TMI Blog2021 (12) TMI 1074X X X X Extracts X X X X X X X X Extracts X X X X ..... ch financial year in which the assessee is found to be the owner of the unexplained money, bullion, jewellery etc. Admittedly, section 69A is not applicable to the first two periods which do not fall in the previous year relevant to the assessment year under consideration. We, therefore, hold that the ld. CIT(A) was justified in deleting the addition. Addition u/s.43CA - Reference to stamp value OR amount realized in respect of some other flats sold by the assessee during the period - HELD THAT:- Section 43CA has been inserted by the Finance Act, 2013 w.e.f. 01-04-2014. The assessment year under consideration is 2014-15 and the same is, therefore, applicable. Section 251 of the Act does not empower the CIT(A) to restore any matter to the AO for reconsideration inasmuch as he can only confirm, reduce, enhance or annul the assessment in an appeal filed against the order of assessment. From that angle, the decision of the CIT(A) cannot be countenanced, Howbeit , it is seen that the provision of section 43CA r.w.s.50C govern the situation under consideration. Though technically, we set-aside the view of the ld. CIT(A) in restoring the matter to the file of AO, we direct the AO to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land appurtenant thereto, held as stock in trade, is unsold at the end of the year, the annual letting value is required to be determined in terms of section 23(5) after a period of one year from the end of the relevant financial year in which the construction is completed. This amendment came into effect from 01-04-2018. The assessment year under consideration is 2014-15 and hence, the insertion will not apply to the instant case. The question as to whether notional rent on the unsold flats lying as stock in trade can be charged to tax as Income from the property came up for consideration before the Pune Tribunal in Kumar Properties and Real Estate (P) Ltd. Vs. DCIT [ 2021 (4) TMI 1163 - ITAT PUNE] . After considering the decisions - both for and against -, the Tribunal decided the issue in favour of the assessee. Respectfully following the aforesaid precedent in Kumar Properties (supra) , we set-aside the impugned order and order to delete the addition sustained in the first appeal. - ITA No.248/PUN/2018 C.O. No.05/PUN/2021 (Arising out of ITA No.248/PUN/2018) - - - Dated:- 22-12-2021 - Shri R.S. Syal, Vice President And Shri S.S.Viswanethra Ravi, Judicial Member For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2011 did not fall in the year under consideration and hence, no addition could be made u/s.69A of the Act. This led to the deletion of addition of ₹ 3,82,07,505/-, against which the Revenue has come up in appeal. 4. We have heard the rival submissions and gone through the relevant material on record. Section 69A of the Act provides that where in any financial year an assessee is found to be the owner of any money, bullion, jewellery etc., which is not recorded in the books of account and the assessee offers no explanation about the nature and source of its acquisition or the explanation offered is not found by the AO to be satisfactory, the money and the value of such bullion, jewellery etc., may be deemed to be the income of the assessee for such financial year. As can be seen, the AO simply took peak sale rate for the two periods under consideration and applied the same to the other properties sold by the assessee during such periods for making the addition. There is no material on record to substantiate that the assessee, in fact, received some thing over and above the declared consideration. Per contra , the assessee tendered host of reasons justifying difference in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t year under consideration is 2014-15 and the same is, therefore, applicable. Section 251 of the Act does not empower the CIT(A) to restore any matter to the AO for reconsideration inasmuch as he can only confirm, reduce, enhance or annul the assessment in an appeal filed against the order of assessment. From that angle, the decision of the ld. CIT(A) cannot be countenanced, Howbeit , it is seen that the provision of section 43CA r.w.s.50C govern the situation under consideration. Though technically, we set-aside the view of the ld. CIT(A) in restoring the matter to the file of AO, we direct the AO to compute the amount of addition u/s.43CA with reference to stamp value and not the amount realized in respect of some other flats sold by the assessee during the period. In case the assessee disputes, a valid reference u/s.50C(2), may be ordered by the AO. This ground is disposed off accordingly. 9. Ground No.3 of the Revenue s appeal is against the deletion of addition of ₹ 51,68,089/- made by the AO u/s.36(1)(iii) of the Act. 10. The facts of this ground are that the assessee took a loan of ₹ 7.68 crore on which interest was paid. Simultaneously, certain interest b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee that no fresh loans were advanced during the year does not stand. 12. Now, we come to the other reason given by the ld. CIT(A), as bolstered by the ld. AR, that the assessee s Shareholder fund was more than the amount of interest free advances and hence no disallowance of interest could be made. The Hon'ble Bombay High Court in CIT vs. Reliance Utilities and Power Ltd. (2009) 313 ITR 340 (Bom) , has held that where an assessee possessed sufficient interest free funds of its own which were generated in the course of relevant financial year, apart from substantial shareholders funds, presumption gets established that the investments in sister concerns were made by the assessee out of interest free funds and, therefore, no part of interest on borrowings can be disallowed on the basis that the investments were made out of interest bearing funds. In reaching this conclusion, the Hon ble High Court relied on the judgment of the Hon ble Supreme Court in the case of East India Pharmaceutical Works Ltd. Vs. CIT (1997) 224 ITR 627 (SC). Applying this ratio to the facts of the case, it can be seen from the assessee s balance sheet that the share capital is only ₹ 1.15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r concerns. The assessee is not the one to have received loans. Section 2(22)(e) applies only when a loan is received which is treated as deemed dividend. As the assessee did not receive any amount from its related companies, the provisions of section 2(22)(e) cannot be applied. We, therefore, uphold the impugned order on this legal issue. 15. The assessee in its Cross objection has raised only one issue about the confirmation of addition of ₹ 18,36,968/- as annual letting value of unsold commercial units of the real estate project Siddha Icon. The facts apropos this ground are that the AO noticed certain unsold units valued at more than ₹ 7.00 crore in the closing stock of the assessee. On being called upon to explain as to why no deemed rent/notional rental income was shown in respect of these vacant flats, the assessee tendered an explanation, which did not find favour with the AO. Applying ₹ 40/- per sq.ft. as fair rent for one month, the AO computed deemed rent of unsold units in stock at the end of the year at ₹ 26.24 lakh. After allowing standard deduction at 30%, he computed the net annual value chargeable to tax at ₹ 18,36,968/-. The ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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