TMI Blog2009 (8) TMI 1181X X X X Extracts X X X X X X X X Extracts X X X X ..... had valued the flat at ₹ 42,33,840 and had raised a demand of additional stamp duty of ₹ 1,95,600. The Assessing Officer therefore issued a showcause notice asking the assessee to explain as to why the differential sum of ₹ 11,71,340 should not be treated as unexplained investment. 4. The assessee submitted that the flat was 15 years old and it was a distress sale, as a result of which it was purchased at a lower price. The assessee had paid the additional Stamp Duty to avoid further litigation, and for peace of mind. The Assessing Officer rejected the assessee s explanation. He observed that the assessee had accepted the valuation of the SVA and had paid the additional Stamp Duty. Such valuation had not been challenged before any authority. That it was a distress sale as the seller was in urgent need of funds, was of no relevance. Referring to the provisions of section 50C of the IT Act, the Assessing Officer observed that when the difference between the document price and the sale consideration as determined by the SVA is sought to be taxed in the hands of the seller the same yard stick would apply equally to the buyer and the same difference is to be treated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of ₹ 42,33,840 was accepted by her. Even though Sec 50C may be a deeming provision for the purpose of computing capital gains yet, it lays down a very important principle which is that, any transaction within a particular area will have to match the jantri price fixed for that area and the sale consideration would be the rate at which the property is expected to be sold in a given area. Thus, the jantri price is not simply a blanket guideline. It takes into account and consideration all relevant factors of/in a given area, and is fixed by the concerned authorities under the State Government. The point to note is that, once it is deemed and hence accepted that the property has been sold for a particular price, which is the fair market value in/of a given area, it would also have to be deemed and accepted that the purchaser has paid the same amount. Deeming provisions do not exist simply in thin air, nor is it just an abstract concept. Deeming provisions have to be anchored to certain ground realities and causal relationships of day-to-day interactions and dealings. Therefore, when it is said that a property is sold for a particular sum, it follows as a natural corollary tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty or the actual consideration which has been paid for the property whichever is higher. Thus, in the instant case the stamp duty was paid on the higher deemed market value of ₹ 42,33,840/-. The above by itself does not conclusively evidences that the assessee actually paid any consideration more than ₹ 30,62,500/- stated in the registered deed. Further, no material could be brought on record by the revenue before us to show that the assessee actually paid the market value of ₹ 42,33,840/- for the purchase of the flat in question or even invested a single rupee more than the consideration stated in the registered deed of ₹ 30,62,500/-. It is an established position of law that the onus lies on the department to bring material on record to show that the assessee has actually paid any amount more than the amount shown as apparent consideration in the registered deed. Hence, in absence of any such onus being discharged by the department, the department is not empowered to treat any other amount as actual consideration paid by the assessee for acquiring the property and to make addition on that basis. Our above view finds support from the decision of the Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the violation of the guidelines of SEBI. The assessee failed to furnish evidence of physical delivery of shares. Since the date of physical delivery could not be ascertained, the assessee s claim of LONG TERM CAPITAL GAIN could not be accepted, since it was not possible to determine the period of holding of the shares in the hands of the assessee. 15. The Assessing Officer further noted that the broker s note had no mention of the order number and the transaction code number of the Calcutta Stock Exchange (CSE), where the broker was allegedly registered. There was thus no evidence that the shares were transacted through the CSE and consequently, it was only a paper transaction. Most importantly, within a short period of 16 months, the price of the scrip had increased 2500%. 16. On the basis of such findings, the Assessing Officer came to the conclusion that the claim of LONG TERM CAPITAL GAIN was absolutely bogus, and therefore, he treated the sum of ₹ 19,20,000 as unexplained cash credit u/s 68 of the IT Act, and added the same to the Assessee s total income. 17. In appeal before the Learned Commissioner of Income Tax(Appeals) the assessee submitted that broker s no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uote as under: 6. On a comparison of the reasons recorded by the Assessing Officer in the assessment order for treating the LONG TERM CAPITAL GAIN as unexplained cash credit on one hand, and the written submissions of the Learned Authorised Representative of the Assessee has been able to fully rebut each and every ground taken by the Assessing Officer. On his part, the Assessing Officer did not dispute the authenticity of the broker s note issued by N.M. Lohia Co. He also did not contest the purchase price or even the sale consideration. The broker s note clearly established the date of purchase and sale of the shares and hence, the holding period. The Learned Authorised Representative of the Assessee has made a reference to CBDT s Circular No 704 dated 28-04-1995 which clearly states that the dates of purchase as also the date of transfer of the shares. The broker s note also establishes the fact of physical delivery of shares. Further, the observation of the Assessing Officer that the transaction did not take place through the Stock Exchange was also without any basis. Before taking view, he ought to have made a reference to the Exchange to verify the correct position as h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Commissioner of Income Tax(Appeals), the contract note given by the share broker itself evidences that the shares were actually delivered to the assessee. In view of this the Learned Commissioner of Income Tax(Appeals) deleted the addition in its entirety. We find that copy of contract note has been filed before us. The said contract note does not mention the distinctive number of shares. From the order of the Learned Commissioner of Income Tax(Appeals), it is not clear how the Learned Commissioner of Income Tax(Appeals) arrived at the conclusion that the contract note itself evidences that the shares were actually, physically delivered to the assessee. On a query from the bench as to whether the shares purchased were got transferred by the assessee in his name or not, the Learned Authorised Representative of the Assessee replied that the shares were got transferred by the assessee in his name but as the relevant evidences like copy of transfer deed, letters written to the company, letters received from the company after transfer of the shares in the name of the assessee, copy of share certificate etc. were not kept by the assessee and therefore the same cannot be submitted. W ..... X X X X Extracts X X X X X X X X Extracts X X X X
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