TaxTMI 
TaxTMI 
2019 (3) TMI 1297
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.... assessee has sold the above property, whose market value is Rs. 58,19,000/-, at a price of Rs. 30,00,000/-. However, the stamp duty on this transaction was paid of Rs. 4,07,000/-. The said sale deed was signed by Shri Vivek Garg (on behalf of assessee company) and Dr. Ajay Sharma (Purchaser of the property). The said property is situated on main road and is for commercial purpose. As per property document the rental value of the property is fixed at Rs. 285/- per sq. mtr. There is only one witness who put his signature on the registered deed named Shri Sanjay Sharma resident of Meerut. He, therefore, asked the assessee to explain as to why the difference in market value and sale value of Rs. 28,19,000/- should not be treated as unexplained income of the assessee company. 3. It was explained by the assessee that the above two units were sold for Rs. 30 lacs as per registered sale deed which can be verified from the purchasers Dr. Ajay Sharma if so required. Moreover the onus is on the revenue to prove that the assesee company received money over and above the sale price of Rs. 30 lacs. Various decisions were also brought to the notice of the Assessing Officer. 4. However, ....
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....mission. While doing so he further held that the commission does not have any basis and is paid to reduce tax liability. According to him, even provisions of section 40 A (2) (b) debars such payments which are excessive in nature. He accordingly made addition of Rs. 33 lacs to the total income of the assessee and determined the total income of Rs. 38,04,570/-. 6. In appeal, the Ld. CIT(A) upheld the action of the AO by observing as under :- "4.3 I have carefully considered the various enquiries carried out by the A.O. in this regard, the manner in which the A.O. has gathered & analyized the documents & information and the judicious conclusions he has arrived at. I have also carefully considered and examined the submissions and judicial pronouncement submitted by the appellant. The A.O. observed that the appellant had sold the property below the Stamp Duty price. Following up his observation, the A.O. issued Summons to the relevant parties with a view to examine them on oath, made enquiries from the Registrar Meerut, carried out enquiries in the property market and gathered details of other similar transactions, summoned the alleged commission agents, carried out inspect....
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.... on sale of property. At any rate, without prejudice, the disallowance as confirmed is very excessive. 3. That the Appellant Co. reserves its right to add, amend/ modify the grounds of appeal." 9. So far as addition of Rs. 28,19,000/- sustained by the CIT(A) is concerned, the Ld. Counsel for the assessee submitted that the assessee is a company engaged in the business of development/ construction of commercial complex. The above two units which were sold by the assessee in the commercial complex were its stock in trade. He submitted that there is no evidence whatsoever to suggest that the assesse has received any extra money as consideration over and above what has been declared in the registered sale deed. He submitted that the provision of section 50C is not applicable to the instant case since these are stock in trade and not capital asset. He submitted that the provision of section 43 CA are also not applicable to the instant case since those provisions were introduced in the statue book by the Finance Act 2013 w.e.f. 01.04.2014 and the assessment year involved in the instant case is assessment year 2012-13. Further, the two sale instances given by the AO are also n....
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....y the Finance Act 2013 w.e.f. 01.04.2013 are also not applicable to the assessee since the assessment year involved in the instant case is A. Y.2012-13. It is also the submission of the Ld. Counsel for the assessee that the addition made by the Assessing Officer merely on the basis of presumption and suspicion cannot be sustained. 13. I find merit in the above arguments advanced by the Ld. Counsel for the assessee. There is no evidence on record to prove that the assessee has received any extra amount over and above the sale consideration mentioned in the sale deeds. The Assessing Officer has neither pointed out any defects in the books of account nor rejected the same. Since the property sold are not capital asset and are stock in trade, therefore, the provisions of section 50C are not applicable. Further provisions of section 43CA were inserted by the Finance Act 2013 w.e.f. 01.04.2014 and therefore, these provisions are also not applicable to the assessee since the assessment year involved is assessment year 2012-13. 14. I find identical issue had come up before the coordinate bench of the Tribunal in the case of Shri Sastish Arora (supra) where in the Tribunal has dele....
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....d. (f) The market prices can at best be a starting point for further inquiry but they cannot be substituted for the price shown by the assessee in the books of accounts". 9. In view of above discussion, the assessee's appeal is allowed. 10. In the result, assessee's appeal stands allowed. Order pronouncement in open court on,____ /07/2016." 15. Further the two sale instances given by the Assessing Officer are also distinguishable since in one case the property sold was of a three storeyed shop including land and roof rights and the other property is a partly constructed land with all rights whereas the property sold in question is first floor flat without roof rights. The various decisions relied on by the Ld. Counsel for the assessee also supports his case. In this view of the matter I am of the considered opinion that the sale consideration at Rs. 58,19,000/- adopted by the CIT(A) being stamp duty value as against actual sale consideration of Rs. 30 lacs shown by the assessee is not sustainable I, therefore, set aside the order of CIT(A) on this issue and direct the AO delete the addition of Rs. 28,19,000/-. The ground No. 1 of the assessee i....