HEMANT KUMAR VERMA,LOHARDAGA vs. ITO,WARD-2(4),RANCHI, RANCHI

Per Bench This is an appeal filed by the assessee against the order of the Commissioner of Income Tax(Appeals)- Ranchi dated 23.5.2018 for the assessment year 2014-15. 2. The sole effective ground taken by the assessee in this appeal is that the CIT(A) was not justified in confirming the addition of Rs.18,76,000/-

under section 56(2)(vii)(b) of the Act.

available in the record of the Tribunal, inter alia, assessment order as well

as the first appellate order.

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immovable properties, wherein, the Assessing Officer found difference in the purchase price and stamp duty valuation, as under:

Sl.No. Description of Date of Purchase Stamp Difference the immovable registration price duty value property

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No.2A, he submitted that the date of payment was 4.12.2013 and registration was made on 24.2.2014. He submitted that the amendment to Section 56(2)(vii)(b)(ii) was made w.e.f 1.4.2014 and, therefore, this section will be applicable if the immovable property is transferred and transaction is completed on or after 1.4.2014 in assessment year 2014-15. 8. Ld A.R. produced a decision of ITAT Ranchi in the case of Sanjay

Kumar Jain vs ITO in ITA No.212/Ran/2018 for A.Y. 2014-15 and submitted

that the case of the assessee is identical to this case, therefore, squarely

covered in favour of the assessee.

order. He submitted that payments and execution of sale deed in the case

of flat at Ram Sakhi Apartment, Misirgonda, Ranchi has been made during

financial year 2013-14 pertaining to assessment year 2014-15, thus addition

of Rs.40,000/- is sustainable.

of Sanjay Kumar Jain (supra), we find that the Tribunal, on the similar facts,

has observed as under:

P a g e 3 | 7 “7. On careful consideration of the above rival submissions of both the sides, I may point out that undisputedly and admittedly the AO applied first proviso to sub-clause(b) of clause (vii) of subsection (2) of Section 56 of the Act, where he picked up the stamp duty value on the date of agreement, which was 01.04.2011, for fixing the amount of consideration for transfer of immovable property in favour of the assessee, for the purpose of said provision. Consequently, the stamp duty value of Rs.39,57,818/- on the date of agreement was taken by him for the purpose of said sub-clause (b).

P a g e 4 | 7 considering the totality of peculiar facts and circumstances of the present case I have held that completion of transaction of transfer of property including transfer of possession as completed during previous F.Y.2012-2013 pertaining to A.Y.2013-2014, therefore, merely because paper compliance was made by the developer belatedly during A.Y.2014-2015 due to the reasons beyond control of the assessee, the assessee cannot be penalized by applying amended provision of section 56(2)(vii)(b) of the Act.”

that the payments and registration of the sale deed in respect at Ram Sakhi

Apartment, Misirgonda, Ranchi has been done during financial year 2013-

14 relevant to assessment year 2014-15, thus provision of section 56(2)(vii)(b) is applicable and the observation of the AO and findings of the CIT(A) are correct upto this extent and the addition of Rs.40,000/- is confirmed.

Complex,Chadri, Sardhanand Road, Ranchi (Property No.2) is concerned,

from the said table at page 4, we note that agreement was made on 31.7.2012 and entire payment was made by cheque of Rs.5,00,000/- during

financial year 2012-13 part to A.Y. 2013-14 and only sale deed was registered on 30.7.2013 during assessment year 2014-15. Thus, in view of these facts, we have no hesitation to hold that when the entire payment was made during previous assessment year 2013-14, then merely because sale

deed was registered during assessment year 2014-15, the rigour of provisions of section 56(2)(vii)(b) of the Act cannot be triggered against the assessee. Hence, this contention of the assessee is accepted and addition

P a g e 5 | 7 of Rs.7,36,000/- is directed to be deleted following the order of Ranchi

Bench in the case of Sanjay Kumar Jain (supra).

City, Kanke Road from the said table, it is also discernible that agreement

was made on 16.8.2010 for Rs.13,00,000/- and payment of substantial

amount of Rs.10,00,000/- has been made on 19.11.2012 during

assessment year 2013-14. Only receiving of amount of Rs.3 lakhs has been paid on 30.7.2013 and sale deed was registered on the same date.

Looking to the dispute arising out of the immovable property transactions,

we are in agreement with the contention of ld A.R. that due to some

required permissions for execution of sale deed, the remaining amount of Rs.3 lac was retained for payment on the date of registration, thus provision

of section 56(2)(vii)(b) is not applicable to this transaction as per order of ITAT, Ranchi ‘SMC’ bench in the case of Sanjay Kumar Jain (supra).

Hence, this addition is also directed to be deleted.

Order pronounced in the open court under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 on 30 / 10/2019. (Laxmi Prasad Sahu) JUDICIALMEMBER

Ranchi; Dated 30 /10/2019 B.K.Parida, SPS

P a g e 6 | 7 Copy of the Order forwarded to :

Sr. Pvt. Secretary, ITAT,

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