TaxTMI 
TaxTMI 
2019 (2) TMI 1924
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.... justified in accepting the assessee's computation of long term capital gains at Rs. 1,61,00,375/-instead ofRs. 2,30,44,395/- as computed by theAO, without appreciating the fact that if the value of the property valued by the Stamp Duty Authorities is more than the sale proceeds received by the assessee the capital gains on such transfer of property is to be recomputed on the basis of the rates taken by the Stamp Duty Authority as per the amended provisions of section 50C of the I.TAct, 1961. Apropos ground no. 1 - Addition on account of accommodation entry: 3. Brief facts of the case are as under: The Assessing Officer noted in the assessment order that the information has been received from the Director General of Income Tax (Investigation), Mumbai [DGIT(Inv), Mumbai] vide letter No.DGIT(Inv)/ Information/PJ/2013-14 dated 07.04.2014 intimating that the assessee company is one of the beneficiaries in the accommodation entry operation carried out by Shri Praveen Jain in Mumbai. That as per said information, the beneficiaries took the entries in the nature of sales, unsecured loans and share application money. That in the case of the assessee, it is informed that the has acc....
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....n from JTC was filed to the A.O. showing the advance was subsequently returned in A.Y. 2013-14 towards cancellation of flat. The ld. CIT(A) further noted that JTC had given its PAN, address in its confirmation. Hence, the ld. CIT(A) opined that the letter from JTC clearly establishes the nature of the said transaction. 7. The ld. CIT(A) further observed that the A.O. has not disputed these facts that these details were sufficient for assessing officer to have made any further inquiries from JTC but he failed to do so. That nothing has been brought on record to establish that the above transaction was "accommodation entry" and it is seen that the assessing officer already had the confirmation that the amount was returned by the assessee not in cash but through cheques. That the fact that this was done by cheques on 07.06.2012 & 09.06.2012 & 09.06.2012, which was even before the assessing officer received information from Investigation Wing on 07/04/2014 also strongly indicates that the above transaction cannot be treated as "accommodation entry" in absence of any other proof. That it is trite law that suspicion of the highest order cannot take place of evidence. That in the instant....
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....He submitted that the concerned party from whom the assessee has obtained the said advance was controlled by Shri Praveen Kumar Jain Group. Hence, he submitted that the presumption that the said accommodation entry is bogus, has been correctly gathered by the A.O. 13. Per contra, the ld. Counsel of the assessee submitted that the assessee has genuinely received an advance for flat purchased with all documentary evidence. He submitted that the A.O. has not disputed the fact that the assessee is engaged in the construction business and he is constructing multy story building. He further submitted that the A.O. is accepting that the assessee is receiving advances from customers for flat. However, he submitted that the present advance has been not accepted by the A.O. only on the ground that the information was received that the entity giving the advances was related to Shri Praveen Kumar Jain Group. The ld. Counsel of the assessee pleaded that the confirmation, the address, PAN number and all the other details of the entity from whom the advances was received have been duly submitted and no defect has been pointed out in that. He further submitted that later on, on non fructification....
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.... to said income. That on perusal of the details submitted, it is noticed that the assessee has sold Tenement No.B 38 /149 situated at Sunder Nagar, Kalina, Santacruz (East), Mumbai - 400 098 on 05.08.2011 for a consideration of Rs. 2,20,00,000 and as Stamp Duty Registration, market value of said property was Rs. 1,37,37,500/-. 17. From the details submitted, the A.O. further noticed that the assessee has entered into another agreement with the purchasers for transfer of rights/of piece or parcel of titbit plot admeasuring 331.15 sq.mtrs adjacent to Tenement No.B38/149. He noted that the assessee has considered the sale value for said plot at Rs. 80,00,000 and therefore, taken the entire sale consideration at Rs. 3,00,00,000 and computed Long Term Capital Gain accordingly. The market value of the said property as per Registration documents is mentioned as Rs. 1,64,75,600 as against the value received by the assessee of Rs. 80,00,000. 18. The assessee was asked by the A.O. to explain as to why the tit-bit land was transferred at a lower price than the stamp duty value. Further, taking into consideration the fact that the market value of the transaction of lease rights was Rs. 1,64,....
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....onveyed by Kalina Cooperative Housing Society and therefore, the lease right in tit bit plot cannot be taken as a separate asset from tenement. The assessee submitted that due to dispute with purchaser the second agreement was registered in 2014 instead of 2011, but whole consideration has been received in FY 2011-12. In view of the above, the assessee was asked to furnish the market value/value for stamp duty purposes of said tit bit plot as on 31.03.2012. The assessee submitted that the stamp duty value for FY 2011-12 for said tit-bit land was ^1,49,44,020 and submitted the copy of ready reckoner for relevant period and calculation of stamp duty for FY 2011-12. The assessee requested to treat the entire transaction as a single transaction though two sale deeds were entered for technical reasons. 21. However, the A.O. was not satisfied. He rejected the assessee's contention by holding as under: 9.7. The submission of the assessee has been considered, however, the same is not acceptable. It is seen that both the transactions are different as vide first agreement the Tenement No.B38/149 situated at Sunder Nagar, Kalina, Santacruz (East), Mumbai was sold and vide second agreemenet....
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....ed in the hands of the assessee company. 23. Against the above order, the assessee appealed before the ld. CIT(A). 24. The ld. CIT(A) deleted the addition by holding as under: 5.5.3 A perusal of the deed of lease dated 22.07.2014 on page 3 shows that "As per the terms of Lease Agreement the leased tit-bit land is to be held by the lessee only along with the tenement No. 838/149 and not separately. In the case of transfer of tenement the tit-bit area will be automatically stand transferred." Thus, it can be seen that despite there being different agreements, the tenement and titbit area were required to be sold together. The total consideration received for the entire property was Rs. 3 crore against stamp duty valuation of Rs. 1,37,37,500/- for tenement and Rs. 1,49,44,020/- for titbit plot adding to Rs. 2,86,81,520/-. There is no dispute on these figures. Thus it is seen that the total sales consideration is higher than the valuation adopted by Stamp Duty Valuation Authority. 5.5.4 Section 50C of the Act can be invoked when there is "transfer by an assessee of a capital asset, being land or building or both". It cannot be invoked if what is being transferred is not "capital ....