KAVITA CHAURASIA,RANCHI vs. INCOME TAX OFFICER, WARD-1(5), RANCHI, RANCHI

IN THE INCOME TAX APPELLATE TRIBUNAL “RANCHI BENCH, RANCHI VIRTUAL HEARING AT KOLKATA �ी संजय गग�, �या�यक सद�य एवं �ी मनीष बोरड, लेखा सद�य के सम� Before Shri Sanjay Garg, Judicial Member and Dr. Manish Borad, Accountant Member I.T.A No.65/Ran/2022 Assessment year: 2014-15 Kavita Chaurasia…………….............................................................……Appellant Sri Vinay Kumar Jalan, M/s O.P. Jalan and Associates Consultants LLP, 48, Cart Sarai Road, Upper Bazaar, Ranchi-834001. [PAN: AJNPC4629F] vs. ITO, Ward-1(5), Ranchi........................……....................……...…..…..Respondent Appearances by: Shri V. K. Jalan, AR, appeared on behalf of the appellant. Shri P. K. Koley, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : May 25, 2023 Date of pronouncing the order : July 06, 2023 आदेश / ORDER संजय गग�, �या�यक सद�य �वारा / Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 19.07.2022 of the National Faceless Appeal Centre (hereinafter referred to as the ‘CIT(A)’) passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). 2. The assessee in this appeal has taken the following grounds of appeal: “1. Under the facts and circumstances of the case the Ld. CIT(A) erred in confirming the addition of Rs. 8,95,000/- made by the Ld Assessing Officer taking the Stamp Duty Value when the transactions were made on the basis of an Agreement done on 19.01.2011, the payment was made to the builder by cheque on 14.02.2011.

I.T.A No.65/Ran/2022 Assessment year: 2014-15 Kavita Chaurasia When the agreement was prior to the date, then in lines to the already decided principles of law, the Ld CIT(A) should not have confirmed the addition made by the Ld Assessing Officer, considering the Stamp Duty value to be the purchase consideration. The other grounds shall be urged at the time of hearing.” 2. 3. The assessee in this appeal has disputed the addition made/confirmed by the lower authorities of Rs.8,95,000/- u/s 56(2)(vii)(b) of the Act on account of difference between the purchase consideration paid and the value adopted by the stamp duty authority on the purchase of flat. 4. The plea of the assessee has been that the flat was purchased in execution of an agreement between the seller and the assessee dated 19.01.2011. Though, the registration of the sale deed was done on 26.07.2013 when the circle rate of the flat was increased to Rs.23,70,000/-. However, the assessee had purchased the flat at a consideration Rs.14,75,000/- as settled vide agreement of sale dated 19.01.2011. 5. The ld. CIT(A) did not accept the above contention of the assessee observing that the advance payment of Rs.1,00,000/- as mentioned in the said agreement was paid in cash and therefore, as required u/s 56(2)(vii)(b) of the Act, since the payment was not made through cheque, therefore, the aforesaid plea of the assessee was not acceptable. However, the ld. counsel for the assessee has brought our attention to the copy of the sale deed, wherein, the payment schedule has been mentioned. The vendors have confirmed the payment of Rs.14,75,000/- received from assessee vide the following schedule:

S. Date Cash/Cheque Cheque No. Amount No. 1 12.11.10 Cash 101000/-

I.T.A No.65/Ran/2022 Assessment year: 2014-15 Kavita Chaurasia 2 14.02.11 Cheque 573992 48000/- 3 14.02.11 Cheque 575994 66000/- 4 26.03.11 Cheque 575995 125000/- 5 30.03.11 Cheque 575996 75000/- 6 12.12.11 Cash 60000/- 7 12.12.11 Cheque 754357 200000/- 8 16.12.11 Cheque 977989 150000/- 9 03.12.12 Cheque 183009 650000/- Total Amount 14,75,000/- 6. A perusal of the above schedule of payment would reveal that though the assessee had paid the initial amount of Rs.101000/- in cash on 12.11.10 however, on 14.02.11, the payment of Rs.48000/- and Rs.66000/- were paid through two separate cheques. Even, thereafter every payment was also made through cheque as noted above. The agreement to sale as mentioned in the sale deed, itself, is dated 05.01.2011. The sale deed was executed on 26.07.2013. As per provisions of section 56(2)(vii)(b) of the Act, if an individual or HUF receives any immovable property without consideration, the stamp duty of which exceeds 50,000/- rupees, or for a consideration which is less than the stamp duty value of the property by an amount exceeding 50,000/- rupees, the stamp duty value of such property or the difference between the actual consideration received and the stamp duty value, as the case may be, is to be treated as deemed income of the assessee. However, as per the 1st Proviso to the said section, where, an agreement to sale has been entered before the transfer of the property and the amount has been fixed in the said agreement to sale, the stamp duty value on the date of agreement may be taken for the purpose of aforesaid clause. However, as per the 2nd Proviso, the 1st Proviso shall apply only in case where the amount of consideration referred to the agreement of sale or of part, thereof, has been paid by any mode other than cash on or before the date of such agreement to sale. In this case, the agreement for

I.T.A No.65/Ran/2022 Assessment year: 2014-15 Kavita Chaurasia sale was executed on 05.01.2011. Though the initial payment was made before the date of agreement i.e. 12.11.2010 in cash. However, the second payment as per the schedule was made on 14.02.2011 itself i.e. one month from the date of execution of the agreement. Thereafter, the other payments, as mentioned above, were made through cheque but all payments were made much before the date of execution of the sale deed. Though the payment through cheque by virtue of agreement dated 05.01.2011 was made on 14.02.2011 but the same was made within a short span of agreement followed by subsequent payment in the month of March 2011 and December 2011 through cheque. The object of the 2nd Proviso is to prevent the parties to claim lesser sale consideration than the prevalent stamp duty on the basis of any bogus back-dated agreement for sale. The payment of consideration through cheque or any part of sale consideration along with agreement has been required, so as to ensure that the agreement relied upon a genuine agreement for purpose of transfer of immovable property. The facts and circumstances in this case reveal beyond doubt that the sale deed executed in the month of July 2013 was as per the terms and conditions settled vide agreement dated 05.01.2011 and as per the terms of the agreement, the part of the sale consideration was paid on 14.02.11 by way of cheque and further major amount was paid in the year of 2011 itself. It has been held time and again that each case has its own facts and circumstances which have to be considered while applying the provisions of law so as to achieve the purpose of the relevant enactment. Considering the peculiar facts of this case, we are of the view that the case of the falls within the exception as provided by 1st and 2nd Proviso to section 56(2)(vii)(b) of the Act. Our above views are also fortified by the decision of the Coordinate Visakhapatnam Bench of the Tribunal in the case of DSN Malleswara Rao vs. ITO reported in 2019-TIOL-1853-ITAT-VISAG. In view of our

I.T.A No.65/Ran/2022 Assessment year: 2014-15 Kavita Chaurasia above observation, the additions made by the lower authorities are ordered to be deleted. Our findings in this case are based on the peculiar facts and circumstances of the case and will not hold binding precedent in general. 7. In the result, the appeal of the assessee stands allowed. Kolkata, the 6th July, 2023. Sd/- Sd/- [डॉ�टर मनीष बोरड /Dr. Manish Borad] [संजय गग� /Sanjay Garg] लेखा सद�य /Accountant Member �या�यक सद�य /Judicial Member

Dated: 06.07.2023. RS Copy of the order forwarded to: 1. Kavita Chaurasia 2. ITO, Ward-1(5), Ranchi 3. CIT(A)- 4. CIT- , 5. CIT(DR),

//True copy// By order Assistant Registrar, Kolkata Benches