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TMI Blog2019 (2) TMI 1924X X X X Extracts X X X X X X X X Extracts X X X X ..... our considered opinion, the assessee has discharged the onus cast upon him. The A.O. has not brought on record any cogent material for the proposition that the advance received was bogus. It is settled law that the addition based upon surmise and conjecture de hors any enquiry whatsoever is not sustainable. Hence, in our considered opinion, there is no infirmity in the order of the ld. CIT(A). Accordingly, we uphold the same. Addition on account of long term capital gain - CIT(A) deleted the addition - HELD THAT:- The assessee had sold Tenement situated at Mumbai to the purchaser and also right of piece or parcel of tit-bit plot adjacent to the said tenement to the same purchaser. The tenement and the land were sold through two agreements. This was because there were some disputes with the purchaser. The agreement of the lease deed shows that as per the terms of the lease agreement, the lease tit-bit land is to be held by the leaseee only along with the tenement and not separately. In the case of transfer of tenement, the tit-bit area will automatically get transferred. The above makes it abundantly clear that the tit-bit land was to be sold along with the tenement and it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces and in law, the Ld.CIT(A) was justified in accepting the assessee's computation of long term capital gains at ₹ 1,61,00,375/-instead of₹ 2,30,44,395/- as computed by theAO, without appreciating the fact that if the value of the property valued by the Stamp Duty Authorities is more than the sale proceeds received by the assessee the capital gains on such transfer of property is to be recomputed on the basis of the rates taken by the Stamp Duty Authority as per the amended provisions of section 50C of the I.TAct, 1961. Apropos ground no. 1 Addition on account of accommodation entry: 3. Brief facts of the case are as under: The Assessing Officer noted in the assessment order that the information has been received from the Director General of Income Tax (Investigation), Mumbai [DGIT(Inv), Mumbai] vide letter No.DGIT(Inv)/ Information/PJ/2013-14 dated 07.04.2014 intimating that the assessee company is one of the beneficiaries in the accommodation entry operation carried out by Shri Praveen Jain in Mumbai. That as per said information, the beneficiaries took the entries in the nature of sales, unsecured loans and share application money. That in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advance against sale on flat . Similar ledger account confirmation from JTC was filed to the A.O. showing the advance was subsequently returned in A.Y. 2013-14 towards cancellation of flat. The ld. CIT(A) further noted that JTC had given its PAN, address in its confirmation. Hence, the ld. CIT(A) opined that the letter from JTC clearly establishes the nature of the said transaction. 7. The ld. CIT(A) further observed that the A.O. has not disputed these facts that these details were sufficient for assessing officer to have made any further inquiries from JTC but he failed to do so. That nothing has been brought on record to establish that the above transaction was accommodation entry and it is seen that the assessing officer already had the confirmation that the amount was returned by the assessee not in cash but through cheques. That the fact that this was done by cheques on 07.06.2012 09.06.2012 09.06.2012, which was even before the assessing officer received information from Investigation Wing on 07/04/2014 also strongly indicates that the above transaction cannot be treated as accommodation entry in absence of any other proof. That it is trite law that suspicion of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of the information gathered from the search in Shri Praveen Kumar Jain Group companies. He submitted that the concerned party from whom the assessee has obtained the said advance was controlled by Shri Praveen Kumar Jain Group. Hence, he submitted that the presumption that the said accommodation entry is bogus, has been correctly gathered by the A.O. 13. Per contra, the ld. Counsel of the assessee submitted that the assessee has genuinely received an advance for flat purchased with all documentary evidence. He submitted that the A.O. has not disputed the fact that the assessee is engaged in the construction business and he is constructing multy story building. He further submitted that the A.O. is accepting that the assessee is receiving advances from customers for flat. However, he submitted that the present advance has been not accepted by the A.O. only on the ground that the information was received that the entity giving the advances was related to Shri Praveen Kumar Jain Group. The ld. Counsel of the assessee pleaded that the confirmation, the address, PAN number and all the other details of the entity from whom the advances was received have been duly submitted a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1,36,13,125 Long Term Capital Gain ₹ 1,61,00,375 16. The A.O. further noted that during the assessment proceedings, the assessee has been requested to furnish the details and documentary evidences in relation to said income. That on perusal of the details submitted, it is noticed that the assessee has sold Tenement No.B 38 /149 situated at Sunder Nagar, Kalina, Santacruz (East), Mumbai 400 098 on 05.08.2011 for a consideration of ₹ 2,20,00,000 and as Stamp Duty Registration, market value of said property was ₹ 1,37,37,500/-. 17. From the details submitted, the A.O. further noticed that the assessee has entered into another agreement with the purchasers for transfer of rights/of piece or parcel of titbit plot admeasuring 331.15 sq.mtrs adjacent to Tenement No.B38/149. He noted that the assessee has considered the sale value for said plot at ₹ 80,00,000 and therefore, taken the entire sale consideration at ₹ 3,00,00,000 and computed Long Term Capital Gain accordingly. The market value of the said property as per Registration documents is mentioned as ₹ 1,64,75,600 as agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement was put in for registration. 20. The assessee further submitted that as per clause (i) of original lease agreement dated 03.04.2000 with MHADA, the tit bit area along the tenement No.B38/ 149 and not separately, in case of transfer of tenement, the tit-bit area will automatically stand transferred and as per clause 6, tit bit land allotted to lessee can be amalgamated with land previously conveyed by Kalina Cooperative Housing Society and therefore, the lease right in tit bit plot cannot be taken as a separate asset from tenement. The assessee submitted that due to dispute with purchaser the second agreement was registered in 2014 instead of 2011, but whole consideration has been received in FY 2011-12. In view of the above, the assessee was asked to furnish the market value/value for stamp duty purposes of said tit bit plot as on 31.03.2012. The assessee submitted that the stamp duty value for FY 2011-12 for said tit-bit land was ^1,49,44,020 and submitted the copy of ready reckoner for relevant period and calculation of stamp duty for FY 2011-12. The assessee requested to treat the entire transaction as a single transaction though two sale deeds were entered for te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Duty Value ₹ 1,49,44,020 ₹ 1,49,44,020 Total Sale Consideration Less: Cost of Transfer 2,86,500 Indexed cost of acquisition 1,36,13,125 ₹ 1,38,99,625 Long Term Capital Gain ₹ 2,30,44,395 22. From the above working, the Long Term Capital Gain on sale of above property works out to ₹ 2,30,44,395/- as against the Long Term Capital Gain declared in the return of ₹ 1,61,00,375/-. Therefore, the Long Term Capital Gain of the assessee determined at ₹ 2,30,44,395 is hereby taxed in the hands of the assessee company. 23. Against the above order, the assessee appealed before the ld. CIT(A). 24. The ld. CIT(A) deleted the addition by holding as under: 5.5.3 A perusal of the deed of lease dated 22.07.2014 on page 3 shows that As per the terms of Lease Agreement the leased tit-bit land is to be held by the lessee only along w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. The assessee has received the entire consideration in July 2011. The stamp valuation of tit bit land as on 31.03.2012 was ₹ 1,49,44,020/-. Hence, if both the agreements are considered in cohesive manner, it will be found that the total stamp duty valuation comes to ₹ 1,37,37,500/- and ₹ 1,49,44,020/- as compared to the sale consideration received by the assessee totaling to ₹ 2,20,000/- + ₹ 80,000/-. If this is considered, the sale value received is higher than the combined stamp duty value of the property. On this account, the ld. CIT(A) is correct in deciding the issue in favour of the assessee. 26. The assessee succeeds on another count also because in this case, the A.O. has invoked the provision of section 50C in the context of tit-bit leasehold land. It is admitted that it is a lease hold land and it has been held by the ITAT, Mumbai Bench in the case of Atul G Puranik vs ITO [2011] 11 taxmann.com 92 (Mumbai) that section 50C cannot be invoked on transfer of lease hold rights. Since there is no dispute that the impugned tit bit land was under lease, this decision fully applies and the application of section 50C in this case by the A. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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