TaxTMI 
TaxTMI 
2019 (3) TMI 893
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....he CIT(A) has erred in deleting the addition of Rs. 8,88,089/- without appreciating the fact that in the absence of any documentary evidences w.r.t. properties being vacant for particular period or being used by the assessee for his business. Assessee cannot be allowed any benefit and AO has righty made addition on the basis of notional ALV. 4. The appellant craves leave to add, alter or amend any / all of the grounds of appeal before or during the course of hearing of the appeal. 3. The brief facts of the case are that the assessee is a promoter and builder and doing business through his proprietary concern under the name and style of M/s Anil Kumar Gupta & Co. The assessee, during the relevant assessment year, sold two commercial properties; one at Agra and another at Indore. The assessee filed his return of income showing income of Rs. 3,96,112/-. The case of the assessee was picked up for scrutiny. Consequentially the assessment was completed on income of Rs. 2,03,43,201/- by making two additions (i) business income of Rs. 1,90,59,900/- and (ii) notional rental income u/s. 22 of the Act. Aggrieved by the assessment order, the assessee appealed before the Ld. CIT(A),....
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....evidence. Here, the understatement of the sale consideration by the appellant has been inferred by the AO on the basis of difference between the Value of the property for stamp purposes (Circle rate) and the sale consideration shown in the sale deed. In the course of the appellate proceedings, the appellant filled a copy of a sale deed of the property situated in the same Mall by the Builder of the Mall to demonstrate that the appellant's sale price in the Vinayak Mall, Agra is in the same range. 6.1 In a judgment, the Apex Court in the case of K.P. Varghese Vs. ITO [1981] 131 ITR 597 (SC) has held that to throw the burden of showing that there is no understatement of the consideration paid, on the assessee would be to cast an almost impossible burden upon him to establish a negative; namely, that he did not pay any consideration more than what has been declared by him. Therefore, if the Revenue seeks to hold that the assessee has paid more than what has been declared by him in respect of the assessment in question, the onus would lie on the Revenue to prove this fact by bringing some material on record. The ratio laid down in this case is held applicable here....
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....Tax Act. The Hon'ble Delhi High Court has held the similar view in case of Smt. Nilofer I. Singh; 309 ITR 233 and Dev Kumar Jain; 309 ITR 240 after considering the Hon'ble Supreme Court decision in case of CIT v. George Hinderson & Co. Ltd. [1967] 66 ITR 622. The full value consideration means the full value of consideration received by the transferee in exchange of the capital assets transferred by him. The Hon'ble Supreme Court also observed that in the case of full value consideration is the full sale price is actually paid/received. It was further of the view that the expression "full value means the whole price without any deduction, whatsoever and it cannot refer to the adequacy or inadequacy of the price bargained for. Nor did it have any necessary reference to the market value of the capital assets which is the subject matter of the transfer". The Hon'ble Mumbai High Court, in case of in case of CIT v. Texspin Engg. & Mfg. Works [2003] 263 ITR 345/129 Taxman 1 (Bom.) has held at page number 354 & 355 as under: "Now, in the present case, it is argued on behalf of the Department before the Tribunal, for the first time, that in this case, on the vestin....
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....y exclusive to section 45(1). Section 45(4) categorically states that where there is a transfer by way of distribution of capital assets and where such transfer is due to dissolution or otherwise of the firm, the Assessing Officer was entitled to treat the market value of the asset on the date of the transfer as full value of the consideration received. This latter part of section 45(4) is not there in section 45(1). Therefore, one has to read the expression "full value of the consideration received/accruing" under section 48 de hors section 45(4) and if one reads section 48 with section 45(1) de hors section 45(4) then the expression "full value of consideration" in section 48 cannot be the market value of the capital asset on the date of transfer. In such a case, we have to read the said expression in the light of the two judgments of the Supreme Court in the case ofCIT v. George Henderson and Co. Ltd [1967] 66 ITR 622 and in the case of CTT v.Gillanders Arbuthnot and Co. [1973] 87 ITR 407 in which it has been held that the expression "full value of the consideration" does not mean the market value of the asset transferred, but it shall mean the price bargained for by the parties....
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....dgment of the Supreme Court that full consideration cannot be construed to mean the market value of the asset transferred. The Legislature, in its wisdom, has amended only section 45(4) by which the market value of the asset on the date of the transfer is deemed to be the full value of consideration. However, such amendment is not there in section 45(1)." 6.4 The AO has not brought any material on record to show that actual consideration received by the appellant is more than the consideration shown by the appellant. Section 45 talks about substitution of FMV with the full value of consideration only in certain special circumstances, such as, determination of value of damage as a result of flood, riot, accident, fire, etc (Sec. 45(1A). Section 45(4) also prescribes that the fair market value be deemed to the full value of the consideration in respect of distribution of capital asset on the dissolution of a firm. Similar provisions are in section 50C. Only under these specific instances prescribed under the Income Tax Act; the FMV can be substituted with the amount of full value of consideration. Broadly, all such situations, where FMV can be substituted for full value of c....
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.... property as per section 23(l)(a) has to be determined first. Annual Value is the amount for which the property might be let out on a yearly basis. In another words, it is the estimated rent that the landlord could get if the property was rented out. The Annual Value of Let-Out House Property, according to me, has to be worked out as under: Gross Annual Value - Municipal Taxes paid Where Gross Annual Value = Higher of Actual Rent Received or Expected Rent Expected Rent = Higher of Municipal Value or Fair Rental Value but restricted to the Standard Rent 7.4 The ratio laid down in the case of Dr. Prabha Sanghi, 139 ITD 504, is held applicable here. In the case of Dr. Prabha Sanghi, the Hon'ble ITAT, New Delhi has specifically held that two houses which were earlier let out in preceding years remained vacant wholly during the relevant year. Therefore, the Annual Value (AV) of these two properties which first determined u/s 23(1 )(a) becomes NIL after allowing the effect of section 23(l)(c), [in another words vacancy allowance] as there is no dispute on vacancy of these properties for entire year. Thus, the AV determined u/s 23(l)(a) will become ....