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Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH, AHMADABAD
Before: SHRI RAJPAL YADAV & SHRI AMARJIT SINGH
PER : Rajpal Yadav, Judicial Member
The assessee is in appeal before the Tribunal against the order of the CIT(A)-XXI, Ahmedabad dated 30.01.2014 passed for AY 2009-10.
In the first ground of appeal, grievance of the assessee is that the learned CIT(A) has erred in confirming the addition of Rs.20Lakhs in the calculation of short term capital gain under s.50(1) of the Income Tax Act.
ITA No. 695/Ahd/14 A.Y.2009-10 (Sheth Cement Products Pvt. Ltd. vs. ITO) Page 2 3. The brief facts of the case are that assessee has filed its return of income electronically on 16th September, 2009 declaring total income at Rs.2,20,290/-. The case of the assessee was selected for scrutiny assessment and notice under s.143(2) of the Act was issued and served upon the assessee. The AO got information from Annual Information Report Wing exhibiting that assessee has sold immovable property valued at Rs.40Lakhs by registered sale deed. However, while computing the capital gain it has shown the sale consideration at Rs.20 Lakhs. Learned AO has examined this aspect and ultimately took the value of the immovable property at Rs.40 Lakhs and computed short term capital gain. The case of the assessee is that it had purchased a property from Gujarat Financial Corporation which was sold to Shri Rajendra Babulal Vani on 23rd May, 2008. As per the sale deed, value was considered at Rs.40 Lakhs. According to the assessee, Shri Vani carried out a survey of the factory premises and informed the assessee that certain machineries were in bad shape it cannot fetch this much value. Hence, assessee has agreed for the return of Rs.20 Lakhs. The assessee has considered those Rs.20 Lakhs unsecured deposits on behalf of Shri Vani in its books of accounts. Accordingly, in the computation of capital gain, assessee took value of Rs.20 Lakhs only. The learned AO was not satisfied with this calculation of assessee and rejected the same. He took the value at Rs.40 Lakhs and confirmed the capital gain.
The appeal to the CIT(A) did not bring any relief to the assessee.
With the assistance of learned representatives, we have gone through the records carefully. The only evidence referred by the learned counsel for the assessee in support of the contention of the assessee is the letter of Rajendra Vani dated 28th May, 2008 which is placed on page no.115 of the paper book. It read as under:
ITA No. 695/Ahd/14 A.Y.2009-10 (Sheth Cement Products Pvt. Ltd. vs. ITO) Page 3 Mohit Cement Pvt. Ltd. Mobha Village Muvad Cross Roads, Dist – Vadodara Date: 28/5/2008 To, Sheth Cement Products Pvt. Ltd. Third Floor, Pushpam Building, St. Xavier’s College Corner, Besides Campus Corner, Navrangpura, Ahmedabad Dear Sir, Subject: In the matter of reimbursement of additional payment. This is most respectfully requested that the amount of consideration of Rs. 40 Lakh was decided between us for the purchase of the factory and accordingly, the sale deed has been executed. However, the machinery in the factory is not adequate and they have been stolen. In this regard, a dispute is going on between GSFC. Moreover, there is also a possession of unauthorized person over the land and as per mutually decided, you have to give back the amount of Rs. 20 lakh and the same amount of us is to be kept as a loan and it Is requested to return us (to reverse) back the same in case the dispute is unresolved. Our PAN no. os AEHPV7297M and our assessment is made in ward/circle ____ Baroda. Thanking you. Yours faithfully, Mohit Cement Pvt. Ltd., Sd/- Raju Vani.
We have confronted the learned counsel to show us the survey carried out by the technical person showing the depilated condition of the building and machinery, resolution/agreement between the assessee and Shri Vani for reduction of the sale consideration, refund of the sale consideration and modification of sale deed, no such documents have been referred everything has been submitted orally except the above letter. It is pertinent to observe that in this letter also Rs.20 Lakhs was agreed to be kept in suspense account i.e. on behalf of Mohit Cement, Shri Rajendra Vani. It is one side observation. It is to be paid back to the purchaser on resolution of the dispute. The assessee has to compute the capital gain taking into
ITA No. 695/Ahd/14 A.Y.2009-10 (Sheth Cement Products Pvt. Ltd. vs. ITO) Page 4 consideration the sale consideration agreed and paid by the purchaser in the sale deed. If there is any subsequent development and assessee has relinquished certain rights in favour of the purchaser then its treatment could be given subsequently in the year in which actually such incident took place. There is nothing on the record except a bald statement. There is no material with the assessee showing that it has not received Rs.40 Lakhs. Therefore, we do not find any merit in the submissions made by the learned counsel, on this ground of appeal, it is rejected.
In the next ground of appeal, assessee has pleaded that learned CIT(A) has erred in confirming the disallowance of Rs.20,000/- under s.37 of the Income Tax Act. No arguments were raised on this ground of appeal, hence it is rejected.
In the result, appeal of the assessee is dismissed.
This Order pronounced in open Court on 05/12/2018
Sd/- Sd/- (AMARJIT SINGH) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 05/12/2018 True Copy S.K.Sinha आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. अपीलाथ� / Appellant 2. ��यथ� / Respondent 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।