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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 ..... 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. Addition towards capital gain from sale of properties - eligibility for exemption u/s 54 - Held that:- Facts remain unchanged. The revenue fails to bring on record any contrary evidence to counter the findings of fact recorded by the Ld.CIT(A). The Ld.CIT(A) has recorded categorical finding that capital gain computed by the assessee from sale of two properties is a long term capital gain and the assessee is eligible for exemption u/s 54 of the Act. Hence, we are in agreement with the findings of the Ld.CIT(A) and reject ground raised by the revenue. Addition made towards unsecured loan u/s 68 - CIT(A) deleted addition made by the AO by holding that the AO has not conducted necessary enquiry before making additions - Held that:- We find that payment of interest and deduction of TDS from such interest is not sacrosanct. What is relevant is whether assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 ₹ 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. CIT(A) has erred in admitting the addition regarding purchase of new property in violation to the provisions of the Ruel 4GA of the Income Tax Rules, 1962 and consequently directing the Assessing officer to grant deduction u/s 54 of the Act. 7. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of ₹ 2,40,166/- made on account of unsecured loans and interest as the assessee has failed to prove the identity ,creditworthiness and genuineness of the said loan. Also the party from whom the alleged loan was received by the assessee was listed as hawala entry provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 ₹ 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 receipts in the financial year relevant to AY 2012-13 but the assessee has considered only TDS amount for AY 2012-13 for the reason that the turnover has been already entered in the books of account for earlier years and shown as debtors. The AO, without understanding this reconciliation filed by the assessee, made addition only on the basis of amount appeared in Form 26AS ignoring evidences filed by the assessee. Similarly, the assessee has filed reconciliation statement explaining difference of ₹ 88,66,633 with corresponding TDS amount of ₹ 1,77,333. 4. We have heard both th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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 capital gain from sale of properties. The facts relating to the impugned dispute are that during the financial year relevant to AY 2012- 13 assessee has sold immovable property for a consideration of ₹ 71 lakhs vide sale agreement dated 29-10-2011. The assessee has computed long term capital gain from sale of two properties by adopting indexed cost of acquisition and claimed exemption u/s 54 of the I.T. Act for purchase of another residential house property. The AO has recomputed long term capital gain derived from sale of one residential property for the reason tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om 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 the holding period and related computation of long term capital gain. The AO has denied benefit of exemption claimed u/s 54 only on the ground that the assessee has not filed any evidence to prove investment in purchase of another residential house property. The Ld.CIT(A) has recorded categorical finding that the assessee has filed various details including copy of document evidencing purchase of another residential house property for a consideration of ₹ 2,03,54,000. The Ld.CIT(A) further recorded that the assessee has purchased new residential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 either in purchase or in construction of the residential house, even though these transactions are not complete in all respects as required under law, same would not disentitle assessee from benefit of exemption under sec. 54. 5.6 Regarding the second property there was no dispute that long term capital gain of ₹ 15,66,1977- has arisen from transfer of this property. The only reason why the benefit of sec. 54 was denied by the AO was the fact that the appellant had not submitted the detail of investment in new residential house. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... secured loan from M/s Kailash Enterprises and paid interest to the said party amounting to ₹ 2,18,333 after deducting TDS of ₹ 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 perused the materials available on record. According to the AO, the assessee has not filed any evidence to prove loan taken from M/s Kailash Enterprises in the backdrop of finding of the Investigation Wing that the said entity is related to Pravinkumar Jain group of companies, who was involved in providing accommodation entries. The Ld.CIT(A) deleted addition made by the AO on technical ground without examining the findings of the AO. The Ld.CIT(A) deleted addition made by the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X
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