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TMI Blog2017 (2) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the order of CIT(A) deleting the addition made by the AO of unrecorded/undisclosed income u/s 69B of the Act being unexplained investment in purchase of house property. For this Revenue has raised following three grounds: - "1. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in deleting the addition of Rs. 1,48,40,000/- as unrecorded investments made u/s 59B, on the basis of DVO's report, after having accepting the finding of the A.O. in principle that the property was acquired in the year 2009 and not in the year 2004 as claimed by the assessee. 2. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in holding that the assessee has not paid any amount un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly, the AO relying on DVO's record taken the real market value at Rs. 2,43,40,000/- as purchase consideration and added unrecorded investment at Rs. 1,48,40,000/-. Aggrieved, assessee preferred the appeal before CIT(A), who deleted the addition by observing in para 4.5,4.6,4.7 & 4.8 as under: - "4.5 I have perused the assessment order, submissions of appellant, remand report, facts and circumstances of the case carefully. The appellant has contended that the impugned commercial premises was acquired from developer at a very discounted rate consequent upon negotiation between them wherein the appellant surrendered an unauthorized shed admeasuring 100 sq. feet approx. on said land, and a reference of the same is also made in the Agreement d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed by the appellant. Finally, the AO in para 16 of remand report, has not ruled out the possibility of restricting the addition made to Rs. 1,08,75,400/- (i.e. Stamp Duty Value minus Agreement Value), as against the addition made of Rs. 1,48,40,000/- (i.e. Value of Investment estimated by DVO minus Agreement Value). 4.6.1 find that the rival arguments revolve around the existence or not of the alleged unauthorized shed. Hence, it would be appropriate to analyze the facts of present case under both such situations one by one: (i). Assuming the alleged unauthorized structure did not exist at all: In such case, the appellant has bought the property for consideration less than the stamp duty value. The differential value cannot be taxed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mains as to the applicability of Sec. 69B. I understand that Sec. 69B covers investments not fully disclosed in books of accounts, and in present situation since the investment in commercial unit to the extent of surrender value of unauthorized structure would be explained, it would not fall within the preview of said section. The appellant has not received any separate sale consideration in respect of surrender of unauthorized construction, and negotiated to reduce the cost of acquisition of commercial property. Whenever the appellant would sell the said commercial property, he would be entitled to claim the reduced cost and indexation benefit thereon while calculating the capital gain. In my opinion, in absence of express provisions of st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestment to the purchaser of the said property, to the District Valuation Officer, Mumbai, who valued the cost of investment at Rs. 2,43,40,000/-. The assessee has also made a claim that assessee booked this office premises in December 2004 and paid earnest deposit of amount Rs. 7,00,000/- to Kamla Landmarc Infra. This position of assessee was rejected by CIT(A) treated this transaction pursuant to agreement dated 13-12-2009, hence falling in F.Y. 2009-10 relevant to A.Y.2010-11. The findings of CIT(A) on this issue is not challenged by assessee in his appeal and hence, the same has become final. 5. Now, the issue is whether the provisions of Section 69 B of the Act as well as Section 56(2) (Vii)(b) r. w. s. 50C of the Act will apply or n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from other sources. This amendment applies in relation to A.Y. 2014-15 and subsequent assessment years and up to 31-03-2013, addition cannot be made in the hands of the buyer as explained by the explanatory note to finance bill, 2013. There is no dispute as regards to the amount and date of registration that the property was registered only on 19-01-2010, which is much before the amendment in Section 56(2) of the Act. Even the provision of Section 50C r. w. s. 69 and 69B of the Act, i.e. the special provision for full value of consideration in certain cases creates a legal friction for taxing capital gains in the hands of seller and it cannot be extended for taxing difference between apparent consideration and valuation done by stamp valua ..... X X X X Extracts X X X X X X X X Extracts X X X X
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