TaxTMI 
TaxTMI 
2023 (4) TMI 145
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.... of the Act which was beyond the purview of the Ld. AO as the case was selected for limited scrutiny only with the reason being 'purchase of property'. 3. From the perusal of the additional ground taken by the assessee, we note that it is more in the nature of peripheral argument on the ground taken by the assessee in the Memo of Appeal. Thus, we do not find appropriate to give a separate finding on this additional ground and is not adjudicated upon. 4. Brief facts are that assessee had filed her return of income on 20.03.2016 reporting a total income of Rs.2,69,870/-. From the perusal of notice issued u/s. 143(2) of the Act, it is noted that case of the assessee was selected for limited scrutiny by identification of the issue, "Purchase of Property". In the course of assessment proceedings, assessee had replied to the AO vide letter dated 04.07.2017 wherein she had furnished all the details and explanations in respect of issue of 'purchase of property'. The same is reproduced as under: 4.1. Ld. AO completed the assessment by accepting the returned income. Subsequently, Ld. Pr. CIT called for the assessment records and after perusing the same, found that during the year un....
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....e project "Prasad Exotica" for which an agreement for sale was entered with the developer on 30.01.2008 and the conveyance deed was registered on 02.12.2014. For these details, assessee had also furnished the source of investment in the said property which is extracted below : 5.1. From the above details of investment made by the assessee it was pointed that three payments on 12.07.2006, 26.08.2006 and 29.08.2006 totalling to Rs. 5 lacs were paid by cheque from the capital account of the partnership firm M/s. Sethi Enterprise, of which the assessee is a partner. According to the assessee, these payments were made prior to the date of agreement for sale which was entered into between the developer and the assessee on 30.01.2008. It was submitted that although registry of the conveyance deed for the property was executed in the FY 2014-15 but the agreement to purchase the said property was executed in FY 2007-08 for which a part payment was made by cheque as stated above, therefore, provisions of section 56(2)(vii)(b) of the Act are not applicable in the present case of the assessee. 6. From the decision drawn by Ld. Pr. CIT, we note that there are twofold contentions which hav....
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....t inserted by Finance (No.2) Act, 2009 w.e.f. 01.10.2009 is as under: "(b) any immovable property, without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property." 7.1. Subsequently, sub-clause (b) was substituted by the Finance Act, 2013 w.e.f. 01.04.2014 and the amended provision is as under: "Income from other sources. 56.(1) ..... (2) In particular, and without prejudice to the generality of the provisions of sub-section(1), the following incomes, shall be chargeable to income-tax under the head "Income from other sources", namely :- (i)..... ...... (vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009 [but before the 1st day of April, 2017],- (a) ....... (b) any immovable property,- (i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; (ii) for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupee....
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....e amended law, specifically made applicable from A.Y. 2014-15 that any receipt of the immoveable property with inadequate consideration has been subjected to the provisions of Sec. 56(2)(vii)(b) but not before that. Hence, applicability of the said provision in such cases, could not be insisted in the assessment years prior to a A.Y. 2014-15. Having said this, in this case, there was a valid and lawful agreement entered by the parties long back in A.Y. 2008-09 only, when the subject property was transferred and substantial obligations were discharged. The law contained in Section 56(2)(vii)(b) as stood at that point of time, did not contemplate a situation of a receipt of property by the buyer without inadequate consideration. Hence, we are of considered view that ld. Pr.CIT erred in applying the said provision. Because of the mere fact that the flat was registered in the year 2014 falling in A.Y. 2015-16, the amended provision of Section 56(2)(vii)(b)(ii) cannot be applied. 7.4. Hence, we are not in agreement with the view taken by the ld. Pr.CIT holding the applicability of Section 56(2)(vii)(b)(ii) in the facts and circumstances of the case and therefore we hold that the asse....