TaxTMI 
TaxTMI 
2017 (10) TMI 782
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....shmir Housing Board. The lower authorities have grossly erred in concluding that the properties were to be valued as per the circle rates of land of Jammu Division under "The Stamp Act" and not as per the rates prescribed by Jammu and Kashmir Housing Board. Thereby concluding that the provisions of Section 50C of the Income Tax Act, 1961 are applicable to the case. (b) That the Td. AO and the worthy Commissioner of Income Tax (Appeals) failed to appreciate that there is a restriction as per State Law that none other than resident of the state of J&K can purchase property in the state of J&K. The lower authorities grossly erred in treating loan of 10 Lacs given by Sat Agrotech Overseas Pvt. Ltd. for purchase of property which was duly returned back as the deal could not be matured. Thereby concluding that the provision of Section 2(22)(e) are applicable to the case. 2. That the addition confirmed by the Hon'ble Commissioner of Income Tax (Appeals) are arbitrary, illegal, illogical and unwarranted without considering the law, facts and circumstances of the case. 3. That the Appellant craves to leave and or amend grounds of appeal till the appeal remains und....
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....sessed by any authority of a State Government (Stamp Valuation Authority) for the purpose of payment for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall, for the purposes of section 48, be deemed to be full value of the consideration received or accruing as a result of such transfer. Thus, the provisions of section 50C(1) is squarely applicable in this case and Assessing officer was justified in calculating the long term capital gain by applying the provisions of section 50C(1) of the Act. The addition made by the Assessing Officer, therefore, is sustained. 5. Ground No. 3. Disallowance of Housing Loan Interest: ********** 6 Ground No.4 & 5:- Addition on account of deemed dividend u/s 2(22)(e):- *********** 6.1 I have considered the rival submissions and also the provisions of section 2(22)(e) which read as under: "Any payment by a company not being a company in which the public are substantially interested', of any sum (whether as representing a part of the assets of the company or otherwise) 97{made after the 31st day of May, 1987, by way of advance 98 or loan to a s....
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....lease hold property as the transfer of any lease is exempted from duty. The Ld. AR also relied upon the judgment titles as Commissioner of Income Tax Central-II, Mumbai Versus M/s Green field Hotels & Estates Pvt. Ltd. , ITA no. 735 of 2014 , decided on 24-10-2016 passed by the High Court of judicature at Bombay and emphasized that the Hon'ble High Court dealt with the same situation and was please to held that section 50C of the IT Act is not applicable to lease hold property . Further, the Ld. AR also relied upon the order passed by the ITAT, Delhi Bench, in the case of Asst. CIT vs. Shrikishan Dass passed in ITA No.915/Del/2012 decided on 07.06.2013. In respect of ground No. (b), it was submitted by the Ld. AR that CIT(A) failed to appreciate that there is a restriction as per the State Law that none other than residents of the State of J&K can purchase property in the State of J&K. The Ld. AR further submitted that the authorities below grossly erred in treating loan of Rs. 10 Lakhs given by M/s Sat Agrotech Overseas Pvt. Ltd. for purchase of the properties which was duly returned back as the deal could not be matured thereby, provision of Sec.2(22)(e) is not applicabl....
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....m the Bank statement that the assessee had received Rs. 10 Lakhs from Sat Agrotech Overseas Pvt. Ltd. and thereafter booked a plot in Jammu and Kashmir Housing Board, however, the same was declined due to one or other reason and finally the deal of the property under question could not be matured, therefore, the earnest money was returned back to the company and even otherwise according to Circular No.19/2017, the CBDT analyzed the settled view of Sec.2(22)(e) of the I.T. Act, therefore, clarified the same as under: "2.1 Some illustrations/examples of trade advances/commercial transactions held to be not covered under section 2(22) (e) of the Act are as follows: i. Advances were made by a company to a sister concern and adjusted against the dues for job work done by the sister concern. It was held that amounts advanced for business transactions do not to fall within the definition of deemed dividend under section 2(22) (e) of the Act. (C1T vs. Creative Dyeing & Printing Pvt. Ltd.^, Delhi High Court). ii. Advance was made by a company to its shareholder to install plant and machinery at the shareholder's premises to enable him to do job work for the co....