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2025 (2) TMI 696 - AT - Income TaxCapital gain computation - Addition u/s.50C - accepting higher circle rate/stamp duty value as against the actual sales consideration on sale of flats - AO observed that the sale consideration reported by the assessee was less than the circle rate determined in terms of Section 50C - HELD THAT - CIT(A) ought to have referred the matter to the file of DVO for determination of fair market value of the property in terms of Section 50C(2) of the Act which was not done in the instant case. In fact even if the assessee does not request for referring the matter to DVO still the ld CIT(A) or the ld AO ought to have referred the matter to the DVO once the adoption of circle rate has been disputed by the assessee. Admittedly the adoption of circle rate has indeed been objected by the assessee which is evident from various points addressed by the assessee before the ld CIT(A) which are already mentioned herein above as to why the circle rate should not be adopted. See Sunil Kumar Agarwal 2014 (6) TMI 13 - CALCUTTA HIGH COURT wherein it was held that when the agreed consideration as per conveyance deed and circle rates are different and assessee objects to the adoption of such circle rate then the ld AO should refer the matter to valuation officer as contemplated in Section 50C(2) - direct the ld AO to refer the matter to ld DVO and determine/ recompute the capital gains in accordance with the provision of Section 50C(2) - Ground raised by the assessee is allowed for statistical purposes. Unexplained cash receipt - HELD THAT - There is absolutely no evidence brought on record by the AO or by CIT(A) to prove the fact that the assessee had indeed received a sum in cash on account of alleged excess sale consideration. No cross verification whatsoever was made by the lower authorities with the buyer of the property i.e. Shri Krishan Kumar. Hence there is no scope for making any addition on the ground of suspicion that assessee had received in cash on sale of property. Sale deed was ultimately registered by the assessee only on 05.04.2011 which falls in AY 2012-13. Hence in any event the alleged differential sale consideration figure cannot be brought to tax in the hands of the assessee for the year under consideration. Accordingly ground Nos. 2 and 3 raised by the assessee are allowed. Addition of cash paid towards construction cost - AO observed that the assessee failed to explain the source of payment - HELD THAT - The assessee placed on record the cash flow statement also giving the daily cash balance available with him. This cash flow statement cannot be ignored to be of general in nature. We find that this cash flow statement requires factual examination of the ld AO to ascertain on a holistic basis as to whether the said statement would provide sufficient cash source to the assessee to explain the payment of Rs. 40 lakhs on 23.02.2011. To the extent of available cash source the assessee certainly is entitled for relief. With these directions we restore ground No. 4 to the file of the ld AO and allow for statistical purposes. Unexplained cash credit and unaccounted expenditure - loose slip found - HELD THAT - On perusal of the impounded documents crucially we find that no date or year is mentioned. Hence there is no cogent material brought on record by the revenue to justify the fact as to whether the said loose slip even pertains to the year under consideration. The said loose slip nowhere states that Rs. 10 lakhs was either received by the assessee or paid by the assessee. Hence it could be safely concluded that the said loose slip is nothing but a mere dumb document based on which no addition could be made in the hands of the assessee. AO relates this loose slip and interest payment for May and June to be relating to May and June 2009. If that be so then it only pertains to AY 2010-11 and hence no addition could be made for the year under consideration. The addition deserves to be deleted even on this count. Addition u/s 68 - impounded document during the survey which consists of Kacha Khata of Vipin Sharma to whom the assessee had given loan - HELD THAT - Before us the assessee who was present in person confirmed the fact that he had sold old generator to his cousin Vipin Sharma and since the cheque given by Vipin got bounced the assessee received in cash towards sale of old generator. We find only the date and figure and name of Vipin are mentioned in the said loose sheet. The nature of payment or receipt is not even mentioned thereon. Hence the explanation given by the assessee could be considered as a plausible explanation in the facts and circumstances of the case. However this matter in our considered opinion requires factual verification. Hence we deem it fit and appropriate in the interest of justice and fairplay to restore this issue to the file of ld AO for de novo adjudication in accordance with law and also in the light of explanation given by the assessee before us. Accordingly ground No. 6 raised by the assessee is allowed for statistical purposes.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment include:
ISSUE-WISE DETAILED ANALYSIS 1. Addition under Section 50C of the Act
2. Addition of Rs. 43,20,000/- as Unexplained Cash Receipt
3. Addition of Rs. 40,00,000/- Paid to M/s. Ring India Infotech Pvt. Ltd.
4. Addition of Rs. 10,00,000/- under Section 68 and Rs. 40,000/- under Section 69A
5. Addition of Rs. 1,70,000/- under Section 68
SIGNIFICANT HOLDINGS
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