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Issues involved: Determination of sale value of residential flats for assessment year 2007-08 u/s 50C of the Income Tax Act, 1961.
Summary: The appeal was filed by the assessee against the order of the Commissioner (Appeals) regarding the sale of residential flats in Mumbai. The Assessing Officer questioned the declared sale value of the flats compared to the valuation by stamp authorities, resulting in an addition to the income. The first appellate authority upheld the decision based on previous orders. The Tribunal referred to a similar case from the previous year where the issue was analyzed. It was noted that the Assessing Officer did not provide evidence to support the discrepancy in sale values and did not find any defects in the accounts. The Tribunal concluded that the provisions of section 50C were not applicable in this case as the income was computed under the head "Profits & Gains under business or Profession." Therefore, the grounds raised by the assessee were allowed, and the appeal was granted. In conclusion, the Tribunal ruled in favor of the assessee, emphasizing the lack of evidence supporting the addition to the business income based on the variance between the sale price and the valuation by stamp authorities. The decision highlighted that the Assessing Officer failed to demonstrate any defects in the accounts or the need for invoking section 50C in cases where income is computed under specific heads. The Tribunal's verdict allowed the appeal, overturning the previous orders and dismissing the addition to the income for the assessment year in question.
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