TaxTMI 
TaxTMI 
2017 (8) TMI 956
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....ur consideration :- "(i) Whether on the facts and circumstances of the case and in law, the Tribunal was justified in directing the Assessing Officer to delete the addition on account of suppression of sale value of flats, though there was a gross variation in the sale price of the flats even on the same floor in the same direction ? (ii) Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that stock was not included in stock in trade, although there was no liability towards MHADA on the assessee which the assessee himself confirmed that in subsequent years, said stock had been sold out in open market ?" 3. Regarding question no.(i): (a) The respondent - assessee is ....
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....ibunal. The impugned order of the Tribunal holds that Section 50C of the Act which has been invoked by the CIT (A) would have no application in the facts of the present case. This in view of the fact that section 50C is part of Chapter IV-E of the Act dealing with the head 'Capital gains'. The aforesaid provision is applicable only for purpose of computing the income chargeable under the head 'Capital gains'. It would have no application in determining income under Chapter IV-D of the Act under the head 'Profits and gains of business or profession'. Further, the impugned order holds that section 56(2)(vii)(b)(ii) of the Act would have no application as it applies to an individual or Hindu Undivided Family (HUF). The ....
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....ns of business or profession'. This is so as its application is only limited to computation of income chargeable under the head 'Capital gains' as is evident from specific reference in sub-section (1) of section 50 of the Act to section 48 of the Act i.e. mode of computation of capital gains. In fact section 50C of the Act as 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....
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.... flats, is a finding of fact. This has not been shown to be perverse. (i) In the above view question (i) as formulated does not give rise to any substantial question of law and thus not entertained. 4. Regarding question No.(ii) : (a) The respondent - assessee had shown value of unsold flats of Rs. 2.03 crores in its balance sheet. The Assessing Officer was of the view that Rs. 2.03 crores being value of unsold flats aggregating to 31,414 sq. ft. would give a rate of Rs. 647 sq. ft. The Assessing Officer observed that the cost of construction was at Rs. 4928 per sq.ft. Consequently, the Assessing Officer called upon the respondent - assessee to justify the value of closing stock at Rs. 2.03 crores. In response the respo....
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..... mtrs. in same building or permit the respondent - assessee to construct another building in the same ward. In the above view, the impugned order holds that the approval for MHADA project was granted subject to condition that the flats in aggregate admeasuring 1797 sq. mtrs. were to be handed over to MHADA. Thus, to the above extent the flats comprising an aggregate area of 1797 sq. mtrs. could never be part of the respondent - assessee's closing stock. In the above view the impugned order allows the appeal. However, as there was some dispute with regard to 1797 sq. mtrs. to be computed on the basis of super built up area or on the basis of built up area was restored to the Assessing Officer. (d) The grievance of the revenue i....