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| The Tax Publishers2020 TaxPub(DT) 1692 (Mum-Trib) INCOME TAX ACT, 1961
Section 43CA
Proviso to section 43CA(1), inserted by the Finance Act, 2018 is retrospective in nature, therefore, no addition shall be made by AO by invoking the provisions of section 43CA and accordingly, AO should restrict the disallowances only to those cases where the variation exceeds 105%.
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Business disallowance under section43CA - Proviso to section 43CA - Whether retrospective in nature -
Assessee was a builder and developer. During the course of AO invoked the provisions of section 43CA. He made disallowances being difference between agreement value for sales and the stamp value for the registration. CIT(A) upheld the action of AO. Held: A proviso was inserted to grant relief where there is only a 5% variation in the agreement value and stamp value. In such circumstances the proviso granted relief in as much as the difference of 5% is to be ignored and deeming provision of section 43-CA should not be invoked. This proviso was aimed at mitigating the hardship or the mischief which was caused to taxpayer on invocation of deeming provisions of section 43-CA where there is marginal variation upto 5%. In case where variation is up to 5% no addition shall be made by AO by invoking the provisions of section 43-CA. Accordingly, AO should restrict the disallowances only to those cases where the variation exceeds 105%.
REFERRED :
FAVOUR : Partly in assessee's favour
A.Y. : 2015-16
THE ITAT, MUMBAI SMC BENCH
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