Assessee wins case, Section 56(2)(vii)(b) not applicable.

The Tribunal found in favor of the assessee, ruling that the provisions of Section 56(2)(vii)(b) were not applicable as the transaction fell within the proviso's exemption criteria. The Tribunal set aside the lower authorities' orders, allowing the appeal and concluding that the difference amount was not to be taxed as income from other sources under Section 56(2)(vii)(b). The decision was pronounced on 30th August 2019.

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Issues Involved:
1. Sustaining the addition made under Section 56(2)(vii)(b) of the Income Tax Act, 1961.

Detailed Analysis:

Ground No.1 and 3:
These grounds are general in nature and do not require specific adjudication.

Ground No.2:
The primary issue is the addition of Rs. 62,02,000/- under Section 56(2)(vii)(b) of the Income Tax Act, 1961. The assessee declared a total income of Rs. 3,39,420/- for the Assessment Year 2014-15, which was processed under Section 143(1). Subsequently, the assessment was reopened under Section 147, and a notice was issued under Section 148. The assessee purchased immovable property for Rs. 50,00,000/-, while the market value was Rs. 1,12,02,000/-. The Assessing Officer (AO) deemed the difference of Rs. 62,02,000/- as income from other sources under Section 56(2)(vii)(b).

Assessee's Argument:
The assessee contended that the property was purchased as per an agreement dated 19.03.2007, with part payment made in 2009. Due to the seller's reluctance to register the property, the assessee filed a civil suit, which was later settled by arbitration. The assessee argued that Section 56(2)(vii)(b) should not apply.

Assessing Officer's Decision:
The AO was not convinced by the assessee's explanation, as the sale deed was executed on 31.10.2013, and possession was handed over on 31.03.2013. The AO added the difference of Rs. 62,02,000/- to the assessee's income under Section 56(2)(vii)(b).

CIT(A) Decision:
The CIT(A) upheld the AO's order, referencing the Supreme Court's decision in Balbir Singh Miani. The CIT(A) noted that payments were made in cash, and the transaction was treated as a transfer in 2013-14, thus invoking Section 56(2)(vii)(b).

Tribunal's Analysis:
The Tribunal examined the facts, noting that the assessee entered into an agreement on 15.12.2006, with payments made partly in cash and partly by cheque. The vendor failed to honor the agreement, leading to a civil suit. The property was eventually registered following a court order on 31.10.2013.

The Tribunal highlighted the proviso to Section 56(2)(vii)(b), which exempts transactions where an agreement fixing the consideration was made before the amendment's effective date (01.10.2009) and payments were made by modes other than cash. The Tribunal found that the assessee's case met these conditions, as the agreement and payments were made before the amendment.

Conclusion:
The Tribunal concluded that the provisions of Section 56(2)(vii)(b) were not applicable, as the assessee's transaction was covered by the proviso. The orders of the lower authorities were set aside, and the appeal was allowed.

Order:
The appeal of the assessee was allowed, and the difference amount was not taxed as income from other sources under Section 56(2)(vii)(b). The order was pronounced on 30th August 2019.

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