CSJ Infrastructure Pvt. Ltd. Vs ACIT (ITAT Chandigarh)
The Income Tax Appellate Tribunal (ITAT) Chandigarh has issued a ruling in a cross-appeal case involving CSJ Infrastructure Pvt. Ltd. and the Assistant Commissioner of Income Tax (ACIT), addressing tax disputes for the assessment years 2014-15 and 2015-16. The primary issue centered on the determination of profit from the sale of four shops and the tax treatment of interest expenses incurred on land conversion fees. The Tribunal’s decision, delivered on May 28, 2025, resolved appeals from both the company and the revenue authority, ultimately favoring the taxpayer on all key points of contention.
Regarding the profit on the sale of shops, the core of the dispute revolved around the application of Section 43CA of the Income Tax Act, 1961, which governs the taxation of profits from the sale of real estate as stock-in-trade. The assessing officer had applied the section to deem the stamp duty valuation as the full sale consideration, leading to a higher taxable income for the company. The company argued that the original agreement to sell was executed in 2011, before Section 43CA was in effect, and that the stamp duty rates at that time were not clear. The company’s counsel also highlighted a statutory tolerance band, arguing that the difference between the declared sale price and the stamp duty valuation was less than 10%, a threshold provided for in the law.
