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Income Tax Appellate Tribunal, NAGPUR BENCH : NAGPUR
Before: SHRI SATBEER SINGH GODARA & SHRI DR. DIPAK P. RIPOTE
[THROUGH VIRTUAL HEARING AT PUNE] BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER I.T.A.No.108/NAG./2019 Assessment Year 2015-2016 The Income Tax Officer, Shri Jitendra Pransingh Ward – 5, Aaykar Bhavan, Thakur, Pannalal Ambarpeth, Amravati. Bagicha, Galli No.3, vs. PIN – 444 601. Bhuteshwar Chowk, Maharashtra Amravati – 444 606. PAN AEVPT2236C (Appellant) (Respondent) For Revenue : Shri Abhay Y. Marathe, Sr. DR For Assessee : Shri K.P. Dewani, Advocate Date of Hearing : 22.02.2024 Date of Pronouncement : 29.02.2024 ORDER PER SATBEER SINGH GODARA, J.M. This Revenue’s appeal for assessment year 2015-2016, arise against the CIT(A)-1, Nagpur’s order No.CIT(A)-1/ 183/2017- 18, dated 15.02.2019, involving proceedings u/sec.143(3) of the Income Tax Act, 1961 (in short "the Act").
Heard Both the parties at length. Case file perused.
The Revenue pleads the following substantive grounds in the instant appeal:
“1. On the facts and circumstances of the case and in law, whether the Ld.CIT(Appeals)’s order is contrary to the Law and facts of the case.
2 ITA.No.108/NAG./2019 2. On the facts and circumstances of the case and in law, the Ld.CIT(Appeals) has failed to consider the provisions of sec.56(2)(vii)(b) w.e.f.01.10.2009, when the sale consideration is less than the stamp duty value of the property by an amount of exceeding Rs.50,000/-, the stamp duty value of such property as exceeds such consideration shall be chargeable to Income Tax, which is squarely applicable in the instant case.
On the facts and circumstances of the case and in law, the Ld.CIT(Appeals) has failed to appreciate the decision of the Hon’ble Supreme Court in the case of Sanjivlal Vs. CIT [(365 ITR 389 (SC)] wherein it was held that once an agreement to sell an immovable property is executed in favour of the buyer, the said buyer gets a right to get the property transferred in his favour by filing a suit for specific performance.
On the facts and circumstances of the case and in law, the Ld.CIT(Appeals) was justified in deleting the addition made by A.O. of Rs.2,84,72,000/- under the provisions of Sec.56(2)(vii)(b) by accepting the objections raised by the assssee but not referring the property for valuation or remanding the matter back to the AO for valuation of property whose purchase consideration has been reflected by the assessee at a price below the Stamp Valuation.
For these and other grounds that may be adduced at the time of hearing, it is prayed that the Order of the 3 ITA.No.108/NAG./2019 Ld.CIT(Appeals) be set aside and that the Assessing Officer be restored.
Any other ground which may be raised with the permission of Hon’ble Tribunal.”
3. Both the learned representatives next invited our attention to the CIT(A)’s detailed discussion reversing the assessment findings making the impugned section 56(2)(viib) addition of Rs.2,84,72,000/- as under :
4 ITA.No.108/NAG./2019 5 ITA.No.108/NAG./2019 6 ITA.No.108/NAG./2019 7 ITA.No.108/NAG./2019 8 ITA.No.108/NAG./2019 This leaves the Revenue aggrieved.
4. Mr. Marathe vehemently argued during the course of hearing that the CIT(A)’s herein has erred in law and on facts in deleting the impugned section 56(2)(vii)(b) addition made by the Assessing Officer thereby wrongly granting the benefit of 1st and 2nd proviso(s) thereunder to the assessee. He sought to buttress the point that the above 2nd proviso to section 56(2)(vii)(b) applies “only in case where the amount of consideration . . . . . . . . . . , has been paid by any mode other than cash on or before the date of agreement for the transfer of such immovable property”. The Revenue’s vehement contention accordingly is that once the assessee has not proved to have paid the whole or even a part of the consideration herein other than by cash, he is not entitled to be granted any relief going by the principle of stricter interpretation as per Commissioner of Customs (Imports, Mumbai ) Vs. Dilip Kumar and Co. and Ors (2018) 9 SCC 1 (SC) (FB).
9 ITA.No.108/NAG./2019 5. The assessee has placed strong reliance on the CIT(A)’s detailed discussion deleting the foregoing impugned addition.
6. We find no merit in the Revenue’s vehement contentions seeking to revive the impugned addition. We wish to make it clear that the Revenue is indeed very fair in not disputing all the foregoing facts taken note by the CIT(A) in his lower appellate discussion, i.e., the date of agreement between the assessee (vendee) and the (vendor), cash payments, delivery of possession and all other subsequent proceedings culminating in sale deed of the capital asset executed in the relevant previous year at the behest of learned Executing Court’s directions. All these facts, and more particularly, the learned civil court’s corresponding detailed discussion in its judgment and decree in special civil suit No.326/2013 have categorically proved that the assessee had indeed entered into an agreement dated 29-02-2008, which duly formed essence of the contract therein and the consequential sale deed was to be executed in the year 2009. There is further no dispute between the parties that the assessee has been further found as always ready and willing to perform his part of the agreement by the learned Civil Court. It is only in light of these facts that we hold that once the learned Civil Court has already appreciated the entire evidence whilst deciding the issue of valid agreement in the assessee’s favour, the same are binding on income-tax authorities. We are of the view the assessee’s agreement dates back to the year 2008 and the sale deed had to be executed in 10 ITA.No.108/NAG./2019 the year 2009 in very terms, the mere fact that the consequential transfer took place in execution proceedings in the relevant previous year would not attract section 56(2)(vii) of the Act in light of CIT Vs. Shimbhu Mehra (2016) taxman 0561 (Allahabad).
The Revenue at this stage sought to draw the distinction pinpointing the fact that the above judicial precedent dealt with the issue of capital gains recomputation in light of section 50C of the Act. We find no merit in the Revenue’s instant stand as well since the provisions of section 50C of the Act (in case of the vendor of the capital asset concerned) applicable mutatis mutandis in section 56(2)(vii)(b) in the concerned vendee’s case. We accordingly conclude in these peculiar facts and circumstances that the CIT(A) has rightly deleted the impugned section 56(2)(vii)(b) addition of Rs.2,84,72,000/-. The Revenue fails in its instant sole substantive grievance.
This Revenue’s appeal is dismissed in above terms.
Order pronounced in the open Court on 29.02.2024.