The assessee entered into a revenue sharing agreement with its holding company under which the holding company would provide end to end support in planning, development, construction, marketing and sale of its projects and the assessee was liable to pay 24 per cent. of the gross revenue earned by it through sale proceeds of buildings and structures proposed to be constructed. Accordingly, the revenue for the year in the books of the assessee Rs. 12.99 crores of gross revenue was shared with the holding company. The AO disallowed the sum. The CIT (A) deleted the addition but disallowed the expenditure incurred by the assessee towards services obtained from its holding company at 25 per cent. of the revenue. On appeal by the revenue the  Tribunal held that   the assessee was under the obligation to part with the source of income to the holding company and it was not its volition to give away the revenue that could have been otherwise accrued to it. The flats to be constructed by the assessee-company were the source of income and the holding company had created a lien over 25 per cent. for a quid pro quo and took away 25 per cent. share from the sale proceeds. It was not a case that the entire sale proceeds of flats accrued to the assessee and 25 per cent. thereof had been applied or given away by the assessee to the holding company. The assessee acted as a collector of revenue for the holding company of the receipt to the extent of 25 per cent. of the sale proceeds. The 25 per cent. belonged to the holding company by virtue of the contributions made and the agreement entered into. The assessee was obligated by virtue of the agreement to divert the income at source and also for the contributions made by the holding company. Thus, this was a case of diversion of income by overriding title. The Department’s contention that the entire transaction was sham and aimed at diverting the income to  Emaar MGF Land Limited   was not based on the facts. Tribunal also held that keeping in view the contribution made by the holding company and the amounts that had been already offered for taxation in the hands of the respective entities, the expenditure was allowable in the hands of the assessee.( AY.2012-13)