TaxTMI 
TaxTMI 
2015 (8) TMI 841
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....t term / long term capital gains and other sources. The return of income filed by the assessee was subject to scrutiny assessment, wherein the total income has been assessed at Rs. 4,63,70,000/-, which interalia, included certain disallowances, whereby the income shown as short term / long term capital gain on sale of shares and securities was held as 'business income'; and, the stated consideration paid for acquisition of a property was not accepted. On both the issues, assessee carried the matter in appeal before CIT(A). In appeal CIT(A) accepted the plea of the assessee that the short term/long term capital gain earned on sale and purchase of shares and securities was not assessable as 'business income' and, against such a finding of the CIT(A), Revenue is in appeal before us on the basis of Ground of appeal Nos.1 & 2, reproduced hereinafter:- " (1) "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing the Assessing Officer to treat the Long Term Capital Gain as well as Short Term Capital Gains as such and not as business income without appreciating the following facts; (a) The magnitude of transactions is voluminous in very f....
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.... 14/03/2008 and the value adopted by the stamp duty valuation authority for the purpose of payment of stamp duty as on that date was Rs. 5,44,65,000/-. The AO referred the valuation of the said premises to the DVO under section 142A of the Act, 1961 whose report was not received till the completion of the assessment. Nevertheless, the AO proposed an addition of Rs. 2,04,65,000/- being the difference between the stamp duty value and the purchase price of the property. 5.1 In the course of the appellate proceedings before CIT(A), the valuation report of the DVO was received whereby the value of the property as on 14/3/2088 was estimated at Rs. 4,50,25,000/-. The assessee contended before CIT(A) that there was no justification to adopt the valuation estimated by the DVO in order to determine any unexplained investment. The assessee also explained the reasons for the difference between the stated consideration and the value adopted by the stamp duty valuation authorities as on the date of registration of the property, i.e. on 14/03/2008. It was explained by the assessee that he had booked the said premises with the builder in September,2007 itself and out of the total consideration ....
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....sis of March, 2008 rates is not justified. It has also been pointed out that the stamp duty Ready Reckoner rates prevailing in March, 2008 were almost 53.5% higher than those prevailing in 2007 and in this context, he has referred to the detailed submissions, which have been reproduced by CIT(A) in his order. Thus, on facts, Ld. Representative for the assessee has justified the price paid for acquisition of the property. It has also been pointed out that there was no material on record to establish any payment made by the assessee over and above the stated consideration. It has also been submitted that in law, the value determined by the report of the DVO cannot form a basis to hold that assessee has paid any consideration over and above the stated consideration. 7. On the other hand, Ld. DR appearing for the Revenue has defended the action of the AO by pointing out that the value adopted by the stamp duty valuation authority was much higher than the stated consideration, which reflected that assessee did not acquire the property at its fair market value and, therefore, addition made by the AO on account of unexplained investment in acquisition of the property is justified. 8....
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....ation. In this view of the matter, we are unable to uphold the stand of the incometax authorities. 8.1 Factually speaking also, assessee has appropriately explained the reasons for the difference between the stated consideration and the value determined by the stamp duty valuation authority and/or the report of the DVO. The assessee had explained before the CIT(A) that the premises were acquired on the basis of a price negotiated in September, 2007 and that he had paid almost 70% of the total consideration in September & October 2007 itself knowing fully that the premises would be available for occupation only after a period of 3 ½ years to 4 years. The second aspect canvassed by the assessee was the increase in the stamp duty Ready Reckoner rates in 2008 visa- vis the rates in 2007. The facts and figures, in this regard have been reproduced in the order of the CIT(A) which clearly establish that the stamp duty ready recknor rate in 2008 were almost 53.5% higher than those in 2007. All the aforesaid explanations furnished by the assessee to show that the purchase consideration paid was justified, has not been controverted or found to be false by the income tax authorities....
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....apital gain as business income. Apart from his analysis of the fact- situation for the year under consideration, the CIT(A) also noticed that the Department in scrutiny assessments under section 143(3) of the Act in earlier years had treated the assessee as an investor in shares and that in this year there was no new factor which could justify the treatment of long term or short term capital gain as business income. On the point of consistency with the past assessments, CIT(A) has relied upon the judgment of Hon'ble Bombay High Court in the case of CIT vs. Gopal Purohit, 336 ITR 287(Bom). Against such a decision of CIT(A), Revenue is in appeal before us. 10. Before us, the Ld. DR appearing for the Revenue has primarily relied upon the order of the AO in support of the case of the Revenue. The reasoning adverted by the AO has already been noted by us in the earlier paras and is not being repeated for the sake of brevity. The only other plea put forth by the Ld. DR before us was to the effect that each year is an independent year and the CIT(A) erred in deciding the issue based on the stand taken by the AO in the past assessment years. 11. Ld. Representative for the assessee ha....