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2017 (8) TMI 1236 - AT - Income TaxInitiation of proceedings under section 153C - property sold at a lesser price - satisfaction as required in law was recorded by the assessing officer being the person searched under section 153A - proof of assessee has received anything other than what has been disclosed - Held that:- It is an admitted fact that while the assessee and Radico Khaitan Ltd. belong to the same group, however, the company M/s Mackson Creations Pvt.Ltd. does not belong to the same group and is an outsider company. No evidence whatsoever was found during the course of search to show that the assessee has in fact received something extra than what has been shown to have been received on account of sale of the property. The assessee also has given justifiable reasons as to why the agreement with Radico Khaitan was not acted upon on the ground that the employees of Radico Khaitan Limited resisted to go to the new place because of inconvenience in transport. Further the A.O. had verified u/s 131 (1) and 133(6) of the Act in case of M/s Mackson Creations P.Ltd. and others according to which they have purchased the property “Corenthem” from M/s Shivraj Properties Pvt.Ltd. in the Financial Year 2009- 10 at ₹ 8.15 crores. The DVO vide his report has also ascertained the value of the property at ₹ 8,31,07,000/- as on 30th October,2009. Under these circumstances and in absence of any incriminating material found during the course of search to establish that the assessee has received anything other than what has been disclosed, we do not find any merit in the order of the Ld. CIT(A) in enhancing the income of the assessee by ₹ 6,66,93,021/-. Accordingly, the same is directed to be deleted. Applicability of Section 50C - capital gain - value determination of property sold - reference to DVO - property as a capital asset - computation of total income - Held that:- Value determined by the AO is concerned it is an admitted fact that as against the sale consideration of ₹ 8.15 crores the DVO had determined the value of the property at ₹ 8,31,07,000/-. Although the assessee had agreed to sell the property to M/s Mackson Creations Pvt.Ltd. at ₹ 8.5 crores, however, the property was finally sold at ₹ 8.15 crores. No reason whatsoever has been given as to why the property was sold at a lesser price. There is also no reason given by the assessee so as to justify that the value adopted by the DVO is erroneous. Under these circumstances we hold that the provisions of S.50C will be applicable and the value adopted by the A.O. at ₹ 8,31,07,000/- as against ₹ 8.15 crores adopted by the assessee as sale consideration is justified. So far as the argument of the assessee that the property is its stock in trade and therefore provisions of S.50C are not applicable is concerned, we find that the assessee in its computation of total income has declared the income from “Corenthum” as income from house property. Therefore, although the said property has been shown in the balance sheet as stock in trade, but the conduct of the assessee while computing the taxable income shows that the property is a capital asset since rental income is offered to tax from such property as “income from house property”. Therefore the arguments of the assessee that provisions of S.50C are not applicable to the facts of the case is incorrect. In this view of the matter the addition sustained by Ld. CIT(A) is restricted to ₹ 16,07,000/- as determined by the A.O. and the income enhanced by Ld. CIT(A) is deleted. The grounds raised by the assessee are accordingly partly allowed.
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