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TMI Blog2025 (2) TMI 973X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee has hold 50 units / flats held as stock-in-trade, out of which 12 flats were sold for a consideration less than the market value (Govt. value). He further noted from the audit report of the assessee firm that the auditor in column No.17 of the report has pointed out that certain flats were sold at less than the market value (Govt. value). The Assessing Officer, therefore, vide a show cause notice dated 25.09.2018 asked the following question to the assessee which has been reproduced by him in the body of the assessment order: "You have sold 12 flats to Push Vinayak for total consideration of Rs. 85,37,500/- and the Market Price of the same is shown at Rs. 1,24,07,367/- as pointed out by the Auditor in his Audit Report dated 13.10.2016. Please explain why the difference of Rs. 38,69,867/- should not be included in your income as provided in section 43CA of the Income Tax Act." 4. The assessee in response to the same filed the following details and submitted that those 12 flats were sold to the purchasers at the prevailing rate of market value as on the date of booking: "6.1. In response to the above, the A.R. of the assessee Shri Mahendra Jain, C.A. has filed re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y value of the property assessable as on the date of entering into sale agreement instead of the value assessed as on the date of transfer of the property. Sub section (3) and sub section (4) of section 43CA read as under: "(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 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 any made other than cash on or before the date of agreement for transfer of the asset." 5.3 As a normal business practice, the sale consideration between the seller and the buyer used to be negotiated at the time of entering into sale agreement and not at the time of transfer of the property. Hence, sub section (3) has provided that stamp duty valuation of the property applicable as on the date when sale consideration is fixed between the parties by e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llants submit that the sale consideration received is higher than the market value as adopted or assessed in the year of the sale, though the registration was not in that year. b) The appellants submit that the condition laid under Section 43CA(3) has been fulfilled as stamp duty was paid on the higher of the value of consideration or stamp value referred to in Section 43CA(1). c) The appellants submit that the condition laid under Section 43CA(4) has been fulfilled as the consideration was received in any mode other than cash. d) The appellants further submit that the provisions of Section 43CA are not applicable on the ground that Section 43CA was introduced by Finance Act, 2013 w.e.f from 1st April 2014, whereas the agreement between the buyer and the appellant was entered in the year 2012 The Appellant prays that the addition made by the learned AO and confirmation thereof by CIT(A) be deleted 2. The lower authorities have erred in consequentially levying erroneous interest under Sections 234B and 234C of the Act. The Appellant prays for directions to be given for deletion of erroneous interest under Section 234B and 234C of the Act. 3. The AO erred in initiating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that since the sale consideration amount was higher than the stamp duty value at the time of booking of the flats, therefore, no addition is called for in view of the specific provisions of sub-sections (3) and (4) of section 43CA of the Act. 11. The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. CIT(A) / NFAC. 12. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer in the instant case made addition of Rs. 38,69,867/- by invoking the provisions of section 43CA of the Act on the ground that the assessee has sold 12 flats for a total consideration of Rs. 85,37,500/- whereas the market price of the same was shown at Rs. 1,24,07,367/- as pointed out by the Auditor in the audit report and therefore, the provisions of section 43CA of the Act are applicable. We find the Ld. CIT(A) / NFAC upheld the action of the Assessing Officer, the reasons of which have already been reproduced in the preceding paragraphs. It is the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer and Ld. CIT(A) / NFAC and the paper book filed by both the sides. We find the Assessing Officer in the instant case made addition of Rs. 25,02,250/- in respect of 8 flats on the ground that the market value of these flats was Rs. 2,73,16,150/- whereas the assessee company has registered the flats for a consideration of Rs. 2,48,13,900/- on the basis of agreement value and therefore, the provisions of section 43CA of the Act are applicable. We find the CIT(A) / NFAC, relying on the decision of the Pune Bench of the Tribunal in the case of Rahul Constructions Vs. DIT (supra), deleted the addition in respect of certain flats where the difference is less than 10%. He, however, sustained the addition in respect of remaining flats where the difference is more than 10% between the agreement value and the market price. It is the submission of the Ld. Counsel for the assessee that since the assessee had received part of the consideration in cheque as per agreement much prior to the date of sale, therefore, such agreement value has to be considered for the purpose of provisions of section 43CA of the Act and no addition is called for. We find some force in the above argument ..... X X X X Extracts X X X X X X X X Extracts X X X X
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