TaxTMI 
TaxTMI 
2017 (8) TMI 844
X X X X Extracts X X X X
X X X X Extracts X X X X
.... fact the provisions of section 50C are not applicable in the case of a business asset. 3. The Learned First Appellate Authority is ;not justified in confirming the addition of Rs. 29,79,200/- made by the Assessing Officer." 2. Assessee is engaged in the business of construction of houses and apartments. For the year under consideration, it admitted loss both under the regular provisions as well as u/s 115JB of the Act, which was accepted while processing return u/s 143(1) of the Act. 3. Subsequently, it was taken up for scrutiny. While examining the records, the A.O. noticed that the assessee sold land to three people and claimed loss of Rs. 14,59,460/- from the sale of land. Sale consideration was less than the market value of the land....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., which would cover sale of stock-in-trade also, but it being prospective in nature, for the period under consideration, the provisions of section 43CA cannot be applied and there is no other provision in the Act to take into consideration the market value by substituting the actual sale consideration while working out the income from business. 6. The Assessing Officer did not dispute the fact that land was considered as stock-in-trade but, he mainly focused on the issue that the assessee purchased the land for a higher price whereas it sold at the lower price which is ordinarily not being done by any business man and thus, the provisions of section 50C can be applied to such transactions. He also referred to the sale documents to observe ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at Rs. 67.60 Lakhs except stating that there is court dispute. Since there is lack of circumstantial evidence and proof, I am also in agreement with the A.O. and the addition made by the Assessing Officer is confirmed'. Further aggrieved, assessee is in appeal before the Tribunal. 7. Ld Counsel for the assessee submitted that assessee admittedly is engaged in the business of purchase and sale of land, construction of apartments and houses etc., and the land in dispute having been purchased, referred to as stock-in-trade, income on sale of land is taxable under the under business income in which event, the provisions of section 50C cannot come into play. There is no other provision under the Act to enable the Assessing Officer to substitut....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s observed by the impugned order is placed as part of the Chapter IV-E under the head 'capital gains', it can only govern the valuation of the property to determine capital gains and cannot govern valuation of transfer of assets (other than a capital asset) i.e., stock-in-trade. This view is further strengthened by the fact that section 43CA has been introduced into the Act w.e.f 1st April, 2014 which governs taking of full value of consideration for transfer of assets other than capital assets on the basis of stamp duty valuation. This section 43CA of the Act finds a place as a part of Chapter IV-D - Profits and gains of business or profession. Therefore, with effect from 1st April, 2014 the stamp duty valuation of assets sold could be tak....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sale consideration. 11. I have carefully considered the rival submissions and perused the record. I have also carefully gone through the case law relied upon by the Ld. Counsel for the assessee and reasons by the A.O. as well as the CIT(A). On careful analysis of the matter, it is noted that A.O. as well the CIT(A) have made the impugned addition based on the inference that the assessee could have sold land at higher price as reflected in the records of the stamp valuation authorities. It was further assumed that the assessee paid stamp duty as per the market value overlooking the fact that the stamp duty is normally paid by the purchaser and not the seller. The tax authorities further assumed that the provisions of Section 50C are applica....