AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (3) TMI 517
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.... of Rs. 88,97,000/- (1,30,77,000 - 41,80,000) U/s. 68 as investment in purchase of property from undisclosed sources. 3. That under the facts and circumstances, both the lower authorities erred in law and on merits in not accepting that the assessee has been into real estate business also and in rejecting the books of accounts for real estate business. Consequently, erred in not accepting the real estate P & L a/c. showing sale of Indirapuram property at Rs. 1,31,00,000/- as a business receipt and further erred in treating the Indirapuram property as Capital Asset and consequently calculating Short Term Capital Gain (STCG) at Rs. 80,04,500/- (1,31,00,000 - 50,95,500). 4. That under the facts and circumstances, both the lower authorities erred in law as well as on merits in not allowing the loss of Rs. 70 lacs suffered on account of forfeiture of advance given against Panipat property and also erred in not treating it as business loss. 5. That without prejudice to G.N. 4, alternatively, the loss of Rs. 70 lacs should have been allowed as short term capital loss eligible for setting off against any short term capital gain (STCG). 6. That under the facts and circumstances, bot....
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....n. This shows that the cause of overwriting is not manipulation or due to shaking of hand of the writer but due to some problem with the pen or lack of proper base or due to nervousness at the time of receipt of notice Without prejudice to above provisions of Section 292BB was introduced w.e.f. 1-4-2008 , according to which, where an assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner. Where the assessee has raised objection regarding issue of notice before the completion of such assessment or reassessment, the provisions contained u/s 292BB will not be applied. Since no objection has been raised by the appellant during assessment proceedings therefore provisions of Section 292BB are applicable. TH....
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.... in the handwriting of assessee himself The numericals "0", "1" & "9" are common in the date and telephone no. It will be noticed that the manuscript of these 03 numericals in the date and in the telephone no. are clearly not of the same person being interpolated / overwritten subsequently with shaken hands There is no shivering in the hands of the assessee while writing as is apparent from his signatures, the time put and the telephone no. put by assessee himself There was no reason for the assessee to do overwriting on the date of service while there existed a strong reason for the A.O. for overwriting, for showing the service in time Even in the complete order sheet taken through RTI there is no mention of any service of notice on 30.09.11 Had the service being there on 30.09.11, there was no reason for the assessee to put the time of receipt of notice as "2 PM" Had the service took place on 30.09.11 by hand, there was no reason for sending the notice by speed post it was reed, on 04.10.11 at 2:42 PM, which must has been sent after 30.09.11 since speed post is served within 24 hours During appeal proceedings, the assessee duly filed his affidavit Dtd.03.01.15 men....
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....aking any charge of interpolation then he should have then asked for forensic examination. Under these circumstances, the benefit of doubt cannot be given to the assessee. Accordingly, we hold that notice was served on to the assessee on 30.9.2011. Accordingly ground No. 1 is dismissed. 6. Now coming to issue of addition of Rs. 88,97,333/- made u/s 68 and also other grounds, the facts in brief are that as per AIR details, it was found that assessee has purchased property bearing Hall No.3 & 4 Ground floor, under Block No. A & B, Gaur Gravity, Gaur Green city, Plot No. 8, Vaibhav Khand, Indrapuram, Ghaziabad. Information was also sought by the AO u/s 133(6) from the Sub Registrar, Ghaziabad, wherein it was intimated that the sale consideration of the said property was Rs. 41,80,000/- and the value as per Stamp Valuation Authority was Rs. 1,30,77,000/. The assessee's contention was that assessee has purchased the property at sum of Rs. 41,80,000/- on which stamp duty paid was 9,15,500/- and, therefore, the total cost to the assessee was Rs. 50,95,500/-. However, the stamp duty was paid on the circle rate at Rs. 1,30,77,000/- as per the sale deed dated 11.8.2009. The AO further noted....
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....income. Since he had already made the addition of Rs. 88,97,000/- on account of addition u/s 68 being a difference amount in purchase and sale consideration, therefore, he did not added separately the short term capital gain of Rs. 88,04,500/- as it relate to the same transaction. 9. AO again disallowed the loss of Rs. 70,00,000/- claimed on the forfeited advance given for purchase of property at Panipat on the ground that the agreement with these two ladies was made on Rs. 100 stamp paper, because, neither the date was mentioned on which these stamp papers were purchased nor the date on which these two agreements were executed were made available. He had also sent notices u/s 133(6) from both the ladies. In response the two ladies have confirmed to have received the amount Rs. 35,00,000/- towards advance but he observed that no where it has been stated that these advances were forfeited by them. Accordingly, he disallowed the claim of loss of Rs. 70,00,000/- on account of forfeiture of account. 10. Ld. CIT(A) in so far as rejection of assessee's claim of new business venture with regard to transaction of purchase and sale of Indirapuram, Ghaziabad property had rejected the said ....
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....ocuments are filed. 5. Copy of lTR of A. Y. 2010 -2011 & 2011 - 2012 are filed 6. As the summons dtd. 30.09.2014 for 09.10.2014 have been received on 08.10.2014 and there are already some pre - engagements, therefore, appearance cannot be made on 09.10.2014. We had filed letter earlier and now we are sending details as required by your goodself." 12. In sums and substance the Ld. CIT(A) after considering the entire facts has disallowed the adjustment of loss of Rs. 70,00,000/- and the claim of business loss in the following manner :- "The property transaction entered into by the appellant during the year in respect of Indrapuram property and Panipat property were not reflected in the return of income. The claim of the appellant that the property transactions were part of a new business started by the appellant is not backed by any evidence in subsequent returns. The appellant has claimed that it had got the books of account in respect of real estate transactions audited, but though the audit report was produced however the books of accounts or the vouchers of expenses were not produced. No revised return showing the profit/loss in respect of real estate business was fi....
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....,97,000/- under section 68, without prejudice to the above addition by invoking section 68 in respect of cash payment made in purchase of Indrapuram property on the basis of Circle Rate applicable for the area. The perusal of the facts of the case show that the appellant has himself shown a rise of 300% in the value of the property from a purchase price of Rs. 41,80,000/-. to a sale price of Rs. Rs. 1,31,00,000/- within the same year. In any market in any area under any conditions this is impossible. Though the provisions of Section 50C are not applicable in case of a purchaser however keeping in view the specific facts of the case, without prejudice to above, the addition of Rs. 88,97,000/-made by the Assessing Officer is upheld." 13. We have heard the rival submissions and also perused the relevant finding given in the impugned order as well as material referred to before us. Though all the three issues are by and large interlinked, but we will first deal with the issue of addition of Rs. 88,97,000/- made by the AO u/s 68 by taking the difference between the purchase consideration and circle rate as unexplained investment/credit. It is an undisputed fact that the purchase consid....
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.... business activity started in this year. - On advice of counsel, the A/c of real estate business were audited vide audit report Dtd.30.09.10 and audit report, audited financial A/c and computation of income were filed to the A.O. during asstt. However, since the net result of this business was Rs.(-)1695/-, therefore it was not creating any tax liability, hence as per the advice of counsel, no revised return was filed. - During asstt., audited bal. sheet, audited report and computation of income of real estate business were filed to the A.O. - The A.O. has also abstracted the audited P&L A/c in the asstt. Order. - The property was purchased with the intention of its sale after getting it renovated. - Hence the property purchased on 11.08.19, thereafter incurred Rs. 7,63,000/- on its alterations and construction and then sold on 27.01.10 i.e. within the same year, clearly shows the intention of the assessee not to get the property as a capital asset but as a stock of newly started real estate business. - The assessee produced complete books of A/c etc. wherein no discrepancy was pointed out, hence the A.O. is wrong in mentioning that books and supporting of this business....
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....eds to verify and examine the cost of improvement. Accordingly, we hold that sale of Indirapuram property is to be taxed under the head short term capital gain and not under the head business income. However, the computation of short term capital gain would be done by the AO after taking in to consideration any cost of improvement if the assessee provides the details. 18. Lastly, coming to the claim of loss of Rs. 70,00,000/- of forfeiture of advance given for purchase of property of Panipat, we find that there is no dispute that assessee has entered into an agreement for purchase of property at Panipat from Mrs. Usha Saluja and Mrs. Veena Saluja for Rs. 2.5 Crore against which the assessee had given Rs. 35,00,000/- to each of the ladies as advance, that is Rs. 70,00,000/-. The details of such advances given are as under :- Intending Seller Advance Given Total Agreed Amount Copy of agreement Cheque/DD Date Usha Saluja 95537 04.02.2010 25,00,000/- Yes 346474 04.03.2010 10,00,000/- Veena Saluja 95538 04.02.2010 25,00,000/- 346473 04.03.2010 10,00,000/- Yes 19. The factum of the payment of advance to these two....