469
June 29 To July 5, 2019 u Taxmann’s Corporate Professionals Today u Vol. 45 u 57(AO) disallowed the exemption on grounds
that assessee had purchased new property
beyond period of one year prior to date of
transfer prescribed under section 54.
The Delhi ITAT held that assessee had booked
a semi finished flat with the builder and as
per agreement, he had to make payment in
instalments and the builder was to construct
the unfinished bare shell of flat for finish-
ing by the buyers on their own to make it
liveable.
It had to be considered as a case of pur-
chase of property for construction of new
residential house and not purchase of a flat.
Therefore, he had a time window of three
years available to him to construct a house
property.Further, the construction was com-
pleted within three years from the sale of
original asset, which was accepted by the
AO. Thus, the relief under section 54 was
genuinely claimed by the assessee.
AT confirmed sec. 69A additions IT
made in respect of bogus share
transactionsPooja Ajmani v. ITO [2019] 106 taxmann.
com 65 (Delhi - Trib.)
Assessee filed her return wherein long-term
capital gain arising from sale of shares of ‘K’
Ltd. was claimed as exempt under section
10(38). AO received information from Inves-
tigation Wing that number of penny stock
companies were providing bogus entries of
long-term capital gain on sale of their shares
and, ‘K’ Ltd. was one of those companies.
He carried out detailed investigation and
found that assessee’s transactions of sale of
shares of ‘K’ Ltd. were sham. Thus he added
amount of long-term capital gain to assessee’s
income under section 69A.
Tribunal noted that assessee had failed to
discharge her burden of proof that long-term
capital gain arising from sale of shares was
genuine. On other hand, enquiry conduct-
ed by SEBI was further corroborated by
investigation carried out by Directorate of
Investigation that ‘K’ Ltd. was one of such
companies whose scrips had been manipulat-
ed to provide bogus long-term capital gains.
Therefore, impugned addition made by AO
was to be confirmed.O couldn’t dispute method of valA -
uation of closing stock if same was
accepted by revenue in earlier yearsITO v. Wasan Exports (P.) Ltd. [2019] 106
taxmann.com 21 (Delhi - Trib.)
Assessee was engaged in business of leather,
leather shoes, leather shoe-uppers, etc., in
respect of which assessee had a closing stock
of raw material and finished goods.
It had shown value in closing stock of these
items at nil. Assessing Officer (AO) noted that
no cogent reasons were given in respect of
stocks valued at nil. He took value of closing
stock at `67.83 lakhs and made addition to
income of assessee.
Delhi ITAT noted that assessee filed valuation
report of stock during remand proceedings
which was not adversely commented upon
by AO. Further, assessee had followed similar
method of valuation of closing stock at cost
or market value, whichever was less in earlier
years and same was accepted by revenue.
Further, it was clear that these items reduce
in their value from day to day. Thus, on
facts, impugned additions made by AO were
to be deleted.
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