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2024 (6) TMI 1365 - AT - Income TaxIssues: 1. Addition of Rs. 93,300 due to difference in sale consideration and stamp duty. 2. Addition of Rs. 1,27,85,800 as entire sale value of two flats. Analysis: Issue 1: Addition of Rs. 93,300 The appeal was against the order of the National Faceless Appeal Centre for the Assessment Year 2015-16. The assessee, a property development company, sold flats during the year but faced a difference in sale consideration and stamp duty for one flat. The Assessing Officer (AO) added the entire sale proceeds to the assessee's income, disregarding the explanation provided. The first proviso to section 43C of the Income Tax Act, which allows a 10% leverage, was invoked by the assessee to challenge the addition. The Tribunal found that the difference in property value was only 2.5%, making the addition unsustainable. Consequently, the addition of Rs. 93,300 was deleted in favor of the assessee. Issue 2: Addition of Rs. 1,27,85,800 The second ground of appeal related to the addition of Rs. 1,27,85,800 as the entire sale value of two flats. The assessee had included the sale consideration of both flats in the subsequent year's accounts, where the profit was declared after deducting the cost of construction. The Tribunal noted that the principle of tax neutrality is crucial to prevent double taxation and ensure fair taxation. Referring to a Supreme Court case, it was established that when an addition is tax-neutral, no double addition should occur. As the assessee had already shown the income in the following financial year, the Tribunal directed the AO to delete the alleged addition. The appeal was allowed in favor of the assessee, emphasizing the importance of tax neutrality and avoiding double taxation. In conclusion, the Tribunal ruled in favor of the assessee, deleting both additions and allowing the appeal. The judgment highlighted the significance of applying tax neutrality principles to prevent double taxation and ensure fair and equitable taxation practices.
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