TaxTMI 
TaxTMI 
2023 (11) TMI 1229
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....3-2023 passed thereunder is therefore ah initio void, ultra vires and null in law. 2. FOR THAT on a true and proper interpretation of the scope and ambit of the provisions of s. 68 of the Income Tax Act, 1961, the Ld. Commissioner of Income Tax (Appeals)-N.FAC. was absolutely in error in impliedly upholding the action of the Ld. Deputy Commissioner of Income Tax, Circle 8(1), Kolkata without proving any infringement thereof and the purported conclusion reached on that behalf is entirely baseless, unlawful, and invalid. 3. FOR THAT the spurious action of the Ld. Commissioner of Income Tax (Appeals)-N.F.A.C. in upholding the addition of Rs. 53,29,150/- resorted to by the Ld. Deputy Commissioner of Income Tax, Circle 8(1). Kolkata without any proper application of mind on the rejoinder of the appellant is absolutely arbitrary, unreasonable, and perverse. 4. FOR THAT the specious approach of the Ld. Commissioner of Income Tax (Appeals)-N.F.A.C. of misreading evidence, considering improper facts, failing to consider proper position in law and thus coming to an erroneous finding in impliedly sustaining the addition of Rs. 53.29,150/- made by the Ld. Deputy Comm....
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....nder consideration. When the assessee was asked to explain the differential amount of sales, it was submitted that the transaction with all these parties are regarding sale of immovable property and the amount appearing in the Individual Transaction Statement (ITS) is the value adopted by the stamp valuation authority but the actual transactions took place in the preceding years and the sale consideration has been received in parts which has been duly offered to tax in the year of receipt as sales turnover. The assessee filed complete details about agreement to sale with each of the parties along with the figure of actual sale consideration and the year in which such sales consideration has been disclosed as sales. However, the ld. Assessing Officer was not satisfied as he found that the information given by the assessee suffers from certain flaws and after discussing in detail finally made the addition for suppressed sales at Rs. 53,29,150/-. 3.3. The ld. Assessing Officer also noticed that as per the ITS details, the assessee has purchased a flat for a consideration of Rs. 44,24,850/- but in the reply filed by the assessee on 28/09/2015, it is submitted that during Financial Y....
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.... of accounts in the past strictly on the mercantile system of accounting and, therefore, even when the total sale consideration was not received, the advance received were treated as sale but at a later stage, assessee has started maintaining books strictly as per mercantile system of accounting and now only when the sale transactions materializes and consideration is received then sale is booked. He also submitted that complete details of the bank transaction with each of the parties referred by the ld. Assessing Officer in para 3 of the assessment order has been filed along with the ledger account showing the details of payments received. He also submitted that Section 50C of the Act is not applicable as alleged transactions are business transactions. Lastly, as regards the unexplained investments, it is submitted that the said investment was made by the assessee through its disclosed bank account and was appearing in the personal balance sheet. Since in the sole proprietorship concern, this investment was not appearing inadvertently, it was submitted that no purchase of immovable property has been made. He stated that assessee made an investment in purchase of property for a con....
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.... is opening balance and brought forward from the preceding year, Section 68 of the Act cannot be invoked for the alleged sum which the ld. Assessing Officer has applied for making the impugned addition. Details of conveyance deed has also been filed before us to prove that the advance received from all the above stated three parties have been adjusted against the sale consideration for sale of flats. We are thus of the considered view that the alleged sum received from three parties in earlier years is an advance for purchase of flat from assessee and is a genuine transaction and attained finality in the form of conveyance deed and, therefore, no addition is called for at Rs. 48,00,000/- for unexplained advance. Thus, Ground No. 2 raised by the assessee is allowed. 9. Now we take up Ground Nos. 3 & 4 which relates to addition for supported sales amounting to Rs. 52,29,150/-. We notice that the ld. Assessing Officer based on the ITS details noticed that the assessee has sold various immovable properties (in the form of residential flats) each valuing at Rs. 30,00,000/- or more and the details of the same are as follows:- 9.1. Further we notice that the assessee has filed detai....
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.... in sales turnover in the year 2012-13 Rs. 9,50,000/- and in the year 2013-14 Rs. 20,33,700/- though it was registered on 19/07/2013. The value of Rs. 54,76,900/- represents fair market value. The copies of sale deed in enclosed. SI. No. 6- Transaction amount -Rs. 48,31,538/-. The above transaction relates to sale of flat at 2B, S.N. Roy Road, Kolkata-700034 to Mr. Samir Kr. Chatterjee as per agreement dtd. 15/08/2002 and amount of Rs. 15,47,000/- has been included in sales turnover in the year 2012-13 though it was registered on 27/06/2013. The value of Rs. 48,31,538/- represents fair market value. The copies of sale deed and agreement are enclosed. SI. No. 7- Transaction amount - Rs. 44,12,850/-. The above transaction relates to purchase of flat at 17, S.N. Roy road, Kolkata- 700038 by Mr. Anil Kr. Paik. The value of Rs. 44,12,850/- represents fair market value. The copies of purchase deed is enclosed. SI.No. 8- Transaction amount - Rs. 38,74,800/-. The above transaction relates to sale of flat at 71, Roy Bahadur Road, Kolkata-700053 to Mr. Sukhdew Singh and the amount of Rs. 7,00,000/- has been included in sales turnover in the year 201213 and the bala....
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....egistered conveyance deeds and ledger accounts exhibiting that in the actual sale transactions with all these parties have either been offered as sales in the preceding year for the year under consideration and even in some cases, the balance amount has been received in the subsequent financial years and have been offered to tax accordingly. Since the genuineness of all the transactions have been proved beyond doubt and complete details of transactions with each of the parties has been examined by us, we notice that addition made by the ld. Assessing Officer taking the value adopted by the stamp valuation authority cannot be held to be justified as the ld. Assessing Officer had not made the relevant enquiries in accordance with the statute for examining the veracity of the transactions. 11. Further on examining the details filed by the assessee, we find that all the alleged transactions are business transactions and the immovable property in question are part of the stock-in-trade of the assessee sole proprietorship concern and cannot be considered as a capital asset. The provisions under the Act for making the addition for the difference between the fair market value/value adop....
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....essed sales at Rs. 53,29,150/- is hereby deleted. Accordingly, Ground No. 3 & 4 raised by the assessee are allowed. 12. Last issue for our consideration is Ground No. 5 raised against alleged unexplained investment in purchase of immovable property at Rs. 44,12,850/-. We notice that the assessee during the course of assessment proceedings stated to have not made any new investment in purchase of immovable property during the year as no such investment was appearing in any balance sheet of the sole proprietorship concern owned by him. However, before us details of the investment in the said property has been filed and the purchase consideration has been paid out of the bank account duly disclosed in the income tax return. The copy of the purchase deed has been placed at page 295 of the paper book as per which the Flat at 17, S.N. Roy Road, Kolkata, was purchased for a consideration of Rs. 7,00,000/- and the total payment is made through banking channel. However, as per the stamp valuation authority, the value of the said property for the purpose of stamp valuation is adopted at Rs. 44,12,850/-. On the other hand, purchase consideration paid by the assessee is Rs. 7,00,000/- and t....