Babosa Corporation vs. Income Tax Officer Kalyan

Parties Involved

Facts Summary

Babosa Corporation, a partnership firm engaged in the business of Builders and Developers, filed its return of income for the Assessment Year 2015-16 on 4/9/2015 at a total income of Rs. 1,371,280/-. This return was picked up for scrutiny and notice under section 143 (2) was issued on 28/7/2016. During assessment proceedings, the Assessing Officer found that in case of 4 units of the building sold by the assessee, the consideration was less than the government value declared for stamp duty purposes. The difference of the sale consideration and stamp duty value cumulatively for all these 4 properties was Rs. 4,131,875/-. The assessee explained that the ready reckoner value of the above stated properties was higher than the prevailing market rate and further there had been a reduction in the prices of the certain units as they were in the first and second floors and not on the ground floor. The Assessing Officer applied the provisions of section 43CA of the act and made an addition of Rs. 4,171,835/–. Consequently, the total income of the assessee was assessed at Rs. 5,543,115/– against the returned income of Rs. 3,071,280/– by the assessment order passed under section 143 (3) of the act dated 29/12/2017.…

Legal Issues

• 1. The learned CIT (A) erred in law and on facts in invoking the provisions of section 43CA of the income tax act, 1961 while upholding the addition of Rs. 4,010,875/– in respect of commercial units transferred by the appellant without appreciating that they cannot be equated with building as the occupation certificate from the competent authority was not received when the same were transferred.
• 2. The learned CIT (A) erred in law and on facts in not considering the provisions of first proviso to section 43CA of the act inserted with effect from 1/4/2019, which is applicable retrospectively in terms of which the provisions of section 43CA cannot be made applicable where the difference between the stamp duty valuation and the sale consideration is less than 10% of the tolerance limit.

Judgment Outcome

Decided in favour of Assessee.

Similar Judgements

• Debasish Banerjee vs. ITO, Ward-44(1), Kolkata

  Kolkata Bench benchAY 2018-19Allowed

• Biswarup Samadder vs. ITO, Ward-25(1), Haldia

  Kolkata Bench benchAY 2020-21Allowed

• Tushar Ramnath Shetty v/s The Income Tax Officer

  Mumbai bench

• VIVEK OMPRAKASH ABROL Vs. INCOME TAX OFFICER

  Mumbai bench

• Shubhlaxmi Land Developers v/s Income Tax Officer

  Nagpur bench

• Bhushan Vasant Parelkar vs Income Tax Officer, Ward 41(2)(1), Mumbai