Case Law Details
Anil Kumar Paik Vs DCIT (ITAT Kolkata)
Conclusion: Advances received against booking of flats were not an unexplained investment under section 69 as there was no mechanism under the Act to make the addition for the excess of fair market value over the purchase consideration paid for purchase of immovable property before 01/04/2017 and assessee had duly disclosed the transactions as consideration had been paid through banking channel thus, no addition to be made.
Held: Assessee-individual was carrying out various types of business including property development, liquor shop, medicine shop and rental income. The return was selected for scrutiny by issuance of notice u/s 143(2) and 142(1). AO noticed as per the ITS details, assessee had purchased a flat for a consideration of Rs. 44,24,850/-but in the reply filed by assessee on 28/09/2015, it was submitted that during Financial Year 2013-14 no new property had been purchased. Thus, AO made an addition for unexplained investment of Rs.48,00,000/-. It was held that assessee during the course of assessment proceedings stated to have not made any new investment in purchase of immovable property during the year as no such investment was appearing in any balance sheet of the sole proprietorship concern owned by him. However, details of the investment in the said property had been filed and the purchase consideration had been paid out of the bank account duly disclosed in the income tax return. However, as per the stamp valuation authority, the value of the said property for the purpose of stamp valuation was adopted at Rs.44,12,850/-. On the other hand, purchase consideration paid by assessee was Rs.7,00,000/- and the same was duly appearing in the purchase deed. Firstly the said transaction was not an undisclosed transaction as it had been carried out through a disclosed bank account. Further, the provisions for making the addition on the basis of difference of stamp duty valuation/fair market value of such property which exceeds the actual consideration paid had been brought into the statute in Section 56(2)(x)(b) by the Finance Act No. 2017, effective from 01/04/2017. Since the instant appeal pertained to Assessment Year 2014-15, there was no mechanism under the Act to make the addition for the excess of fair market value over the purchase consideration paid for purchase of immovable property. Thus, since the assessee had duly disclosed the transactions as consideration had been paid through banking channel, no addition was called for on account of unexplained investment u/s 69 at Rs.44,12,850/-.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
The present appeal is directed at the instance of the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter the “ld. CIT(A)”) dt. 03/03/2023, passed u/s 250 of the Income Tax Act, 1961 (“the Act”) for the Assessment Year 2014-15.
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