR on land in question was 2. No other ground has been taken by the assessees to explain the alleged erosion in the market value between December, 2000 and November, 2002. We, therefore, are of the view that the Assessing Officer was justified in taking a view that the value of the land in question at the time of sale of the shares of Span Properties Private Limited to Shri Sunil Bedi was Rs 6.35 crore.