TaxTMI 
TaxTMI 
TaxTMI 
2023 (4) TMI 574
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....diction under section 263 of the Income Tax Act as the impugned assessment order is neither erroneous nor prejudicial to the interest of revenue. 3. That the Ld. Pr. CIT further erred in law and facts in not appreciating the detailed submission of the assessee dated 23rd December, 2019 in a right perspective. 4. That the Ld. Pr. CIT has also erred in law in setting aside the whole assessment order and directing the assessing officer to redo the assessment de- novo. 5. That the appellant seeks leave to add, amend, alter, abandon or substitute any of the above grounds during the hearing of the appeal." 3. At the outset itself, it was stated that the issue on which the revisionary power was exercised By the Ld. PCIT was pertaining to the noninvocation by the Assessing Officer of Section 56(2)(vii)(b) of the Act to the transaction of immovable property, being land, purchased by the assessee as a co-owner along with other two persons. The contention being that the property was purchased for a sum far below its stamp duty value and thus warranted the addition to be made to the income of the assessee of the amount short paid as compared to its stamp duty value, as per the provi....
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....ng to the above, learned Counsel for the assessee stated that the assessee had purchased an immovable property alongwith with two other coowners, being 1/3rd owner of the same, and was found by the Ld. PCIT to have paid price which was far less than its Stamp Duty Value. The assessee's share of the purchase price paid being Rs.19,67,000/-noted by the Ld. PCIT, while his share of the Stamp Duty Value of the property being Rs.59,79,590/-. The difference of the two, i.e. Rs.34,12,590/-, being in excess of Rs.50,000/-, as per the Ld. PCIT was liable to be taxed in the hands of the assessee as per the provisions of Section 56(2)(vii)(b) of the Act and the Assessing Officer having not examined this issue and thus not invoked the provisions of Section 56(2)(vii)(b) of the Act while framing the assessment, the Ld. PCIT found the assessment order passed to be erroneous so as to cause prejudice to the Revenue and thus assumed jurisdiction under Section 263 of the Act. 6. Learned Counsel for the assessee contended that his arguments against the order framed under Section 263 of the Act were as under:- i) that the issue of purchase of property by the assessee had been duly inquired during t....
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....ed the copies of the agreements or deeds entered into. No other question or query was raised by the Assessing Officer. No query relating to the invocation of Section 56(2)(vii)(b) of the Act was raised by the Assessing Officer in the present case. Therefore, in the facts of the present case, it cannot be said that the Assessing Officer had examined the issue of purchase of immoveable property and taken a plausible view by making no addition u/s 56(2)(vii)(b) of the Act when the issue was not even examined by the AO. Therefore this contention of the learned Counsel for the assessee is rejected. 11. Taking up the next contention of learned Counsel for the assessee that even on merits no addition was warranted as per Section 56(2)(vii)(b) of the Act, the argument of the learned Counsel for the assessee was that, the assessee had purchased this property through a confirming agent who in turn had entered into an agreement with the vendors of the property in 2008 and had made payment by cheque to the said parties and, therefore, as per the second proviso to Section 56(2)(vii)(b) of the Act, the stamp duty value as on 2008 was to be considered for the purposes of Section 56(2)(vii)(b) of....
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....(vii)(b) of the Act, which requires the stamp duty value of the date of agreement to sale to be taken in place of the stamp duty value of the actual date of registration of sale only in the circumstance where the two dates are not the same and the consideration or a part thereof has been paid by modes other than cash on the date of agreement for transfer or prior to that. Which means that what the first and second proviso to Section 56(2)(vii)(b) of the Act envisage is a circumstance where the transaction of purchase of a property entered into between two persons by way of an agreement to sell is delayed to be registered, then in all fairness it gives the benefit of the fair market value as on the date of the agreement of sale to be considered for the purposes of determining whether the assessee had derived any benefit by acquiring the property at a lesser value than its stamp duty value. This is the sum and substance of the first and second proviso to Section 56(2)(vii)(b) of the Act. In the facts of the present case, these two provisos are of no help to the assessee for the reason that firstly the agreement to sell dated 11.02.2008 was not entered into between the assessee and th....
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....mount 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 the agreement may be taken for the purposes of this section. However, the second proviso to the Section 56(2)(vii)(b) stipulates that the aforesaid first proviso shall apply only in a case where the amount of consideration, or a part thereof, has been paid on or before the date of the agreement for the transfer of such immovable property. It is pertinent to mention here that the aforesaid proviso were inserted by Finance Act, 2013 with effect from 01.04.2014. For better appreciation of the facts, the relevant portion of the proviso is reproduced hereunder :- "(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) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum; (b) any immovable property,- (i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty ....
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....ed in ITA No. 5498/MUM/2018 (ITAT Mumbai), it is observed that the Hon'ble Tribunal has confirmed the addition made u/s. 56(2)(vii)(b) of the Act dismissing the appeal of the assessee. Same is with decision in the case of Shri Trilok Chand Sain vide ITA No. 449/JP/2018. Hence these decisions are of no consequence with reference to the present matter. iii.. The assessee had also relied on the judgement in the case of Shri Hari Om Garg in I.T.A. No.342/Agra/2017. In the said case, the dispute is in respect of making reference to the Valuation Officer in the event of non agreement between the assessee and the AO with respect to valuation of immovable property. That being so, the findings in the above case are not applicable here." 13. Even otherwise, the learned Counsel for the assessee was asked at Bar as to whether the assessee at any point of time had justified that the stamp duty rate of 2008 warranted no addition to be made in the hands of the assessee, to which the learned Counsel for the assessee replied in the negative. 14. Considering the above, as per law and even on merits, the assessee has been unable to justify his contention that no addition was warranted in th....
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.... his order passed under Section 263 of the Act. Therefore, his order is very clear requiring the Assessing Officer to examine only the issue relating to the applicability of Section 56(2)(vii)(b) of the Act in the facts of the present case. Even as per the facts noted by the Ld. PCIT in his order, the assessment in the present case was a limited scrutiny assessment for the purpose of examining the issue of cash deposits and purchase of property. Vis-à-vis the issue of purchase of property, the Ld. PCIT found the assessment order to be erroneous for the reason that the Assessing Officer having not examined the applicability and invocation of the provisions of Section 56(2)(vii)(b) of the Act. Therefore, it cannot be said that Ld. PCIT had directed the entire assessment to be framed afresh or that the entire assessment was open before the Assessing Officer even in the restored proceedings. The Assessing Officer, in any case, could not have exceeded the limited brief being a limited scrutiny assessment and, as we have noted, the order of the Ld. PCIT was very clear with regard to examination of the issue of invocation of Section 56(2)(vii)(b) of the Act. Therefore, this argumen....