TaxTMI 
TaxTMI 
2024 (9) TMI 1911
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....20 as Income U/s 43CA of the Income Tax Act-1961 which is illegal and which deserves to be deleted in the interest of justice. 3. Assessee pray to kindly allow to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal." 3. Insofar as the issue of re-opening of assessment under section 147 of the Income Tax Act, 1961 ("the Act") is concerned, before us, the learned Authorised Representative ("the A.R.") did not make any argument. Consequently, the issue of re-opening of assessment in ground no.1, is dismissed. 4. Ground no.2, relates to addition of Rs. 57,68,020, on account of income under section 43CA of the Act. 5. Facts in brief: - The assessee filed its return of income for the year under consideration on 30/10/2017, declaring a total loss of Rs. (-) 1,06,13,791. A survey under section 133A of the Income Tax Act, 1961 ("the Act") was conducted at the premises of M/s. Tirupati Developers. Based on certain incriminating documents found and impounded during the survey operation, the case of the assessee was re-opened under section 147 of the Act after recording the reasons as req....
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.... DVO's report is Rs. 4,07,68,020 whereas the value as per the actual sale consideration mentioned in the Sale Deed is Rs. 3,50,00,000/-. The difference between the two, i.e. Rs. 57,68,020/- is more than 10% of the actual sale consideration and therefore the appellant's case clearly falls under the purview of section 43CA of the Act. In the written submission filed by the appellant's AR, it has been argued that section 43CA cannot be applied in the appellant's case since the property has certain disadvantages. All these facts have been carefully considered by the DVO while determining the market value and therefore, no further relief can be given on this account. The appellant's AR has also referred to certain judicial decisions in support of the arguments. It is seen that the facts and circumstances involved in the cited cases are totally different from the facts involved in the appellant's case. Therefore, the appellant cannot get relief. Hence, having considered the facts and circumstances of the case, I am of the firm belief that the AO was correct in making the addition of Rs. 67,68,020/- u/s. 43CA of the Act. Therefore, the addition made by the....
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....Deed Date Kh. No. Area Hec. Stamp Duty Value Actual Sale Amount DVO Report Difference 1. 29/03/2016 85/1 & 85/2 0.81 & 0.81 40600000 32400000 32400000 0.00 2. 29/03/2016 72 0.73 22320000 15100000 15100000 0.00 3. 31/05/2016 83 2.63 72000000 35000000 40768020 0.00 Total 3.36 134920000 82500000 88268020 5768020 9. Learned AO has taken each sale deeds in isolation and not as part of one complete deal as per MOU executed on 20.07.2015. The sale deed executed on 31/05/2016 was having the FMV of Rs. 407,68,020/-as against actual sale value of Rs. 350,00,000/-. The difference of Rs. 57,68,020/- was taxed U/s 43CA. 10. While passing the Assessment order, the Learned AO & respected CIT(A) has failed to appreciate the following facts: a) The sale deed executed was the part of one single sale transactions of MOU on 20.07.2015. b) The transaction was buyers dominated transactions and the sale deed was required to be done as per the convenience and comfort of the buyer. c) The property was having lot of litigation and disputes and any denial or....
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....DVO is Rs. 6,81,500/-. In terms of percentage the difference is 7% approximately. The short contention of the assessee is that where the difference between the agreement value and the market value is less than 10% no addition should be made. 5. Similar issue had come up before the Tribunal in the case of Radhika Sales Corporation (supra). The Tribunal deleted the addition by observing as under: "5. We have heard the submissions made by representatives of rival sides and have perused the orders of authorities below. The solitary issue raised in the appeal by the assessee is against the addition of Rs. 10,38,000/- on account of difference in Long Term Capital Gain declared by the assessee and computed by the Assessing Officer after considering the DVO's valuation report. It is an undisputed fact that the assessee has disclosed sale consideration of the land as Rs. 1,10,00,000/-. During the scrutiny assessment proceedings reference was made to DVO for the valuation of property. The DVO vide report dated 30-12-2013 determined the fair market value of the property as Rs. 1,20,38,000/-. The difference between actual sale consideration declared by the assessee and th....
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....he Revenue where the CIT(A) had deleted the unexplained investment in house construction on the ground that the difference between the figure shown by the assessee and the figure of the DVO is hardly 10 percent. 15. Similarly, we find that the Pune Bench of the Tribunal in the case of ITO V/s. Kaaddu Jayghosh Appasaheb, vide ITA No.441/PN/2004 for the asst. yr 1992-1993 and relied on by the learned counsel for the assessee following the decision of the J&K High Court in the case of Honest Group of Hotels (P) Ltd. V/s CIT (2002) 177 CTR (J&K) 232 had held that when the margin between the value as given by the assessee and the Departmental valuer was less than 10 per cent, the different is liable to be ignored and the addition made by the A.O cannot be sustained. 16. Since in the instant case such difference is less than 10 per cent and considering the fact that valuation is always a matter of estimation where some degree of difference bound to occur, we are of the considered opinion that the A.O. in the instant case is not justified in substituting the sale consideration at Rs. 20,55,000 as Against the actual sale consideration of Rs.19,00,000/- disclosed by the as....
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.... consideration received on transfer of an asset (other than capital asset) being land or building or both and provisions of section 50C are attracted on transfer of capital assest being land or building or both. Hence, the decision rendered u/s.50C of the Act giving leverage of minor variation, in the value declared by the assessee and the stamp duty value would equally hold good for variation in the value u/s 43CA of the Act. Thus, from the above decision it can be safely deduced that where the difference between sale consideration declared by the assessee and stamp duty value of an asset (other than capital asset) being land or building or both is less than 10%, no addition under section 43CA of the Act is warranted. 6. Here, it would be relevant to mention that the Finance Act 2018 has inserted a proviso to sub-section (1) of section 43CA providing 5% tolerance limit in variation between declared sale consideration vis-à-vis stamp duty value for making no addition. Similar proviso was inserted by the Finance Act 2018 to sub-section (1) to section 50C of the Act. The said tolerance limit band was enhanced from 5% to 10% by the Finance Act 2020 w.e.f. 01/4/2021. Th....
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....e sale consideration. Clearly, therefore, this insertion of the third proviso to Section 50C(1) is in the nature of a remedial measure to address a bonafide situation where there is little justification for invoking an anti-avoidance provision. Similarly, so far as enhancement of tolerance band to 10% by the Finance Act 2020, is concerned, as noted in the CBDT circular itself, it was done in response to the representations of the stakeholders for enhancement in the tolerance band. Once the Government acknowledged this genuine hardship to the taxpayer and addressed the issue by a suitable amendment in law, the next question was what should be a fair tolerance band for variations in these values. As a responsive Government, which is truly the hallmark of the present Government, even though the initial tolerance band level was taken at 5%, in response to the representations by the stakeholders, this tolerance band, or safe harbour provision, was increased to 10%. There is no particular reason to justify any particular time frame for implementing this enhancement of tolerance band or safe harbour provision. The reasons assigned by the CBDT, i.e., "the variation between stamp duty value....
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....s a precedent". Nothing can be farther from a judicious approach to the process of dispensation of justice, and such an approach, as is prayed for, is an antithesis of the principle of "equality before the law," which is one of our most cherished constitutional values. Our judicial functioning has to be even-handed, transparent, and predictable, and what we decide for one litigant must hold good for all other similarly placed litigants as well. We, therefore, decline to entertain this plea of the assessee." [Emphasis added now] As has been aptly explained above, the rational for holding newly inserted proviso to sub-section (1) to section 50C of the Act as curative in nature, hence, having retrospective application, the same analogy would apply to the provisions of Section 43CA of the Act. Both the sections are similarly worded except that both the sections have application on different sets of assessee. As has been pointed earlier, Section 43CA gets attracted where the consideration received or accrues as a result of transfer of an asset (other than a capital asset) being land or building or both. Whereas, provisions of section 50C operates where the consideratio....
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....as grossly erred in making and CIT(A) has erred in confirming the amount of Rs. 50,00,000 as income U/s 69A, which is illegal and which deserved to be deleted as per law. 4. On the facts and circumstances of the case & in law, the transaction in relation to which the addition of Rs. 50 Lakh is done is not pertaining to the impugned Assessment Year, the addition made by the AO and confirmed by the CIT(A) is illegal and deserved to be deleted as per law. 5. Assessee pray to kindly allow to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal." 14. Insofar as the issue of re-opening of assessment under section 147 of the Income Tax Act, 1961 ("the Act") is concerned, before us, the learned Authorised Representative ("the A.R.") did not make any argument. Consequently, the issue of re-opening of assessment in ground no.1, is dismissed. 15. Grounds no.2 and 5, are general in nature, hence no separate adjudication is required. 16. The sole dispute raised in grounds no.3 and 4, is whether the addition of Rs. 50 lakh is at all sustainable in the hands of the assessee based upo....
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....s merely a DUMB, non-speaking documents which is not backed by any other corroborative evidence. It may not have any evidentiary value & may not constitute adequate evidence without any cogent material & solid corroborative evidence. It's merely an entry in third party records and could not fasten the liability on the Appellant. Validity of addition on the basis of Dumb Documents is well discussed by Hon'ble Chennai ITAT in the case of DCIT Vs. Shri Karuppagounder Palaniswami [213/Chny/2023]. 5. Appellant name not mentioned against Cash Entry: It is a trite law that no addition could be made merely on the basis of presumption, assumption, conjectures or surmises. The name of mentioned in the seized material was "Laskare sir" whereas at all other transactions, "Shree Maya Real Estate Pvt Ltd" was explicitly and clearly mentioned. The ratio laid down by Hon'ble Apex Court in the case of Common Cause Vs. UOI (77 Taxmann.com 432) would also apply here wherein it has been held that the third party entry could not be basis of any addition without any other cogent material. 6. Sale Deed executed in 2016 & Cash Receipt mentioned in 2019: Lear....