SUYOG STRUCTURE,PUNE vs. DEPUTY COMMISSIONER OF INCOME-TAX, PUNE

The first ground seeking the setting aside of the assessment order passed by the AO pending report of the DVO was not pressed. The same is, therefore, dismissed.

The only issue which survives through the other three grounds is against the confirmation of addition made u/s.43CA of the Income-tax Act, 1961 (Act).

Briefly stated, the facts of the case are that the assessee firm is a Promoter and Builder who filed the return declaring total income of Rs.1.02 crore. During the course of assessment proceedings, the assessee was required to submit sales chart giving details of agreement value and stamp duty value. The assessee submitted the same, as have been captured at page 2 of the assessment order. The AO observed that there was difference in the agreement value and stamp duty value totaling to Rs.2.85 crore in respect of transactions with Rajkumar C.

Behr, partner of the assessee firm. Similar difference was found in respect of transactions with outsiders to the tune of Rs.23,01,298/-. Invoking the provisions of section 43CA, the AO made addition of both the sums, namely, Rs.2.85 crore and Rs.23.01 lakh. The ld. CIT(A) confirmed the additions.

At the outset, the ld. counsel for the assessee contended that the additions were made in contravention of the provisions of section 43CA(3) and (4). The ld. AR contended that agreements were entered into with the partner of the assessee firm and other parties, in respect of which the additions have been made, in A.Y. 2011-12 when the stamp value was at much lower level. He submitted that the AO failed to take note of this fact and made the addition by adopting the stamp value on the date of registration of agreement relevant to the year under consideration. On a specific query, the ld. AR admitted that this issue was not raised before the ld. CIT(A) or the AO. He, however, maintained that this being a legal issue can be taken up even at the Tribunal level. We are satisfied with the argument of the ld. AR that consideration of the provisions of sub-sections (3) and (4) of section 43CA is a legal issue and needs to be looked into. It is found that there is no discussion on this issue either in the assessment or the impugned order. Without going into the applicability or otherwise of these sub-sections, we are of the considered opinion that it would just and fair if the impugned order is set-aside and the matter is remitted to the file of AO. We order accordingly and direct him to decide the issue afresh in the light of legal provisions and the submissions to be advanced by the assessee in respect of the applicability of sub- sections (3) and (4) of section 43CA. Needless to say, the assessee will be allowed reasonable opportunity of hearing.

In the result, the appeal is partly allowed for statistical purposes. Order pronounced in the Open Court on 16th November, 2022.