Property buyer cannot be taxed under Section 50C which applies only to sellers

ITAT Ahmedabad allowed the assessee's appeal, cancelling additions under sections 50C, 56(2)(vii)(b), and 69C. The tribunal held that section 50C applies only to sellers, not buyers of property, making it inapplicable. For section 56(2)(vii)(b), the amendment covering inadequate consideration was effective from A.Y. 2014-15, not applicable to A.Y. 2012-13. The property was purchased with consideration, not acquired without consideration. Section 69C addition was improper as it should relate to actual investment, not jantri value, and no show cause notice was issued. The AO's additions were unsustainable.

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Issues involved:
The judgment involves two appeals filed by different assesses against separate orders of the National Faceless Appeal Centre (NFAC), Delhi, both for the Assessment Year 2012-13, regarding the treatment of property acquisition and valuation under Sections 50C and 56(2)(vii)(b) of the Income Tax Act, 1961.

Case of Pooja Dipen Joshi:
The appellant's case involved a property purchase jointly with 8 persons, with a jantri value higher than the transfer document value. The Assessing Officer (AO) treated the difference as 'income from other sources' under Section 50C. The appellant challenged this addition, arguing that Section 50C applies to sellers, not buyers, and Section 56(2)(vii)(b) does not apply as the property was not acquired without consideration. The appellant also contended that the amendment to Section 56(2)(vii)(b) was not retrospective to AY 2012-13. The Tribunal agreed, holding that the additions under both sections were unjustified due to incorrect application and lack of compliance.

Case of Ashokkumar C. Joshi:
This case mirrored Pooja Dipen Joshi's situation, with the co-owner appealing against the addition under Section 50C. The Tribunal found the same issues present, with the AO's treatment under Section 50C not applicable and the amendment to Section 56(2)(vii)(b) not retrospective to AY 2012-13. The addition was deemed unjustified and deleted.

Conclusion:
Both appeals were allowed, as the additions under Section 50C and Section 56(2)(vii)(b) were found to be incorrect and not applicable to the assesses' situations. The Tribunal canceled the orders of the CIT(A) and ruled in favor of the assesses in both cases.

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