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2011 (8) TMI 469 - AT - Income TaxAddition u/s. 69B - Sham transaction - Held that:- there is nothing on record to indicate that assessee has invested more than what was recorded in the books of account. - There is no basis for considering that assessee has made any unexplained investment so as to invoke provisions of section 69B. A.O. cannot presume the difference between the purchase price on the basis of the entries in the books of account as unaccounted investments in this case. As rightly pointed out by the CIT(A) even a reference to valuation does not bring into existence the scope for making the addition as provisions of section 50C were also on statute and there is no difference between the value as registered and the value as made by the assessee in the books of account. - Decided in favor of assessee. Regarding addition u/s 45(3) - value of consideration - held that:- under section 45(3) once the full value of consideration is taken as the amount recorded in the books of the joint venture, the capital gain can be worked out by reducing the cost of purchase as per the books of assessee. In case the A.O. substitutes the cost of purchase, by whatever means, then that cost price has to be adjusted in the capital gains. This may result in a loss of equal amount as the books of joint venture show the book value as consideration and substituted cost price (value determined by AO in the order) as a deduction. This working would result in a loss but not a gain. This simple arithmetic calculation was missed by the A.O. and he made the addition under section 45(3) which does not permit him to substitute the full value of consideration other than the amount recorded in the books of account of the joint venture. As the Assessing Officer's action is not according to the provisions of Sec 45(3), there is no justification for upholding the contentions of Revenue. - Decided in favor of assessee.
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