Delight Propcon Private Limited Vs ACIT (ITAT Delhi)
Delhi ITAT Holds Sec.50C Inapplicable to Buyer; Repayment of Loans Quells Sec.68 Doubts—Additions Deleted
Assessee, a real-estate company, filed return declaring Rs.76,562/-. The case was reopened u/s 147 on the premise that the transaction value of properties purchased was lower than circle rate. AO treated the difference as taxable u/s 50C & further made additions of Rs.30.50 crore u/s 68 towards loans & Rs.12.70 crore u/s 69 towards unexplained investment. CIT(A) upheld the additions.
Before Tribunal, Assessee contended that Sec.50C applies only to seller of property & cannot be invoked in the hands of a purchaser. Tribunal noted that reopening itself was triggered on the incorrect premise that Sec.50C could be applied to a buyer; relying on Sharan Svadha LLP & Jurisdictional HC decision in Oriental Insurance Co., Tribunal held that Sec.50C cannot be applied to purchaser. Accordingly Ground No.6 was allowed & the 50C-based addition was deleted.
On loan additions u/s 68/69, Assessee produced confirmations, ITR acknowledgments, audited financials, bank statements of all lenders & demonstrated complete repayment of loans in subsequent years as reflected in the repayment chart appearing on page 8 of the order. Tribunal observed that AO ignored these documents. Relying on Dazzling Constructions (P.) Ltd. (Delhi ITAT, 2025) & several HC decisions (Ayachi Chandrasekhar Narsangji, Mahavir Crimpers, Karaj Singh, Panna Devi Chowdhary), Tribunal held that once identity, creditworthiness & genuineness stand proved & loans are duly repaid, addition u/s 68 cannot survive. Tribunal also emphasized that there is no statutory obligation on Assessee to prove “source of source” for loan transactions for AY 2011-12.
