TMI Blog2023 (11) TMI 928X X X X Extracts X X X X X X X X Extracts X X X X ..... e consideration and the value shown in the sale deed has to be accepted. The circle rates as stipulated u/s 50C of the Act cannot be sole concluding reason to hold that there is an understatement of sale consideration and adopt the valuation done for the purpose of stamp duty. In view of above discussions revenue has failed to discharge its burden of proof that higher amount of sale consideration had passed on to the seller from the buyer in addition to the amount of sale consideration recorded in the deed. On the other hand, it is also found that assessee also did not come forward with relevant documents which can help in establishing the fact that no cash payment element is involved to take the advantage of position as provided in section 43CA (3) r.w.s. 43CA (4) of the Act. In view of this, we store the matter back to the file of Jurisdictional AO for verification of balance transactions of Table-2 at Page No.6, i.e., at serial no. 1, 2, 3, 5, and 6. Ground Nos. 1, 2, 3, 4 and 5 are partly allowed for statistical purposes. Taxability of deemed rent u/s. 22 r.w.s. 23 of the Act. AO by deputing an Income Tax Inspector determined ALV as prescribed in section 23 of the Act fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (A) erred in confirming AO's action in rejecting the valuation of property as adopted by the appellant and in not referring the matter to the valuation officer u/s. 50C, before making the addition under section 43CA. 5. That on the facts and circumstances of the case and in law, Ld. CIT(A) erred in upholding the order of the Ld. A.O., wherein the additions were made without any corroborative evidence. 6. That on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming AO's action in making addition of Rs. 24,52,359/- under section 22 r.w.s 23 of the Income Tax Act, 1961 and in adding the same to the total income of appellant. 2. The Brief facts of the case are that assessee is a partner-ship firm, engaged in the business of construction and real estate development. Assessee filed its return of income u/s. 139 of the Act on 31.10.2015 declaring total income at Rs. 7,38,06,330/-. Case of the assessee was selected for scrutiny and relevant notices u/s. 142(1) and 143(2) of the Act were issued and served. Case of the assessee was assessed u/s. 143(3) of the Act and additions u/s. 43CA and sections 22 r.w.s. 23 was made amounti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer is by way of first-time allotment of the residential unit to any person; and (iii) the consideration received or accruing as a result of such transfer does not exceed two crore rupees.] (2) The provisions of sub-section (2) and sub-section (3) of section 50C shall, so far as may be, apply in relation to determination of the value adopted or assessed or assessable under sub-section (1). (3) Where the date of agreement fixing the value of consideration for transfer of the asset and the date of registration of such transfer of asset are not the same, the value referred to in sub-section (1) may be taken as the value assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer on the date of the agreement. (4) The provisions of sub-section (3) shall apply only in a case where the amount of consideration or a part thereof has been received [by way of an account payee cheque or an account payee bank draft or by use of electronic clearing system through a bank account] [or through such other electronic mode as may be prescribed] on or before the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 4, Table-2, Project Name Gaurav Excellency , No addition of Rs. 2,90,452/- can be made. Our view is being fortified by following judicial pronouncements of coordinate benches/Hon ble High Courts:- [2022] 144 taxmann.com 168 (Pune - Trib.) Sai Bhargavanath Infra v. ACIT [2021] 123 taxmann.com 252 (Mumbai - Trib.) Maria Fernandes Cheryl v. Income Tax Officer, (International Taxation) 8. As far as balance transactions of Table-2 at Page No.6 of the assessment order at serial no. 1, 2, 3, 5, and 6 are concerned we rely upon the ruling of Hon ble Punjab and Haryana High Court in the case of CIT vs. Chandani Bhuchar [2010] 323 ITR 510/191 Taxman 142 (Punjab Haryana) for the preposition that The valuation done by any State Agency for the purpose of stamp duty would not ipso facto substitute the actual sale consideration as being passed on to the seller by the purchaser in the absence of any admissible evidence. The Assessing Officer is obliged to bring on record positive evidence supporting the price assessed by the State Government for the purpose of stamp duty. From a plain reading of the provision, it emerges that the value adopted or assessed by any authority of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 23 of the Act for the purposes of section 22 of the Act. As per I.T.I report as mentioned at page no. 10, para no. 7 of the assessment order, value of unsold flats worked out to be Rs. 24,52,359/- and added to the income of the assessee. On this matter assessee relied upon following judicial pronouncements: Kumar Beharay Rathi vs ITO (2019) (4) TMI 389- ITAT Pune Pegasus Properties P. Ltd. 135 Taxmann.com 294 Runwal Constructions Runwal Omkar Esquare 2018 (2) TMI- ITAT Mumbai Sarovar Developers P. Ltd. 2019 (10) TMI 278-ITAT Ahmadabad 12. During the appellate proceedings, vide submission dated 09/09/2022, the appellant has submitted that sub-section 5 to sec. 23 has been inserted vide Finance Act, 2017. As per this sub-section, any property which has been held as stock in trade and has not been let-out during the year, then the Annual Value of such property shall be taken as Nil up to a period of one year from the end of the financial year in which the certificate of completion of construction is obtained. The appellant has submitted that the said amendment is applicable w.e.f. A.Y. 2018-19 and therefore the income can be charged only from A.Y. 2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the impost is to be effectuated. The existence of an artificial method itself would not mean that levy is impermissible. Parliament has resorted to several other presumptive methods, for the purpose of calculation of income and collection of tax. Furthermore, application of ALV to determine the tax is regardless of whether actual income is received; it is premised on what constitutes a reasonable letting value, if the property were to be leased out in the marketplace. [Para 13] Assessee is not occupier As far as the alternative argument that the assessee itself is occupier, because it holds the property till it is sold, is concerned, there is no merit in this submission. While there can be no quarrel with the proposition that 'occupation' can be synonymous with physical possession, in law, when Parliament intended a property occupied by one who is carrying on business, to be exempted from the levy of income tax was that such property should be used for the purpose of business. The intention of the lawmakers, in other words, was that occupation of one's own property, in the course of business, and for the purpose of business, i.e., an active use of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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