TaxTMI 
TaxTMI 
2026 (3) TMI 535
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....under section 43CA of the Act [Rs. 63,37,500/-] 1. On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (hereinafter referred to as "Ld. CIT(A)'] erred in upholding the addition of Rs. 63,37,500 made by the Assessing Officer under the provisions of section 43CA of the Act. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not considering the allotment letters issued as "an agreement" as envisaged in section 43CA(3). 3. On the facts and in the circumstances of the case and in law, the Id. CIT(A) failed to appreciate that the value of the consideration was fixed between the appellant and the buyers while issuing the allotment letters, which were issued even prior to the date of insertion of section 43CA in the Act, and the value of the consideration was agreed on the date of booking itself. 4. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in ignoring that the provisions of section 43CA are not applicable in the instant case, since the said section was introduced by the Finance Act, 2013 w.e.f. 0....
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....0%, being curative in nature had retrospective effect from the day 43CA was introduced in the Act. Disallowance under section 14A [Rs. 1,19,32,795/-] 7. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the addition of Rs. 1,19,32,795 made under section 14A of the Act. 8. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the appellant had not earned any exempt income during the year under consideration and hence the question of any disallowance under section 14A does not arise. 9. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the application of Rule 8D while computing the disallowance under section 14A. 10. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not considering the fact that the investments were made for strategic reasons in group concerns and not for earning exempt dividend income. 11. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in upholding the adjustment of disallowance of proportionate intere....
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....primarily challenges two distinct additions. Firstly, the addition of Rs. 63,37,500/- under Section 43CA of the Act, regarding the difference between the sale consideration and the Stamp Duty Valuation (SDV). Secondly, the disallowance of Rs. 1,19,32,795/- under Section 14A read with Rule 8D, both under normal provisions and in the computation of book profits under Section 115JB. 5. In Ground Nos. 1-4 of the appeal the primary grievance of the Assessee is that the AO applied the Stamp Duty Value prevalent on the date of registration (FY 2015-16) rather than the value prevalent on the date of allotment/booking (FY 2012-13) 5.1 Briefly stated the facts qua the issue in dispute are that Assessing Officer observed that during the year under consideration, certain properties i.e. flats developed by the assessee were sold by the assessee and registered for Stamp Duty purposes, but sale consideration reported in the registration documents was lower than the value which was determined by the Stamp Duty Value Authorities. The assessee contended that all those flats were sold in the year 2012-2013, but were registered in the year 2016. The assessee referred to the provisions of section....
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.... allotment letter there is mention of receipt of initial booking amount. Moreover, section 43CA(3) of the Act states that, "where the dated of agreement fixing the value of consideration for transfer of the asset and the date of registration of such transfer of asset are not the same, the value referred to in sub- section (1) may be taken as the value assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer on the date of the agreement. The agreement has been defined in the Oxford dictionary "as a negotiated and typically legally binding arrangement between parties as to a course of action." In this case, it is mentioned in the allotment letter that "immediately after the execution of regular agreement for sale between us this allotment letter shall be returned and the same shall have no effect and it will be deemed null and void." Therefore, such allotment letters can only be considered as an intention of the builder to sale and not as an agreement as mentioned in section 43CA(3) of the Act. In this regard, it is stated that section 43CA is a deeming fiction of the Act and it is settled law that deeming section....
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....licable. The relevant finding of the Tribunal in Kolte patil Developers ltd (supra) is reproduced as under: "13. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A)/NFAC and the paper book filed by both the sides. We find the Assessing Officer in the Instant case made addition of Rs. 25,02,250/- in respect of 8 flats on the ground that the market value of these flats was Rs. 2,73,16,150/- whereas the assessee company has registered the flats for a consideration of Rs. 2,48,13,900/- on the basis of agreement Value and therefore, the provisions of section 43GA of the Act are applicable. We find the CIT(A)/NFAC, relying on the decision of the Pune Bench of the Tribunal in the case of Rahul Constructions (supra), deleted the addition in respect of certain flats where the difference is less than 10%. He, however, sustained the addition in respect of remaining flats where the difference is more than 10% between the agreement value and the market price. It is the submission of the Ld. Counsel for the assessee that since the assessee had received part of the consideration in cheque as per agreement much prior to the ....
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....x) of the Act. Since the assessee has paid the parts of consideration as per the terms and conditions of allotment through banking channels prior to the execution of Sale agreement, we are of the view that the provisos to sec.56(2)(x) shall apply to the facts of the present case. Accordingly, the stamp duty valuation as on the date of respective Allotment letters should be considered for the purposes of sec. 56(2)(x) of the Act. Hence the AO was not justified in considering the stamp duty valuation as on the date of execution of agreement to sell. 11. On a perusal of record, we notice that the details of stamp duty value as on the date of respective allotment letters was not brought on record. Since we have held that the stamp duty valuation as on the date of respective allotment letters should be considered for the purpose of sec.56(2)(x) of the Act, it is imperative on the part of the assessee to show that the actual consideration was equal or less than the stamp duty valuation as on the date of issue of respective allotment letters. Accordingly, we are restoring this issue to the file of AO for the limited purpose of comparing the actual sale consideration with the stam....
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....14 5 Stamp Duty Ready Reckoner Rates for year 2012, 2013, 2015 and 2016 15-18 6 Computation of Income 19-20 5.11 The Assessee has furnished additional evidence, including bank statements and SDV Ready Reckoner rates for the year 2012, which were not fully examined by the lower authorities. These documents go to the root of the matter. Consequently, we remit this issue to the file of the Assessing Officer for the limited purpose of: 1. Verifying the receipt of part consideration via banking channels at the time of allotment. 2. Comparing the actual sale consideration with the SDV prevalent on the date of the Allotment Letter. 5.12 The ground No.1-4 of appeal of the assessee were accordingly allowed for statistical purpose. 6. The ground No.5 was not pressed by the assessee and accordingly same dismissed as infructuous. 7. The ground No.6 is alternative remedy in respect of ground Nos. 1-3 which we have already restored to the file of the Assessing Officer (A.O), and therefore this ground seeking alternative remedy is also restored to the file of the assessing officer for deciding afresh after considering submission and documentary evid....
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....total assets as appearing in the balance sheet of the assessee, on the first day and the last day of the previous year. Particulars Opening Balance of total assets 3,22,58,36,178/- Closing Balance of total assets 3,33,37,85,117/- Total 6,55,96,21,295/- Average of total assets 3,27,98,10,648/- [3] An amount equal to one-half per cent of the average of the value of investment, income from which does not or shall not form part of the total income, as appearing in the balance sheet of the assessee on the first day and last day of the previous year. i.e. Rs. 101,08,15,481/- 50,54,077/- Disallowance u/s. 14A read with Rule 8D [1]+[2]+[3] 1,19,32,796/- 9. On further appeal, the learned CIT(A) upheld the disallowance made by the Assessing Officer. 10. We have heard rival submissions of the parties and perused the relevant material on record. The principal contention of the learned counsel for the assessee is that no exempt income was earned during the year under consideration and, therefore, no disallowance under Section 14A could have been made. Reliance was placed on the judgment of the jurisdictional High Court in Pr. CIT ....
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.... issuing the allotment letters, which were issued even prior to the date of Insertion of section 43CA in the Act, and the value of the consideration was agreed on the date of booking itself. 4. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in ignoring that the provisions of section 43CA are not applicable in the instant case for 7 out of 8 flats, since the said section was introduced by the Finance Act, 2013 w.e.f. 01-04-2014, whereas the booking and allotment to the buyer with respect to these 7 out of & flats were already made prior to FY 2012-13, Le, much prior to the insertion of provision in the Act. 5. Non-applicability of section 43CA when the appellant applies Percentage of Completion Method (POCM) for revenue recognition (a) Without prejudice to grounds above, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating that the revenue was required to be recognized under the Percentage of Completion Method ("POCM") as per the Guidance Note and Accounting Standards issued by the ICAI. (b) Without prejudice to grounds above, on the facts and in the circumstances of th....
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....of the case and in law, the Ld. CIT(A) erred in not appreciating that the disallowance computed under section 14A r.w.r 8D does not represent actual expenditure incurred for earning exempt income and the same therefore, need not be added back while computing book profit under section 115JB of the Act. 12. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has failed to understand that section 115JB would cover only direct expenses which are actually been debited to Profit and Loss account. The appellant has not debited any actual expenditure relating to the earning of exempt income, therefore, the provisions of section 14A cannot be brought into the computation of book profit under section 115JB of the Income Tax Act, 1961. 13. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not following the ratio of the decision of the Special Bench of the Hon'ble Tribunal in the case of Vireet Investments (P.) Ltd (2017) 165 (TR 27 (Delhi- Trib) (5B), thereby violating the principles of judicial discipline. Treatment of deferred tax [Rs. 98,966/-] 14. On the facts and in the circumstances of t....