TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1042
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....0. b. The pre-amended provisions of Section 56(2)(vii) (b) of the Income Tax Act, covers only situation where an individual or HUF receives from any person any immovable property without any consideration. The aforesaid provisions was however substituted by Finance Act, 2013 and made applicable to AY 2014-15 onwards. As per the amended provisions, the scope of substituted provision was expanded to cover purchase of immovable property for inadequate consideration as well. c. In our case, the agreement for purchase is dated ______________and the agreement is registered along with stamp duty of Rs. ___________ and on dated_____________________ d. The Appellant would like to highlight the below ITAT case laws where the ITAT confirmed the inapplicability of Section 56(2)(vii)(b) to transfers that took place before the A.Y. 2014- 15. The ITAT ruled in favor of the assessee, deleting the addition made under Section 56(2)(vii)(b) of the Income Tax Act. i. Bajrang Lal Naredi Vs ITO 2018 (ITAT Ranchi) ii. ii. Asha Vijay Vs ITO 2023 (ITAT Kolkata e. The Appellant prays that any penalty to be levied against above addition also to be deleted. f. The Appellant craves leave to add....
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....der under Section 143(3) r.w.s. 147 of the Act was passed on 19/07/2019. 2. However, during the course of the proceedings before Assessing Officer and before CIT(Appeals) certain legal grounds were not raised by the Authorised Representative. Therefore, following grounds are raised before this Hon'ble Court. On the facts and in law, the Ld. Assessing Officer erred by failing to provide reasons of re-opening of the assessment during the course of the Assessment Proceedings. 2. On the facts and in law, the Ld. Assessing Officer erred passing the impugned Assessment Order in grave violation of settled principles of law and procedure stated by the Hon'ble Apex Court in the case of GKN Driveshafts (India) Ltd. V/s. ITO [2003] 259 ITR 19 (SC). Without prejudice to above, on the facts and in law, the additions made on the issues not forming part of reasons recorded shall be bad in law, if the addition made on the issue for which the reasons were recorded and notice under Section 148 was issued is deleted by this Hon'ble Court on merits of the case. On the facts and in law, the Ld. Assessing Officer erred in issuing Notice under Section 148 of the Act. As the said Not....
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....f the Ld.AO in issuance of notice U/s 148 of the Act and completing the assessment under section 143(3) read with section 147 of the Act. 4. The Ld.AR filed a paper book containing pages 1 to 166 which is kept on the record and argued the additional ground related to assumption of jurisdiction by the Ld.AO for completing the assessment under section 143(3) read with section 147 of the Act. The Ld.AR stated that the assessment was completed without providing the recorded reasons to assessee, in violation of order of Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd vs ITO (2003) 259 ITR 19 (SC). Further, the recorded reasons are bad in law as the addition on account of reasons recorded in the order was not added while completing the assessment. Admittedly, there is no fresh tangible material on record for formation of belief. Considering this, the Ld.AR prayed for acceptance of additional grounds, now sought to be raised before us. 5. The Ld.DR argued and filed a written submission in detail, related to assumption of jurisdiction by the Ld.AO for completion of assessment under section 147 of the Act. The relevant submission of the Ld.DR is extracted below:- "Chron....
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....19 was digitally signed by the same officer. As for the additional ground stating that there was no tangible material to form a belief that Income had escaped assessment, this claim is incorrect. The reopening was based on information provided by the erstwhile ITO (Investigation), Unit-3, which constituted valid grounds for reassessment. In light of the above, it is respectfully submitted that the additional grounds raised by the assessee lack merit." 6. We find that the assessee has not asked for recorded reason from the Ld. Assessing Officer during the assessment proceedings, after filing of the return of income in response to the notice under section 148 of the Act. The Ld.AR was allowed a reasonable opportunity for submitting the same, but he conceded that the said letter was never been filed for asking the recorded reasons from the Assessing Officer. Accordingly, we note that the ruling of the Hon'ble Supreme Court in GKN Driveshafts (India) Ltd vs ITO (supra) was not followed properly by the assessee at the assessment stage. In case of absence of tangible material, it is clear from the recorded reasons that the Ld.AO had issued the notice under section 148 on the basis o....
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.... on this issue is set aside. Accordingly, ground nos. 1 & 2 of the assessee's appeal are allowed. 9. Ground nos. 3 & 4 are not pressed; hence dismissed. 10. Ground no. 5 related to deemed rent amounting to Rs. 1,02,780/- was added back with the total income of the assessee. In assessment proceedings, the Ld. AO observed that the assessee was residing in Zam Zam Flat and the assessee was holding two properties named Juveria Flat and Evergreen Flat and the assessee had only offered the house property income of Rs. 45,000/-. The Ld. AO had not accepted the assessee's declaration of house property income and recalculated the deemed rent @8% on the value of the flat as declared in the financial report of the assessee which comes to R.1,02,780/-. The said amount was added back as deemed rent to the total income of the assessee. 11. The Ld.DR in argument only relied on the order of the revenue authorities. 12. In our considered view, we find that the Ld. AO has estimated 8% of the value of the said properties as deemed rental income. The Ld. AR has not furnished any contrary valuation or evidence to dispute the basis adopted by the Ld. AO. We are of the view that the determination of....