AI Drafter 
TaxTMI 
TaxTMI 
2021 (7) TMI 725
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....s of the case and in law, ld. CIT(A) has erred in confirming the action of the ld. AO in making addition of Rs. 5,39,711/- U/s 43CA of the Income Tax Act, 1961. The action of ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the said addition of Rs. 5,39,711/-. 2. The assessee craves its right to add, amend or alter any of the grounds on or before the hearing." 2. The hearing of the appeal was concluded through video conference in view of the prevailing situation of Covid-19 Pandemic. 3. The brief facts of the case are that the assessee firm was engaged in the business of real estate including PGA club house in the name and style of Spytech Buildcon. The ....
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....re raised before the ld. CIT(A) which is contended in para 2.2. of the order of the ld. CIT(A) and the same is reproduced below: "Provisions of Section 43CA were introduced by Finance Act 2013, w.e.f 01.04.2014 (i.e. AY 14-15). Thus, Section 43CA had applicability only on those transactions for sales, wherein both the agreement to sale and registered sale deed were executed after 1.4.2013. It is undisputed that, in the case at hand, the assessee firm, for the purpose of sale of flats, had entered into agreement for sale prior to 1.4 2013 (Refer Table above or at Page 2 of AO Order). It is submitted that when agreement to sale of flats were entered and the sale consideration was decided, provision of Section 43CA w....
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....013. It is submitted that at the time of executing the agreements for sale ()Plats, the assessee firm had decided the sales consideration for each of flats to A be sold Thereafter, the assessee firm lost all its right to make any changes into the terms and conditions for the sale of flats, including the value at which the flats were to be sold. It is submitted that the assessee firm received the entire amount of sale consideration, pertaining to Studio No. F, of Rs. 10,58,029 on 4.05.2012 i.e. at the time of booking of such flat (PB: 1). Further, the amount of consideration pertaining to J002 was to be received before 15.03.2013 as per the agreement to sale. (PB: 5) It is trite law that any provision of the Income....
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.... section 43CA when the assessee has shown the sale consideration less than the Stamp duty valuation. 8. We have considered the rival contentions of both the parties and perused the material placed on record. As per facts of the present case, the assessee firm is engaged in the business of real estate development and during the relevant previous years, sold three flats No. J-001, J-002 and Studio No. 5 from its residential project Pearl Green Areas and all flats were sold at the value less than Fair Market Value (FMV)/DLC as on the date of registration of the sale deed. However, according to the ld. AR, for all these flats, the assessee firm had entered into agreement to sell prior to the start of the relevant previous year i.e. 01/04/201....
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....o the date on which provisions of Section 43CA of the Act are applicable i.e. on 01/04/2013. It is pertinent to note that the Legislature has specifically provided the remedy for a situation where the property is sold by an agreement and subsequently a sale deed is executed. Thus, in case of any difference of date of registration of the transfer of asset and date of agreement, then the value assessable by the Stamp Duty Authority in respect of such transfer, the date of the agreement shall be taken. For ready reference, provisions of Section 43CA are reproduced as under: 43CA. (1) Where the consideration received or accruing as a result of the transfer by an assessee of an asset (other than a capital asset), being land or buildi....
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.... of sub-section (3) shall apply only in a case where the amount of consideration or a part thereof has been received by way of an account payee cheque or an account payee bank draft or by use of electronic clearing system through a bank account ^93[or through such other electronic mode as may be prescribed^94] on or before the date of agreement for transfer of the asset. As per sub-section (3) and (4) of section 43CA, the benefit of prior agreement is granted if the consideration is received at the time of agreement other than cash. In the case in hand, the booking is claimed to have been made prior to 01/04/2013 whereas the sale deeds were executed after 01.04.2013 which falls in the previous year relevant to the assessment year under c....