TMI Blog2014 (11) TMI 1119X X X X Extracts X X X X X X X X Extracts X X X X ..... and the cost of acquisition at ₹ 1085/- per sft. We do not know the guideline value of the property on 26.03.2007 when the assessee sold two pieces of land. If it was more than ₹ 1085 per sft, then there could not be any loss and for the sake of arguments, contention of the assessee are to be accepted in this year, then ₹ 1400/- per sft is to be applied on earlier two sale deeds also for the purpose of computation of capital gain. Then again there would not be any loss. Therefore, we do not find any merit in the contentions of the learned Counsel for the assessee, consequently appeal of the assessee is dismissed. Miscellaneous receipts - Held that:- On verification of the facts and circumstances found that this sum on miscellaneous receipts included in the provisional P&L a/c at the time of survey has been included in the total amount offered by the assessee at ₹ 3,15,00,603/-. The learned CIT (A) has reproduced the list of the persons to whom these miscellaneous sundry credit represent. After going through the findings of the CIT (A) in Para No.4.5, we are of the view that the assessee has duly explained the miscellaneous receipts accounted during the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red into an agreement on 31.12.2005 to purchase a property at 9/1A, Arekere Village, Begur Hobli, Bangalore with M/s. Namaste Exports Ltd, for a total consideration of ₹ 4,25,00,000/-. He made a payment of ₹ 15.00 lakhs on 23.12.2005. The total area of the land was 39,162 sq.ft. The assessee has sold this plot in three pieces. On 26.3.2007, he sold two pieces of land measuring 8550 sft and 9000 sft for a consideration of ₹ 64,12,550/- and ₹ 71,25,000/- respectively. The remaining part of the land measuring 21157 sq.ft has been sold on 1.3.2010 for a consideration of ₹ 1,91,00,000/-. In this way, the assessee has claimed a loss of ₹ 98,62,500/-. According to the Assessing Officer, an inquiry was conducted with the jurisdictional subregistrar. It was found that the State Govt. with the purpose of charging stamp duty on registration of the sale deed, has notified the circle rate which are to be adopted for charging stamp duty. The guidance value of this property for this purpose for the period 24.2.2007 to 25.9.11 command a price of ₹ 1400 per sft, whereas, as per the sale value consideration shown by the assessee, the rate worked out to ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... real estate. He is a developer, therefore, he had been purchasing the land for the purpose of the business. In this transaction, the investment was made in trading field. The advances paid by the assessee were shown as a current asset in the account. For this purpose, he drew our attention towards page No.192 of the Paper Book, wherein schedule forming part of balance sheet as on 31.3.2008 has been placed on record. He also drew our attention towards page No.140 wherein sub-schedule exhibiting the advance paid for land purchases has been placed on record. This schedule is forming part of balance sheet as on 31.03.2006. On the strength of these two documents, it was contended that the assessee has been in the business of developing real estate as a builder, hence he was making investment in the trading field. On page 140 is the list of more than 25 properties which were treated as a stock. Therefore, the advances made with regard to this plot could also be considered as an advance for the stock. The learned DR on the other hand drew our attention towards page Nos. 192, 193 and 222. He poined out that as on 31.3.2008, this alleged advance has been shifted towards investment. The mom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 79 (Bom.) v) Karamchand Thapar Brothers vs. CIT 82 ITR 899 In the case of Madan Lal Ahuja (Supra), the assessee had purchased land measuring 28,278 yards which he developed as a colony and sold in small pieces. The facts leading to that case suggest that land was purchased during 1942 to 1947. The entire land was combined in one unit and developed as such under one shcme. The expenses incurred on the development and lay out of the plot was for the whole unit and not on part of it. In that background, the Hon'ble High Court has upheld that profit or loss earned by the developer could not be correctly determined, unless transaction of sale of entire land was complete. On the strength of this decision, the assessee raised two contentions; firstly that profit and loss even while computing the capital gain/loss is to be computed by taking into consideration the earlier two sale instances i.e. 26.03.2007 vide 8550 and 9500 s.ft areas were sold by the assessee. The second fold is that, it suggest that the assessee had sold the plots in ordinary course of business. In our opinion the facts are quite distinguishable in the case of Madan Lal Ahuja (Supra), wherein it was consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement to purchase which cannot be equated with land or building possessed by the assessee. Therefore, section 50C is not applicable in the present case. In order to buttress his contention, he relied upon the judgment of Bombay Bench of the ITAT in the case of Atul G. Puranik vs. Income Tax Officer (2011) 11 ITR (T) 120 (Mum) and ITAT Kolkata Bench in the case of DCIT v. Rajendra Singh 147 TTJ 87. The agreement of sale dated 23.12.2005 is available on page 78 of the paper book. Vide this agreement M/s Namaste Exports Ltd agreed to sell the land in dispute to the assessee for a consideration of ₹ 4,25,00,000/-. The time limit to get the sale deed executed and made the payment has been mentioned in clause 2 and this time limit was for nine months. The assessee has paid ₹ 15.00 lakhs at the time of execution of agreement. As per his account, he paid ₹ 2,25,00,000/- as on 31.3.2007. In the schedule of investment for the year ending on 31.3.2008, the assessee has shown payment of ₹ 3,20,00,000/-. The assessee has not placed on record any other correspondences between the vendors i.e Namaste Exports Ltd vis- -vis himself, indicating how the limit for payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee of a capital asset, being land or building or both is less than the value adopted or assessed by any authority of a State Govt. for the purpose of the payment of stamp duty in respect of such transfer, the value so adopted or assessed shall for the purpose of section 48 be deemed to be the full value of the consideration received or accruing, as a result of such transfer. The capital gain is to be computed as per section 48 of the Income Tax Act which provide that income chargeable under the head Capital Gains shall be computed by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset, the following amount namely; a) expenditure incurred wholly and exclusively in connection with such transfer and (b) the cost of acquisition of the asset and the cost of any improvement thereof. For our purpose, the expression used full value of the consideration is relevant. This full value of the consideration is to be replaced by deemed value which is adopted for the purpose of stamp duty evaluation. In the present case, the assessee has shown the full value of the consideration @ ₹ 902/- per sft, whereas for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suggest that there is no loss. The loss has been computed by taking the sale consideration at ₹ 902/- per sft and the cost of acquisition at ₹ 1085/- per sft. We do not know the guideline value of the property on 26.03.2007 when the assessee sold two pieces of land. If it was more than ₹ 1085 per sft, then there could not be any loss and for the sake of arguments, contention of the assessee are to be accepted in this year, then ₹ 1400/- per sft is to be applied on earlier two sale deeds also for the purpose of computation of capital gain. Then again there would not be any loss. Therefore, we do not find any merit in the contentions of the learned Counsel for the assessee, consequently appeal of the assessee is dismissed. ITA No.215/Bang/2014 11. In this appeal, the grievance of the Revenue is that the learned CIT (A) has deleted the addition of ₹ 33,17,427/-. During the course of survey, a provisional profit and loss account was prepared. The assessee had shown miscellaneous receipts at ₹ 34,62,981/- in the provisional P L a/c during the survey operation, whereas the same had been shown at ₹ 1,22,779/- in the P L a/c filed with the retur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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