Case Law Details
Gayatri Enterprise Vs ITO (Gujarat High Court)
Provisions of Section 50C of the Income Tax Act cannot be applied for the purpose of making addition under section 69B of the Act. We fail to understand why section 50C of the Act has been brought into play having regard to the facts of the present case. It is settled law that section 50C will apply to the seller of the property and not to the purchaser of the property. However, section 50C of the Act does not seem to have been invoked by the authority below for the purpose of adding the income under section 69B of the Act. At the most, the principle of law, as discernible from the provisions of section 50C, could be said to have been indirectly applied for the purpose of taking the income under Section 69B of the Act.
Therefore, we propose to examine the issue at hand from a limited angle whether a presumption could have been drawn about the excess amount alleged to have been made by the appellant – assessee at the time of the purchase of the land having regard to the fact why he thought fit to pay such a huge stamp duty on a total sale consideration of Rs. 45 lakh and odd. We shall confine our adjudication only on this limited issue whether such a presumption is permissible in law.
Section 69B of the Act reads as under:
“Where in any financial year the assessee has made investments or is found to be the owner of any bullion, jewellery or other valuable articles, and the Assessing Officer finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not in the opinion of the Assessing Officer, satisfactory, the excess amount may be deemed to be the income of the assessee for such financial year.”
Please become a Premium member. If you are already a Premium member, login here to access the full content.
