Provisions of Section 43CA of Income Tax Act can invoke only When Sale Value of Property price lesser than Stamp Value: ITAT [Read Order]

The Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) has held that provisions of Section 43CA of Income Tax Act,1961 can invoke only when sale value of property price lesser than stamp value.

Shri Debash is Roy, the assessee filed a return of income for the instant year on 30/09/2015 declaring a total income of Rs. 44,37,510/-which was processed under section 143(1) of the Income Tax Act. The Assessing Officer during the course of assessment proceedings observed that the assessee has shown huge sundry creditors of Rs.4,35,27,806/- as of 31/03/2015 and called upon the assessee to furnish details thereof and also prove the genuineness of these liabilities.

The Assessing Officer observed from the ITS details that the assessee had purchased immovable properties for consideration of Rs.2,05,00,000/- the stamp value whereof is much higher and thus, there was a difference of Rs.16,97,688/-.

The Assessing Officer treated as income from other sources in consonance with the provisions of Section 43CA of the Income Tax Act and accordingly, after issuing show cause notice to the assessee added the same to the income of the assessee. The CIT(A) in the appellate proceedings, deleted this addition by holding that the provisions of section 43CA do not apply to the purchase of the property.

A Coram consisting of Shri Rajpal Yadav, Vice President & Shri Rajesh Kumar, Accountant Member observed that the assessee has purchased land for a consideration of Rs.2,05,00,000/- whose stamp value as per the stamp valuation authority was Rs.2,21,97,688/- and thus there is a difference of Rs.16,97,688/- which was added by the AO to the income of the assessee u/s 43CA of the Income Tax Act. We note that this transaction of purchase done by the assessee has a much higher stamp value.

The Tribunal viewed that provisions of Section 43CA of the Income Tax Act do not apply to the purchase of property but section 43CA of the Income Tax Act deals with the case where the sale value of property held as stock-in-trade is sold during the year at a price lesser than stamp value. While dismissing the appeal of revenue upheld the order of the CIT(A) on this issue by dismissing the ground raised by the revenue.

To Read the full text of the Order CLICK HERE

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