TMI Blog2011 (11) TMI 508X X X X Extracts X X X X X X X X Extracts X X X X ..... mount over and above Rs. 8 lakhs. Thus, assessee cannot be said to have satisfactorily explained the nature and source of the investment and expenses - Decided against the assessee. Dis-allowance on failure to explain bank entries - Held That:- The AO has estimated the income from commission on account of property dealing at Rs. 3.00 lakhs as against Rs. 1.50 lakhs shown by the assessee. The AO has given no reason for estimating the income from commission at Rs. 1.50 lakhs. CIT(A) has also given no reason for confirming the same. Therefore the addition made by the AO and confirmed by the CIT(A) is deleted - Decided in favor of assessee. - IT APPEAL NOS. 571 TO 573 (CHANDI.) OF 2011 - - - Dated:- 28-11-2011 - H.L. KARWA, D.K. SRIVASTAVA, JJ. N.K. Garg for the Appellant. Ms. Jyoti Kumari for the Respondent. ORDER D.K. Srivastava, Accountant Member The present bunch of appeals filed by the assessee is directed against three separate orders passed by the ld. CIT(A) on 30.3.2011 for assessment year 2005-06, 2006-07 and 2007-08. Major issues in all the three appeals are common. We therefore find it convenient to dispose off the present bunch of appeals by a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5, the ld. counsel for the assessee submitted that charging of interest u/s 234B of the Act was consequential upon assessment. Levy of interest u/s 234B of the Act is mandatory and automatic upon completion of assessment. It is required to be mandatorily charged upon assessment. In this view of the matter, Ground No. 5 is also dismissed. 7. We are now left with only one ground of appeal, i.e., ground no. 3. The facts giving rise to the issue raised in Ground No. 3 are that the assessee was found to have paid a sum of Rs. 27.00 lakhs towards purchase of residential flats (amount paid: Rs. 24.00 lakhs) and purchase of flats (amount paid: Rs. 3 lakhs) in the year under appeal. In addition, the AO added Rs. 90,000/- towards household expenses. Thus the assessee was found to have invested and incurred the expenses to the extent of Rs. 27,90,000/-. The aforesaid figures of investment are admitted by the assessee. The assessee admits to have paid a sum of Rs. 27.00 lakhs towards purchase of flats/plots in the year under appeal. He does not dispute that the AO has also added Rs. 90,000/- towards household expenses. 8. Having found that the assessee has invested/spent a sum of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se as noted in the asstt order though assessee has actually received sale consideration of Rs. 8 lakhs against sale of his land he has attempted to claim and explain investments made on the basis of the presumptive amount of Rs. 38 lakhs on the ground that the stamp duty has been paid on Rs. 38 lakhs. I am afraid appellant cannot be given the benefit of deemed receipt of Rs. 30 lakhs (Rs. 38 lakhs - Rs. 8 lakhs) since there is no evidence of actual receipt of above amount while admittedly the investments have actually been made as noted by the AO in the assessment order. In other words, presumptive income of Rs. 30 lakhs over and above actual sale consideration of Rs. 8 lakhs cannot be said to have been actually received by the appellant. No doubt full effect is required to be given to the deeming provisions but then same in my opinion is required to be given as far as applicability and implementation of deeming provisions is concerned. In my considered opinion deeming provisions cannot be extended to a situation which has not been visualized. The fact of the matter is that appellant has received only Rs. 8 lakhs as sale consideration of the land and therefore no benefit of further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 Taxman 103 (Bom.) v. CIT v. Jaykrishna Harivallabhdas [1998] 231 ITR 108 (Guj.) vi. Eastern Cold Storage (P.) Ltd. [1983] 139 ITR 664/[1981] 7 Taxman 185 (Cal.) vii. Rajputanna Trading Co Ltd v. CIT [1969] 72 ITR 286 (SC) viii. CIT v. Warangal Industries (P.) Ltd. [1977] 110 ITR 756 (AP) ix. CIT v. Surinder Pal Anand [2010] 192 Taxman 264 (Punj. Har.) x. Bhatia Nagar Premises Co-operative Society Ltd. v. Union of India [2011] 334 ITR 145/197 Taxman 249 (Bom.) xi. K.R. Palanisamy v. Union of India [2008] 306 ITR 61/[2009] 180 Taxman 253 (Mad.) xii. Jindal Stainless Ltd . v. Asstt. CIT [2009] 120 ITD 301 (Delhi) xiii. Indore Construction (P.) Ltd. v. Asstt. CIT [1999] 71 ITD 128 (Indore) xiv. Suncity Alloys (P.) Ltd. v. Asstt. CIT [2009] 124 TTJ 674 (Jodh.) xv . LMJ International Ltd . v. Dy. CIT [2008] 22 SOT 315 (Kol.) 12. In reply, the ld. DR supported the order passed by the ld. CIT(A). 13. We have heard both the parties and carefully considered their submissions including the authorities referred to by them. It is not in dispute that the assessee has paid/spent a sum of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al gain. Section 50C contains special provision for determination of full value of consideration in certain cases. According to section 50C, where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government (referred to as the "stamp valuation authority") for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer. Section 50C thus creates a legal fiction by which the value assessed/adopted by the Stamp Valuation Authority for payment of stamp duty is deemed to be the consideration received or accruing on transfer even if such consideration is not actually received by the transferor from the transferee. Section 50C has been enacted for the limited purpose of section 48 to facilitate computation of income from capital gain. 16. As verb transitive, the word "deem" means to treat something as if (i) it is really somethi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent that the legal fiction created by section 50C is limited to the purposes of section 48 alone and does not extend to any other purpose. In other words, its applicability is restricted to the computation of capital gain u/s 48. And therefore the legal fiction created by section 50C cannot be extended to any purpose beyond the purposes of section 48. In the matter under appeal, the assessee is not seeking applicability of the legal fiction created by section 50C for the purpose of section 48; he, in fact, seeks to extend the legal fiction created by section 50C to purposes other than those covered by section 48, which is not permissible on the principle that a legal fiction must be carried to its logical conclusion and not to an illogical length or beyond the purpose for which it is created. Therefore the legal fiction created by section 50C cannot be extended further to mean that the assessee has actually received the consideration or that the consideration deemed to be so received u/s 50C was actually available in cash with the assessee for making investments or meeting expenses. 18. Sections 69, 69A and 69B of the Income-tax Act also create legal fiction by which unexplain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan given by the company to the shareholder was treated as his income by way of dividend by virtue of legal fiction created by section 2(22)(e) of the Income-tax Act would not mean that the said loan given by the company had ceased to be a loan in reality on the principle that deemed dividend does not become real dividend. As a matter of fact, the loan given by the company to the shareholder remains loan notwithstanding the fact that it is fictionally treated as his income by way of dividend. Similar principle governs the case before us. The consideration, which is deemed by section 50C to have been received by the transferor, is for the limited purpose of computation of capital gain u/s 48 and for no other purpose. It cannot and does not mean that the said amount of consideration has been actually received by the assessee or actually paid by the transferee to him so as to be available in his hands for investments or for meeting the expenses. "Deemed consideration" u/s 50C for computation of capital gain u/s 48 is quite different from actual consideration or actual availability of money for the purpose of making investments or for meeting the expenses. Deemed consideration within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived a sum of Rs. 38.00 lakhs from the buyer. For this reason also the claim of the assessee deserves to be rejected and is accordingly rejected. 23. The assessee wants us to hold that the consideration deemed to be received in terms of section of section 50C should be treated as consideration actually received. We are unable to hold so for the reason that it is the assessee himself who has recited in the deed of conveyance to have received only Rs. 8 lakhs. Having so recited in the deed of conveyance, the assessee cannot turn around to say that he has received Rs. 38 lakhs instead of Rs. 8 lakhs as recited in the deed of conveyance and that too without bringing any material on record to prove that he has actually received Rs. 38 lakhs instead of Rs. 8 lakhs. Besides, conveyance deed has been signed by both the buyer as well as seller ( i.e., the assessee) of the property. The assessee cannot succeed in its claim to have received Rs. 38 lakhs unless the said amount is shown to have been paid by the buyer. There is no confirmation from the buyer that he has paid Rs. 38 lakhs to the assessee and not Rs. 8 lakhs as recited in the deed of conveyance. If the buyer had actually pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of appeal before the disposal in the interest of substantial justice. It is therefore prayed that the appeal may kindly be accepted as prayed above or any other relief to which the appellant may be found entitled may kindly be granted." 27. Ground Nos. 1 and 9 are general in nature and therefore does not require any specific adjudication. 28. Issues raised in ground nos. 2, 5 and 6 are identical with the ground taken in AY 2005-06. As in AY 2005-06, they were not pressed this year also. They are therefore dismissed as not pressed. 29. Ground No. 7 was not pressed and is therefore dismissed as not pressed. 30. The issue raised in ground No. 8 has already been considered and adjudicated upon by us in A.Y 2005-06. For similar reasons, ground No. 8 is dismissed. 31. Apropos ground No. 3, the ld. counsel for the assessee submitted that the issue raised in ground No. 3 was identical with the one in AY 2005-06 and therefore the decision taken in this behalf in AY 2005-06 should be followed this year also. We have already considered and adjudicated upon the issue in the assessee's appeal for AY 2005-06. For similar reasons as given in our Order for AY 2005-06, groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchase of property against the facts and circumstances of the case. 4. That the ld. Appellate Authority wrongly and illegally confirmed the addition of Rs. 21,95,364/- on account of investment of land, house, shares ad expenditure etc. against the facts and circumstances of the case. 5. That the ld. Appellate Authority wrongly and illegally confirmed the addition of Rs. 70,000/- on account of undisclosed commission against the facts and circumstances of the case. 6. That the ld. Appellate Authority wrongly and illegally rejected the ground that the additions made assessment proceedings u/s 153A are sine-qua-non the seized material and no additional cold be sustained otherwise. 7. That without prejudice and alternatively additions made requires to be adjusted and telescoped. 8. That the ld. Appellate Authority wrongly and illegally directed to charge interest u/s 234B although on facts and circumstances of the case, interest is not chargeable. 9. That the appellant craves permission to elucidate, add, amend, modify, delete any ground or grounds of appeal before the disposal in the interest of substantial justice. It is therefore, prayed that the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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