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2022 (8) TMI 758 - AT - Income TaxAddition u/s 43CA - AO s findings wherein all the transfer instance indicate tolerance margin(s) of less 10% as per section 43CA(1) 1st proviso - Seven residential units sold / transferred in the relevant previous year - HELD THAT - We find no merit in the Revenue s instant arguments as the legislature has incorporated similar tolerance margin(s) of 5 and 10% in section 50C(1), third proviso by the very Finance Act, 2020 w.e.f 01.04.2021. Case law Maria Fernandes Cheryl 2021 (1) TMI 620 - ITAT MUMBAI holds the same as having retrospective effect since curative in nature. We wish to clarify the only difference between section 43CA and section 50C is that the former is applicable in case of transfer of assets other than capital assets whereas the latter provision comes into play in case of transfer of a capital asset in the specified circumstances, respectively. We accept the assessee s instant sole substantive grievance to delete the impugned section 43CA addition.
Issues:
Challenge to section 43CA addition in assessment for Assessment Year 2016-17. Analysis: The appeal was against the Commissioner of Income Tax(Appeals)-3, Pune's order regarding a section 43CA addition of Rs.12,50,490 made during the assessment for the relevant year. The issue pertained to the sale or transfer of seven residential units. The CIT(A) had upheld the addition made by the Assessing Officer. The key contention revolved around the tolerance margin of 10% as per section 43CA(1) 1st proviso. The Revenue argued that the tolerance margin had been changed to 10% by the Finance Act, 2020, effective from 01.04.2021, while the assessment year in question was 2016-17. The tribunal found no merit in the Revenue's argument, citing a case law where similar tolerance margins in another section were held to have retrospective effect. It was clarified that while section 43CA applied to assets other than capital assets, section 50C applied to capital assets under specified circumstances. The tribunal accepted the assessee's grievance and ordered the deletion of the section 43CA addition of Rs.12,50,490. The appeal was allowed in favor of the assessee. The judgment was delivered by SHRI S.S. GODARA, JUDICIAL MEMBER, and DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER, on 4th August, 2022.
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