9911796707
TMI Blog2016 (3) TMI 1063X X X X Extracts X X X X X X X X Extracts X X X X ..... at Section 50C is not applicable on the land or building or both, forming part of the stock in trade, and as such the addition of Rs. 43,75,000/- is bad in law and may please be deleted. 2. That the Ld CIT (A) has erred in law while confirming the addition made by the Ld AO of share application money received to the extent Rs. 93,50,000/-, without taking into consideration the facts and evidences brought on record, and therefore the addition so confirmed by the Ld CIT (A) of Rs. 93,50,000/- is bad in law and may please be deleted. 3. That the Ld. CIT(A) has erred in law while sustaining the disallowance of Rs. 2,23,692/- made by the Ld AO, being excessive interest paid on unsecured loans to related parties above the presumptive rate o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertain parties at 12%. The ld. AO also observed that the assessee has debited an amount of Rs. 2,61,103/- on account of travelling expenses. Various details were called for in respect of the above issues and the assessment was completed by the AO by making the following additions:- (i) Excess consideration of properties (land) u/s 50C(1) of the IT Act. Rs.43,75,000/- (ii) Unverified Share Application Money/Share Premium. Rs.93,50,000/- (iii) Excess Interest paid Rs.2,23,692/- (iv) Disallowance of 40% of Travelling Expenses Rs.1,04,441/- 3. Aggrieved by the order of the ld.AO, the assessee preferred an appeal before ld.CIT(A). The ld.CIT(A) confirmed all the additions, except the disallowance of travelling expenses, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... went up in this year in which the documents were registered. 6. The ld. AR further submitted that these plots were held by the assessee as stock-in-trade of the business. The ld. AR further submitted that section 50C(1) is applicable on capita asset not held as stock-in-trade. For the sake of convenience, the provision of section 50C(1) of the Act is reproduced hereunder:- "Section 50C(1) - 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 (hereafter in this section referred to as the 'stamp valuation authority') for the purpose of payment of stamp duty i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties before the ld. AO. 8. It appears from the order of the ld.CIT(A) that the AO had issued summons u/s 133(6) of the Income-tax Act to confirm the genuineness of the share application money received by the assessee. In response to the same, the ld. AO had received the necessary details from six parties. In respect of Shri Charanjeet Kaur, Shri Manjeet Singh Sandhu and Smt. Suneet Sandhu the ld. AO did not receive any response. However, it was informed by the father of Shri Manjeet Singh Sandhu that all the three persons have left India and have not come back till date. He also filed details like bank statements, which shown the credit worthiness of all the three parties and genuineness of the payments made by them to the assessee. 9. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st for the purposes of business. The ld. AR submitted that it is the circumstance which required the assessee to obtain the loan at a higher rate of interest. The ld. AR has relied upon the decision of CIT vs. Rockman Cycle Industries Pvt. Ltd., reported in (2011) 15 Taxmann.com 306 (P&H) (FB). 14. On the contrary, the ld. DR supported the findings of the authorities below. 15. We find force in the submissions made by the ld. AR. It is not the case of the Revenue that the assessee has not paid the interest at the said rate to the lender. It is also not the case that the borrowed funds have not been utilized by the assessee for the purposes of business. If a wrong or unwise decision has been taken by the assessee, it cannot be said that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
