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2019 (3) TMI 1297 - AT - Income TaxSale of immovable property held in stock - Difference between market value and actual sale price treated by AO as unexplained income - applicability of section 50C on stock in trade - insertion of Section 43CA by the Finance Act 2013 - HELD THAT:- There is no evidence on record to prove that the assessee has received any extra amount over and above the sale consideration mentioned in the sale deeds. The Assessing Officer has neither pointed out any defects in the books of account nor rejected the same. Since the property sold are not capital asset and are stock in trade, therefore, the provisions of section 50C are not applicable. Further provisions of section 43CA were inserted by the Finance Act 2013 w.e.f. 01.04.2014 and therefore, these provisions are also not applicable to the assessee since the assessment year involved is assessment year 2012-13. The two sale instances given by the AO are also distinguishable since in one case the property sold was of a three storeyed shop including land and roof rights and the other property is a partly constructed land with all rights whereas the property sold in question is first floor flat without roof rights. The various decisions relied on by the assessee also supports his case. In this view of the matter of the considered opinion that the sale consideration at ₹ 58,19,000/- adopted by the CIT(A) being stamp duty value as against actual sale consideration of ₹ 30 lacs shown by the assessee is not sustainable - assessee ground allowed. Commission paid to two related parties - applicability of section 40A(2)(b) - HELD THAT:- Despite summons issued u/s 131 they never appeared before the AO to substantiate the nature of service rendered by them for getting commission. Merely because tax has been deducted and payment has been made by account payee cheque will not absolve the assessee from the onus cast on it. It is the settled proposition of law that for any expenditure claimed to be an allowable deduction, the onus is always on the assessee to substantiate with evidence to the satisfaction of the AO regarding the incurring of such expenditure wholly and exclusively for the purpose of business. However, in the instant case the assessee could not prove the same since the two persons were never produced before the AO. As mentioned earlier apart from paying the amount through banking channel and deduction of tax from the same is not sufficient - restore this issue back to the file of the AO with a direction to give one more opportunity to the assessee to substantiate its case by producing the two persons for his verification - second ground raised by the assessee is allowed for statistical purpose.
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