TaxTMI 
TaxTMI 
2016 (4) TMI 754
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.... was no trade dealing/business transaction with the said concern. The Assessing Officer also noted that there was an opening debit balance of Rs. 1.00 lakh in the name of Panipat College of Textile Tech. Pvt. Ltd., with whom again there was no business dealing. The assessee had claimed expenses of Rs. 11,42,875/- in respect of bank interest, however, no interest had been charged by the assessee from these two concerns on the amounts advanced to them. The Assessing Officer disallowed a sum of Rs. 54,477/- being interest calculated @12% on interest free advances. 3. On appeal, the Ld. CIT (A) while upholding the disallowance held that the assessee could not substantiate that the sum of Rs. 1.00 lakh was paid to Panipat College of Textile Tech. Pvt. Ltd. for business purposes. Regarding the loan of Rs. 4.5 lakhs to M/s Victory Enterprises, the Ld. CIT (A) observed that no evidence was brought on record to prove that the capital of the Proprietor was available for making the said interest free loan. Here also the assessee, as per the Ld. CIT (A), could not substantiate his claim that the interest free advance was for the purposes of the business of the assessee. Supporting his ground ....
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....money is utilised in a way that makes commercial sense and helps in running the business of the assessee more efficiently, then it can be said that the interest paid in respect of the borrowed money has been incurred for the purposes of commercial expediency. Moreover, the Ld. AR has demonstrated that as per the Balance sheet, the assessee had a capital of Rs. 2.73 crores and the profit for the year was Rs. 16.94 lacs. These figures, in our opinion, were sufficient to meet the investment requirements as well as the amount given as advance to M/s Victory Enterprises. These facts were before the Ld. CIT (A) also but he has not specifically dealt with them in the impugned order. Therefore, on an overall view of the facts of the case and the judicial pronouncements referred to above, we direct the Assessing Officer to delete the disallowance of Rs. 54,477/- on account of interest. Hence this ground of the assessee's appeal is allowed. 5. Ground no. 2 relates to the disallowance of Rs. 21,132/- on account of 1/5th of the telephone expenses by the Assessing Officer and confirmed by the Ld. CIT(A). The Ld. AR submitted that all the telephones were used for business purposes only. However....
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.... the property deals there is always an advance amount with the clause that if the purchaser fails to make the full payment and to get the deal registered by a specific date than the advance amount will be forfeited and if the seller fails to honour Ikramama but without an advance there is a mention of penalty of Rs. 1 lakh in case of cancellation of deal which is not according to the general practice for such deals. 3.3 The consideration payments by each of the three purchaser for each share and the registry in the name of three persons clearly show that there were three purchasers and the so claimed 'Ikramama" signed by only one purchaser has no authenticity. In view of the above it is evident that the so claimed "Ikramama" is concocted and an after thought of the assessee. Even otherwise for the purpose of sale consideration the date of execution of the sale deed is relevant and not the date of Ikramama. As such the contention of the assessee that the deal of the property was started on 18th Jan. 2007 is not acceptable specially when there is no mention in the sale deed about the so claimed Ikramama dated 18.01.2007." 7. Based on this reasoning, the Assessing Officer took the....
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.... asset and which does not have within itself the ambit for valuation of the valuation officer for purpose of stamp duty. 3. Pertinently the provision of section 50-C is only 'a measure' for computation of the tax which cannot determine and regulate by relating back to the charging section 45' reverse ways and by falling reverse ways with the scope of computation of tax chargeable u/s 4 and 5 of the Act. Even the said suggestion to have been rendered presupposes the levy factually and actually never in existence and neither emerging out of the transactions between the two contracting parties. 4. The intent and scope of the provisions is towards checking and working the tax evasion as discernible from confiscatory measure declining the benefits emerging out of it which will not be available since the excess/differential unavailable for set off under the provisions of section 54 to 54ED which is being said so since the Income Tax Act, 1961 is an "integrated code" and has to be read in totality. 5. The section is merely substituting the "valuation of the stamp valuation authority" within the words of the Act "total income" resulting altering the subject matter of the ....
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....the Explanatory notes to the amendment it was clarified that - (1) Section 50C is a special provision for determining the full value of consideration in cases of transfer of immovable property, being land or building or both; (2) Section 50C provides that where the consideration declared to be received or accruing as a result of transfer of land or building or both is less than the value adopted or assessed by the Stamp Valuation Authorities for the purpose of payment of stamp duty in respect of transfer, then value so adopted or assessed by them shall be deemed to be the full value of consideration; (3) It is also provided that where the assessee claims that the value adopted or assessed for stamp duty purposes is more than the fair market value of the property as on the date of transfer and he has not disputed this value before the appellate authorities or the Court under Stamp Duty Act then the Assessing Officer may refer the valuation of such property under transfer to the Valuation Officer in accordance with Section 55Aof the Income-tax Act, 1961. If the fair market value so determined by the Valuation Officer is less than the value adopted for stamp duty purposes the Asses....
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....re - a) the assessee claims before any Assessing Officer that the value adopted or assessed or assessed or assessable by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer; b) the value so adopted or assessed or assessed or assessable by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, Court or the High Court, the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of subsections (2), (3), (4), (5) and (6) of Section 16A, clause (i) of sub-section (1) and subsections (6) and (7) of Section 23A, subsection (5) of Section 24, Section 34AA, Section 35 and Section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with necessary modifications apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under subsection (1) of Section 16Aof that Act. Explanation1. - For the purposes of this section 'Valuation Officer' shall have the same meaning as in clause (r) of Section....
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....ould be made in accordance with Section 55A; -On receipt of valuation report from the Valuation Officer, the Assessing Officer has to compare the fair market value as determined by the Valuation Officer with the valuation done by the Stamp Valuation Authorities under the Stamp Duty Act and with the apparent sale consideration shown by the assessee in the sale deed; -Where valuation done by the Valuation Officer is more than the valuation done by the Stamp Valuation Authorities (SVA) then valuation done by the SVA would be taken as full value of consideration and capital gains will be calculated accordingly; -If valuation done by the Valuation Officer is less than the valuation done by the SVA then valuation done by the Valuation Officer would be adopted as full value of consideration as against the apparent consideration shown by the assessee or the valuation done by the SVA and capital gains be calculated accordingly; -If valuation done by the Valuation Officer is less than the valuation done by the SVA as well as sale consideration shown by the assessee in the sale deed then apparent consideration shown in the sale deed would alone be accepted as full value of consideration a....
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....eference u/s 55A of the Act are that (1) valuation done by the Stamp Valuation Authority is more than the apparent sale consideration; (2) the assessee makes a claim before the Assessing Officer that fair market value of the property under transfer is less than the valuation done by Stamp Valuation Authority. If these two conditions are satisfied, the Assessing Officer is bound to make a reference to the Valuation Officer. A perusal of the submissions dated 28.10.2010 filed before the Assessing Officer shows that in para (j) of the reply, the AR of the assessee has submitted as under:- "(j) u/s 50C(2) the rights of the assessee an duty of revenue are prescribed wherein the provision commences as "without prejudice to the.....where...."meaning thereby the provision is an isolated code wherein the matter can be referred to the Valuation Officer "where the value adopted/assessed, undisputed which presently is being prayed to be invoked before determining the conditions and considering the logistics relatable to the place and timing of the property under valuation." 13. This submission of the assessee, though not expressed with crystal clarity, is a specific request for making a ref....
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....ue, the AO ought to have referred the matter to the valuation officer to ascertain the valuation. The Tribunal has held as under :- "Section 50C prescribes for adoption of full value of consideration in certain cases. It is provided that where the consideration received or accrued as a result of the transfer of a capital asset being land or building or both is less than the value adopted by an authority of the State Government for the purposes of payment of stamp duty in respect of such transfer, then the value so adopted by the State Government authority shall be deemed to be the full value of consideration received or accruing as a result of such transfer. The said provisions of sub-section (1) of section 50C are further circumscribed by sub-section (2) of section 50C. In terms of clause (a) of sub-section (2) of section 50C, it is provided that where an assessee claims before the Assessing Officer that the value adopted or assessed by the Stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer, then the Assessing Officer may refer valuation of the capital asset to the Valuation Officer. In instant case, factually ....