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TMI Blog2019 (3) TMI 893X X X X Extracts X X X X X X X X Extracts X X X X ..... ained vacant for whole year the income assessable would be NIL u/s. 23(1)(c) of the Act. - reject the ground raised by the Revenue. - I.T.A. No. 5911/DEL/2014 - - - Dated:- 13-3-2019 - Shri H.S. Sidhu, Judicial Member And Shri O.P. Kant, Accountant Member For the Assessee : S h . C.P. Singh, Sr. DR. For the Revenue : Mr. Ashok Khandelwal, CA Sh. Akash Khandelwal, CA ORDER PER H.S. SIDHU : JM The Revenue has filed this Appeal against the impugned Order dated 27.8.2014 of the Ld. CIT(A)-XXVI, New Delhi relevant to assessment year 2010-11. 2. The grounds raised in the appeal read as under:- 1. The CIT(A) has erred in deleting the addition of ₹ 1,90,59,000/- without appreciating that the AO had rightly enhanced the value of the property keeping in view the value taken by the Registrar of Stamps on the basis of prevailing circle rates. 2. The CIT(A) has not correctly appreciated the facts of the case which establish that the assessee is not a builder / developer but only using a device by showing properties as stock-in-trade so as to pay less tax by selling them much below the circle rate. 3. The CIT(A) has erred in deleting the addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat Ld. CIT(A) has elaborately discussed the issues in dispute vide para no. 6 to 6.5 and para no. 7.2 to 7.4 of the impugned order. The relevant finding of the Ld. CIT(A) are reproduced as under:- 6. I have carefully considered the submission of the appellant and perused material on the record. I have gone through the above cited judgments, which hold that in case there is a document evidencing the sale and there is nothing on record to prove that the assessee has paid anything more than the sum stated in the deed evidencing the sale, the sale consideration should be the value stated in the document of sale and not any other value, has to be taken for computing the income of the seller. It is trite law that a person who alleges a particular fact has to prove the same by cogent positive evidence. Once the evidence is led and the individual against whom it is alleged is confronted with that evidence, the law presumes that the individual alleging a fact has discharged the onus and thereafter, it is for the other individual against whom the evidence is produced to rebut the same and demonstrate that the evidence so led is not a good and sufficient evidence. Here, the underst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord by the AO to substantiate his finding even after conducting various enquires as stated in the appellant's submission. Even if market value of property appears to be higher than consideration declared by assessee in sale document, this cannot by itself be sole ground for treating difference between declared consideration and market value as income of the appellant without establishing that higher consideration has been paid over and above consideration indicated in sale document. Since there is no evidence on the record to show that the parties had arranged to put a fictitious price in the agreement, the commercial expediency of the contract was to be adjudged by the contracting parties as to its terms. 6.3 It is neither a case where the provisions relating to Capital Gains will apply nor will the case laws relating to Capital Gains apply. However, I am of the considered view that the ratios laid down in the case laws relating to Capital Gains have bearing on this case also. Various Hon'ble High Courts have held that full value of consideration u/s 48 cannot be construed fair market value as per Section 55A of the Income Tax Act. The Hon'ble Delhi High Court ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the properties statutorily in the company, the cloak given to the firm is replaced by a different cloak and the same firm is now treated as a company, after a given date. In the circumstances, in our view, there is no transfer of a capital asset as contemplated by section 45( 1) of the Act. Even assuming for the sake of argument that there is a transfer of a capital asset under section 45(1) because of the definition of the word transfer in section 2(47)(iii), even then we are of the view that the liability to pay capital gains tax would not arise because section 45(1) is required to be read with section 48, which provides for mode of computation. These two sections are required to be read together as the charging section and the computation section constitute one package. Now, under section 48 it is laid down, inter alia, that the income chargeable under the head Capital gains shall be computed by deducting from the full value of the consideration received or accrued as a result of the transfer, the cost of acquisition of the asset, and the expenditure incurred in connection with the transfer. Section 45(4) is mutually exclusive to section 45(1). Section 45(4) categoricall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 45(4) are mutually exclusive. Under section 45(4) in cases of transfer by way of distribution and where such transfer is as a result of dissolution, the Department is certainly entitled to take the full market value of the asset as full value of consideration provided there is transfer by distribution of assets. In this case, we have held that there is no such transfer by way of distribution and, therefore, section 45(4) is not applicable. This deeming provision, regarding full value of consideration, is not there in section 45( 1) read with section 48. If one reads section 45(1) with section 48, it is clear that the former is a charging section and if that section is applicable, the computation has to be done under section 48, which only refers to deductions from the full value of consideration received or accruing. Section 48 does not empower the Assessing Officer to take the market value as the full value of consideration as in the case of section 45(4). In the circumstances, even if we were to hold that vesting amounts to transfer, the computation is not possible because it has been laid down in the above judgment of the Supreme Court that full consideration cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale, then the sale consideration shall be the full value of consideration stated in the document of sale and not any other value. Thus, in view of above discussion and legal pronouncements. I am of the view that the AO has erred in adopting the sale price @ circle rate for the purpose of computing the appellant's income. Accordingly, the addition of ₹ 1.90.59.000/- is hereby deleted. The AO shall allow the consequential relief. .. 7.2 I have carefully considered the facts of the case and perused the material on the record. It is evident from the record that the house at Ranjeet Nagar is occupied by the appellant for his business purposes. The property at Ranjeet Nagar is shown as the office of the appellant not only in the Income Tax records but the appellant's audit report, etc. etc. Therefore, I do not see any justification on the part of the AO in assessing any deemed income from this property. Accordingly, the addition of rental income of ₹ 1,20,000/- on this score is hereby deleted. 7.3 To work out income from the house property, the annual value of house property as per section 23(l)(a) has to be determined first. Annual Value is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Annual value from the commercial properties at Panipat. Faridabad and the property at Saharanpur are directed to be determined after allowing the benefit of vacancy u/s 23flKc'). The AO's action in assessing the notional rental income from these house properties is held not-justified. Thus, the addition made under the head house property in the impugned order in respect of the properties at Panipat. Faridabad and Saharanpur is deleted. Accordingly, grounds No. 5 to 8 are allowed. Consequential relief shall be given by the AO 6.1 After perusing the findings of the Ld. CIT(A), as aforesaid and after going through the case laws cited by both the parties, we are of the view that the case law cited by the Ld. DR is distinguished on the facts of the case. However, the case laws cited by the Ld. CIT(A) in his impugned order are directly applicable on the facts of the case and the decision of the ITAT, Mumbai in the case of Sh. Sachin R. Tendulkar vs. DCIT decided in ITA no. 3755/Mum/2016 dated 10.8.2018 is also applicable in the present case, wherein it was held that in case property has remained vacant for whole year the income assessable would be NIL u/s. 23(1)(c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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