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2016 (3) TMI 1063 - ITAT DELHI

2016 (3) TMI 1063 - ITAT DELHI - TMI - Addition u/s 50C - assessee submitted that the plots were held by the assessee as stock-in-trade of the business - Held that:- We have perused the provisions of section 50C(1). It is very clear from the section itself that the provisions of section 50C(1) is attracted only in a case of a capital asset and not in the case where the asset is held as stock-in-trade. From the facts in the present case, and the paper book filed, it is very clear that all the pro .....

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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 decision is dubious or the assessee in such transaction has adopted method to evade the payment of tax. It is also not the case of the Revenue that the assessee has paid any dividend from such borrowed funds. In the instant case, there is no such evidence that has been brought on reco .....

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ses is not in dispute.- Decided in favour of assessee - ITA No.518/Del/2013 - Dated:- 19-2-2016 - SHRI N.K. SAINI, AM & SMT. BEENA A. PILLAI, JM For The Assessee : Shri Sanjay Agarwal, CA For The Department : Shri V.R. Sonbhadra,Sr. DR ORDER PER BEENA A. PILLAI, JM: The present appeal arises from the order passed by the CIT(A)- XVII, New Delhi on 14.12.2012 in relation to the assessment year 2007-08, on the following grounds of appeal:- 1. That the Ld. CIT (A) has erred in law while confirmi .....

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hout taking into consideration the facts and evidences brought on record, and therefore the addition so confirmed by the Ld CIT (A) of ₹ 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 ₹ 2,23,692/- made by the Ld AO, being excessive interest paid on unsecured loans to related parties above the presumptive rate of 12%, without considering the business exigency involved and as such the addition of ₹ .....

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delete, modify or withdraw any of the above grounds at the time of hearing. 2. The facts in brief are that the assessee filed its return of income for the relevant year on 29.10.2007 declaring nil income. The return was processed u/s 143 (1) of the Act and later on was selected for scrutiny. The ld. AO, during the course of assessment proceedings, observed that the assessee is in the business of construction during the year under consideration. The assessee had shown sale of ₹ 82,95,000/-, .....

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an amount of ₹ 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 t .....

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the ld.CIT(A) and the submissions made by the assessee have been reproduced by the ld.CIT(A) in his order from pages 3 to 8. It has been submitted that the buyers have paid stamp duty on the amounts exceeding the sale consideration received by the assessee. The ld. AR submitted that the buyers had booked the plot with the assessee in the earlier years. As per the policy of the company, the property had to be sold at the agreed rate and the amount had to be same as per the booking price. The ld. .....

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ate was lower and the property was registered with the Registrar of Stamps when the circle rate went high. The difference was likely to arise as the prices 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 th .....

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of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer. 4.1 On the contrary, the ld. DR supported the order of the authorities below. 4.2 We have perused the provisions of section 50C(1). It is very clear from the section itself that the provisions of section 50C(1) is attracted only in a case of a capital asset and not in the case where the asset is held as stock-in-trade. From the facts in the present case, and the paper book filed, .....

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₹ 1,70,50,000/- from nine parties. The assessee during the assessment proceedings had filed details of share application money and statement of share capital before the AO. The ld. AR also submitted that the assessee had submitted PANs with addresses thereon, copy of the income-tax return, bank statements and affidavits, confirming the receipt of the share application money from all the parties before the ld. AO. 8. It appears from the order of the ld.CIT(A) that the AO had issued summons .....

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ike bank statements, which shown the credit worthiness of all the three parties and genuineness of the payments made by them to the assessee. 9. At this juncture, the ld. AR submits that this issue can be sent back to the ld. AO for verification from the bank in respect of the monies held by the parties. 10. The ld. DR does not object the submissions made by the ld. AR. We accordingly set aside this issue to the file of the ld. AO for verification of the details to be filed by the assessee. 11. .....

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/s 133(6) of the Act with the details of the parties to whom the interest has been paid at 15%. The ld. AR submitted that the rate of interest paid to the parties by the assessee is apparently at a higher rate, particularly, because the unsecured loans have been obtained under commercial expediency. The ld. AO held the interest paid by the assessee to these parties to be excessive and has restricted the interest at 12% and has, accordingly, made the disallowance. 13. The ld. AR submitted that th .....

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