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TMI Blog2018 (11) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... reciate the accounting principles and matching concept of income recognition and expenditure claimed." 3. "On the facts and in the circumstances of the case and in law, the Ld- CIT(A) has erred in deleting the additions of Rs. 88,66,633//- ignoring the fact that the assessee has understated the receipts in the books of accounts and there was difference as per AIR information and receipt shown in the books of accounts." 4. "On the facts and in the circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 17,90,500/- on account of Short Term Capital Gain ignoring the fact that the possession of flat was given to the assessee only after March 2009 and the asset in question was held by the assessee for less than 36 months as such the gain arising out of sale of flat was rightly assessed as short Term Capital Gain." 5. "On the facts and in the circumstance of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 15,66,1987/- on account of Long Term Capital Gain ignoring the fact that assessee did not provide any evidence regarding purchase of new property." 6. "On the facts and in the circumstance of the case and in law, the Id. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s books of account and turnover reported in Form 26AS by various contractees, who deducted TDS of payments made to the assessee and payment difference of Rs. 1,95,82,899. According to the AO, although assessee has filed reconciliation statement explaining difference between turnover reported in his books of account and amount appeared in Form 26AS, while reconciling difference, the assessee has deducted amounts shown in work in progress of Rs. 1,41,27,864 even though it is not part of either turnover of the assessee in its books of account or part of receipts appearing in Form 26AS. Therefore, he opined that the assessee failed to reconcile the difference and accordingly made addition. It is the contention of the assessee that it has filed reconciliation statement explaining the difference between turnover as per books of account and turnover reported in Form 26AS and such difference has been explained to the AO with reasons. According to the assessee, in respect of contract receipts received from MCGM, a sum of Rs. 1,95,82,899 was booked as sales / contract receipts for the financial year 2010-11 relevant to AY 2011-12, whereas MCGM has deducted TDS in respect of such contract rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in another financial year and deduct TDS on such payments when the payments have been actually made. The assessees account turnover in their books of account as and when bill is submitted by following mercantile system of accounting. Therefore, there will always be difference between turnover considered by the assessee in its books of account and turnover appeared in Form 26AS. But, in such situation it is for the assessee to explain such difference by filing reconciliation statement to the satisfaction of the AO with evidence. In this case, although assessee claims to have accounted related turnover in the previous financial year, on perusal of the orders of authorities below, the facts are not emanating from the orders. Therefore, we are of the considered view that the issue needs to be re-examined by the AO in the light of claim of the assessee that the said turnover has been accounted in the previous financial year and shown as receivable in books of account. If, the assessee proves his claim with necessary evidence, then the AO is directed to delete addition towards unreconciled contract receipts. 6. The next issue that came up for our consideration is addition towards c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption u/s 54 of the Income-tax Act, 1961. 7. We have heard both the parties and perused the material available on record. Admittedly, the assessee has purchased one flat on 7-05- 2008 by way of an agreement to sale. The AO has considered the date of acquisition of the asset from the date of handing over of the possession by the builder and accordingly considered the date of acquisition from March, 2009 to determine period of holding of the asset. The issue whether, right or interest in the property to be considered from the date of possession or from the date of agreement to sale is settled by decisions of various high courts. Various Courts have consistently held that the holding period of the asset should be considered from the date of acquisition of asset in the light of agreement to sale, but not from the date of possession of the property. In this case, if the date of acquisition of the property has been taken from the date of agreement to sale, then the holding period of the asset is more than 36 months and consequent gain arising from sale of property is assessable under the head 'long term capital gain'. Insofar as second property, there is no dispute with regard to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot been given. Thus in case of the first property the date of purchase will be 07.05.2008. Since this property has been sold by an agreement dated 29.10.2011 the profit of Rs. 4,05,842/- arising out of this transfer of asset will have to be treated as long term capital gain. In this situation the benefit of sec. 54 will have to be allowed if the long term capital gain is invested for purchase of new residential property within the stipulated period. 5.5 It has been held by the Hon'ble Supreme Court of India in the case of CIT vs T N Arvind Reddy (1979) 120 ITR 46 (SC) that the purchase in the context of sec. 54 should be understood in a liberal sense without any undue restriction limiting the meaning to "lexical legalese. It has been held in the case_of_CIT vs Sambandan Uday Kumar (2012) 19 Taxmann.com (KAR) that sec. 54 is a beneficial provision for promoting construction of residential house and therefore it has to be construed liberally for achieving purpose for which it was incorporated in the statute. It has also been held by the Karnataka High Court in this case that once it is demonstrated that consideration received on transfer of capital asset has been invested eithe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of assessment proceedings the AO noticed that the assessee has taken unsecured loan of Rs. 2,18,333 from M/s Kailash Enterprises which an entity related to Pravinkumar Jain group of companies in which evidences of providing accommodation entries have been found as a result of search. The AO, therefore, disallowed the total claim of unsecured loan including interest paid thereon and added the same to the total income of the assessee. It is the contention of the assessee that it has taken unsecured loan from M/s Kailash Enterprises and paid interest to the said party amounting to Rs. 2,18,333 after deducting TDS of Rs. 21,833. The AO has made disallowance of interest amount alongwith TDS merely for the reason that the said party is related to Pravinkumar Jain, but fact remains that the said party is not related to Pravinkumar Jain and also has filed various details to prove identity, genuineness and creditworthiness of the loan creditor. The assessee further contended that the had paid interest on such amount after deducting necessary TDS, therefore, the AO was completely erred in treating loan received from creditor as unexplained credit. 10. We have heard both the parties and p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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