TaxTMI 
TaxTMI 
2021 (9) TMI 766
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....a difference of Rs. 16,42,994/- (i.e. 50% of the total difference of 32,85,987/-) between the declared sale consideration and the stamp duty. The assumption of jurisdiction u/s 263 being contrary to the provisions of law and facts on record, hence, the proceedings initiated u/s 263 of the Act and the impugned order dated 27.03.2019 deserves to be quashed. 2.2 The ld. Pr. CIT 2 JAIPUR, Jaipur erred in law as well as on the facts of the case in wrongly setting aside the assessment order date 21.12.2017 despite there being complete application of mind by the AO on the subjected issues and it was nothing but a case of change of opinion, based on which, assumption of jurisdiction u/s 263 is not permissible. The impugned order dt. 28.02.2020 therefore, lacks valid jurisdiction u/s 263 of the Act and hence, the same kindly be quashed. Alternatively and without prejudice to the above 3.1 The ld. Pr. CIT 2, JAIPUR erred in law as well on the facts of the case in applying the provisions of sec. 56(2)(vii)(b)(ii), which is completely contrary to the provisions of the law and the facts available on the record, hence the impugned finding that the assessment order passed u/s 143(3) 21.12.2....
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.... was to be treated as income from other sources. However, the AO failed to invoke the S.56(2)(vii)(b) during assessment and hence non-invoking the provision of S.56(2)(vii)(b) rendered the assessment order erroneous in so far as it is prejudicial to the interest of the revenue. Accordingly, invoking revisionary powers u/s 263 of the Act, issued show cause notice dated 27.01.2020, in response to which, the assessee filed detailed written submissions on 10.02.2020 and 11.02.2020, however, the ld. PCIT held that the assessment order dated 21.12.2017 as erroneous & prejudicial to the interest of the Revenue by observing as under: "5. I have gone through the submissions filed by the AR, the assessment order and the case records in this case. It is seen that the return of income for A.Y. 2015-16 was e-filed at a total income of Rs. 27,38,450/- on 26.08.2015. The case was selected for limited scrutiny through CASS on the reasons of "Purchase of property". The assessment was completed on 21.12.2017 accepting the returned income. Assesse in the year under reference had purchased an immovable property, jointly with her share as 50%, for a consideration of Rs. 70,26,233/-. It is further see....
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....n agreement to sale dated 15.09.2013 with the builder at the time when the agreement for transfer of the said property was entered into by Sh. Nav Naresh Jhawar with Sh. Sanjay Kumar Gupta. 6. In view of the above, I hold that the order passed by the AO on 21.12.2017 was erroneous and prejudicial to the interest of the revenue. The order passed by the AO thus deserves to be set-aside. The AO shall complete the assessment a fresh after giving opportunity to the assessee. 4. Now the assessee is in appeal before the ITAT against the impugned order passed by the ld. PCIT on the grounds mentioned above. The ld AR appearing on behalf of the assessee has reiterated the same arguments as were raised before the ld. Pr.CIT and has also relied upon the written submissions filed by the assessee before us and the contents of the same are reproduced below: "1. Legal Position on Sec.263 - Judicial Guideline: Before proceeding, we may submit as regards the judicial guideline, in the light of which, the facts of this case are to be appreciated. 1.1 The pre-requisites to the exercise of jurisdiction by the Commissioner u/s 263, is that the order of the Assessing Officer is established to be e....
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....spectively in A.Y. 2010-11. 2.2 It is submitted that the assesse applied for purchase of Flat No.201 on 23.09.2006 (as mentioned in allotment letter) and paid Rs. 7,26,500/- (Rs. 6,63,000/- through Ch. No. 489569 and Rs. 63,500/- through Ch. No. 489570) from saving A/c No. 11023 of Indian Overseas Bank on 03.10.2006(PB 40). The seller company M/s SDB Infrastructure Pvt. Ltd. (erstwhile Som Datt Builders Pvt. Ltd.) issued allotment letter on 06.03.2009 (A.Y. 2010-11) to the assesse (PB 8-14). On 11.11.2009, the assesse agreed to purchase the property measuring 2150 Sq. ft at the rate of 3,050/- per Sq. ft. for a sum of Rs. 65,57,500/-(Rs. 70,26,233/- including registration, stamp and maintenance) as per terms and condition mentioned in the allotment letter dated 06.03.2009. (PB 8-14). 2.3 Pertinently, the assesse paid Rs. 45,26,233/- through various cheques as mentioned in the registered sale deed before 05.04.2008 (PB 23). Thus, the maximum purchase consideration was paid at the time of agreement to purchase itself in F.Y. 2009-10 (A.Y. 2010-11) and the purchase was de facto completed except for the formality of registration only. The balance amount of Rs. 20,31,267/- (out of t....
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....ision of the Indian Contract Act, 1872. This way, this was a lawful agreement binding upon the parties entered into on 11.11.2009 whereby, the assesse got a right and interest in Flat-201, more so, when the substantial part of the consideration being Rs. 45,26,233/- (Out of Rs. 65,57,500/-), was already paid before 05.04.2008 (as per Table PB-23) i.e. well before the said date of execution of allotment letter dated 11.11.2009. 4.1 Allotment Letter - not provisional : The ld. Pr. CIT however, alleged that such allotment letter dated 06.03.2009 was a provisional allotment and was subjected to further changes but a perusal of relevant clauses at Pg-1 (PB 9) shows that the provisional nature of allotment was only because of some unexpected happenings like some changes which may be by the Authority or by the Architect or by the Builder which may result into increase and decrease in the area or where there is absolute deletion of the apartment from the sanction plan. But for all intended and practical purposes it was a complete agreement between the parties which was even duly acted upon by both of them. Kindly refer Hansmukh N. Gala (infra). He relied on the following case laws: ....
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....d that as the assesse has purchased the flat the provisions of section 56(2)(vii)(b)(ii) are not applicable. It is further submitted that where the date of agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of agreement may be taken. He has also placed reliance on the judgment of Hon'ble ITAT in the case of Sanjay Kumar Gupta vs. ACIT, Jaipur. The AR has pleaded that the order passed by DCIT, Circle - 6, Jaipur was not erroneous and prejudicial to interests of revenue. 5.2 Therefore, the SDV as on date of agreement (06.03.2009 / 11.11.2009) must have been taken for the purpose of invoking S.56(2)(vii)(b). The SDV on the date of agreement of was almost the same (agreed consideration). Since there is no difference between the SDV and the purchase consideration. There was no scope of making any addition. The ld. AR relied on the following case laws: i. Bajranglal Naredi vs. ITO (2020) 203 TTJ 925 (Ranchi) ii. ACIT vs. Anala Anjibabu (2020) 207 TTJ 239 (Visakha) iii. Sanjay Kumar Gupta vs. JCIT in ITA no. 227/JP/2018 order dated 05.10.2018 iv. Hansmukh N. Gala ....
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.... assesse filed complete documents w.r.t. the purchase of Flat-201 i.e. Registered Purchase Deed dated 09.12.2014, Allotment Letter dated 06.03.2009, Bank Account etc. which was required by the AO time to time through the A/R, which aspect was duly verified and examined by the AO and it is only after considering all the relevant aspects, the AO decided not to invoke S.56 (2)(vii)(b) of the Act. Thus, the AO did form an opinion and it was nothing but a case of substitution of opinion by the ld. Pr. CIT. From the factual and legal submission made hereinabove, it is evident that the AO has taken a possible view. Merely because the order is brief and cryptic, that does not render it to be erroneous and prejudicial to the interests of revenue. The ld. Pr. CIT has no jurisdiction u/s 263 to revise the order of the AO simply because he has not made elaborate discussion in the order with regard to the reason mentioned in the CASS. He relied on the decision in the case of Ved Prakash Contractors vs. CIT (2016) 175 TTJ_UO 19 (Chd. Hence, there was no error committed by the AO therefore, the subjected assessment was beyond the scope of S.263 and deserves to be quashed." 5. On the other ha....
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....tment letter signed by the assessee as a token of acceptance. It is also undisputed that prior to the registration of the transaction on 09.12.2014, the assessee had paid Rs. 45,26,233/- against the total agreed sale consideration of Rs. 65,57,500/-. A perusal of the allotment letter clearly shows that it contains all the substantive terms and conditions which create the respective rights and obligations of the parties i.e. the buyer (assessee) and the seller (the builder) and bind the respective parties. The allotment letter provided detailed specification of the property, its identification and terms of the payment, providing possession of the subjected property in the stipulated period and many more. Evidently the seller (builder) has agreed to sale and the allottee buyer (assessee) has agreed to purchase the flat for an agreed price mentioned in the allotment letter. What is important is to gather the intention of the parties and not to go by the nomenclature. Thus, there being offer and acceptance by the competent parties for a lawful purpose with their free consent, we find that all the attributes of a lawful agreement are available as per provisions of the Indian Contract Ac....
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....bed period of two years for purchase of flat payment of which was linked to stage of construction, assessee's claim for deduction under section 54 was to be allowed - Held, yes [In favour of assessee]" In the lights of the above decision and on the appreciation of the facts and the evidences available on material, we are convinced that the parties had already entered into an agreement by way of the allotment letter in on 11.11.2009 falling in A.Y. 2010-11. 8. Now we come to the provisions of S. 56(2)(vii), which stood prior to the amendment. "((b) any immovable property,- (i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; The Finance Act, 2013 inserted clause (ii) in S. 56(2)(vii)(b) reading as under: "(ii) for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration" The pre amended law evidently did not cover a situation where an immovable property was received by an individual or HUF for a consideration, whether adequate or inadequate, whether consideration was l....