TaxTMI 
TaxTMI 
2018 (9) TMI 1231
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....ained by Sub-Registrar and as such the sale was shown less than 50C value. In its submission before the AO, the assessee submitted that the agreement to sale has been made by it in earlier years and as such the sale price has been shown accordingly. It was further stated that all the bookings have been made in earlier years through sale agreements, wherein booking amount cheques were received at the time of booking and as such the provision of section 43CA are not applicable on it. The Assessing Officer, on perusal of the registered documents filed in respect to the sale affected during the year, observed that cash payments were also received apart from payments received through cheques. Accordingly, a show cause notice dated 18.10.2016 was issued to the assessee company as to why appropriate addition should not be made in terms of provisions of section 43CA of the Act given that advances were received in cash at the time of booking in terms of copies of the agreement dated 09.07.2007. After considering the submissions of the assessee, the AO finally held that the assessee has entered into agreement to sell in earlier years and at the time of agreement, the assessee company had rec....
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....ing another contention of the assessee that the petty amount were received in cash at the time of executing the agreement to sell for these two flats and the remaining consideration was received through banking channels and therefore, its case is covered under the exceptions as stated in section 43CA(4) of the Act, it was held by the ld CIT(A) that there is no equity in tax laws and as per the provisions of section 43CA(4) of the Act, the exceptions to section 43CA(3) could be allowed only in those cases, wherein a part of the sale consideration was received by modes other than cash on or before the date of the 'Agreement to Sell' and in the instant case, the cash amount was paid by the buyers on the date of agreement to sell and therefore, the case of the assessee could not be excluded from the applicability of provisions of section 43CA(1) of the Act. Accordingly, the ld. CIT(A) upheld the addition of Rs. 20,38,324/- made by the Assessing Officer u/s 43CA of the Act. Now, the assessee is in appeal before us against the said findings of the ld CIT(A). 6. The ld AR submitted that the assessee Company is a developer & builder of residential and commercial properties. After sale o....
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....or and another flat was let out. It was further submitted that Section 43CA of IT Act was inserted by Finance Act 2013 w.e.f. 1st April 2014, applicable from A.Y. 2014-15 which levies tax on difference in sale value of land or building or both (stock in trade) and the value assessed or assessable by the authority of the State Government for purpose of payment of stamp duty. However, if the sales are complete on receipt of consideration or major part thereof and after handing over the possession, the deeming fiction prescribed under said section cannot be made applicable. In this case, even after accepting the sales of both the residential flats in the A.Y. 2009-10, the addition of Rs. 20,38,324/- was sustained by ld. CIT(A) for inability of the assessee to foresee the future insertion of provisions of section 43CA of IT Act in which cash receipt at the time of booking or agreement was made basis of the additions though it was not the intention of the legislature. It was further submitted that sale of both the flats (stock in trade) for which addition was made/sustained were complete as per provisions of section 2(47)(v) of IT Act on handing over the possession to buyers, acco....
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....e Department for AY 2009-10. 9. Similar fact pattern exists in respect of the other property namely Flat No. T-3 wherein the agreement to sell was entered into on 9th April, 2007 for an amount of Rs. 27,00,000/- out of which Rs. 1.5 lac was received in cash on 09.04.2007 and thereafter, two cheque payments of Rs. 24.5 lac and 1 lac were received by the assessee on 04.05.2007 and 28.06.2008. The possession over the said property was handed over to the buyer on 28.06.2008 and finally the sale deed was executed on 03.10.2013 confirming the payments and the possession being handed over to the buyer on 28.06.2008. Further, it is also being contended by the ld. AR that the sale consideration of Rs. 27,00,000/- have been duly declared in the assessee's return of income and accepted by the Department for AY 2009-10. 10. In light of above factual matrix wherein the whole of the sale consideration has been received as per agreement to sell in the previous years and even the possession over the property being handed over to the buyer and the buyer has either started residing therein or given his flat on hire and the sale transaction duly accounted for in the books of accounts of the ass....