Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI
Before: Shri S. S. Godara, J.M. & Dr.A.L.Saini, A.M.)
IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH, RANCHI (Before Shri S. S. Godara, J.M. & Dr.A.L.Saini, A.M.)
ITA No. 285/Ran/18 : Asstt. Year : 2014-15
Shri Kant Thakur Vs D.C.I.T, Cir-3, Ranchi PAN: ADTPT8591M (APPELLANT) (RESPONDENT)
Appellant/assessee by :Shri Devesh Poddar, Advocate, ld.AR Respondent/department by : Shri P.K. Mondal, JCIT/ld.DR
Date of Hearing : 11-01-2019 Date of Pronouncement: 22-02-2019
ORDER PER BENCH: The captioned appeal filed by the assessee, is directed against the order dated 11-06-2018 passed by the ld. Commissioner of Income-tax (Appeals), Ranchi, which in turn arise out of the order passed by the Assessing Officer u/s. 143(3) of the Income-Tax Act, 1961 (in short, the Act) dated 05-12-2016.
Grounds of appeal raised by the assessee are as follows: 1. For that Ld. CIT(A) was not justified in confirming the addition made for difference in the purchase price as per stamp duty valuation and actual consideration paid. Provision of section 56(2)(VII)(b) were applied and confirmed by Ld. CIT(A) . 2. For that appellant had booked the premises for purchase by signing a purchase agreement and making an advance payment of Page1 Rs. 50,000/- on 11/12/2002. The property purchased was under construction and after completion of construction necessary clearances was obtained from the government. Registration of the 1 ITA No. 285/Ran/18 A.Y 2014-15 Shri Kant Thakur
property was done in the year 20l3-14, as such, stamp duty was payable as per rate prevalent on 01/04/2013. 3. For that the provision of section 56(2)(VII)(b) was not attracted since payment was made for advance by cheque on 09/08/2003. In any case the provision of section 56(2)(VII)(b) can only be attracted for the deeds executed after 01/04/2014, since, the provision was introduced by finance Act 2013 introduced in May 2013. 4. For that the final installment amount for the purchase of the property was made in the year 2011. It was since then that the assessee was chasing the seller for registry, however due to the ill health of the seller, he could not get the registry executed. As a matter of fact, the stamps were also purchased in 2012 for the registry, even then also the seller was not in the position to go to the registry office for the same. Finally, after few months, the assessee got the registry stamps period extended till 2013 and the registry was executed at the residence of the seller since he could not go to the registrar office. As such, in alternative, the provisions of section 56(2)(vii)(b) should not be attracted to the case of assessee . 5. For that interest u/s 234A and 23413 should have been charged on the returned income and not on the assessed income following the decision of Hon'ble Jharkhand High Court. 6. For that other grounds in detail will be argued at the time of hearing
Ground nos. 1 to 4 relates to confirmation of addition made on account of difference in purchase price as per stamp duty valuation and actual consideration paid.
The brief facts qua the issue are that the appellant, who had declared income from other sources, had filed his Return of Income for Assessment Year 2014-15 on Page2 06.03.2015 declaring income of Rs. 56,04,270/-. The return was processed u/s. 2 ITA No. 285/Ran/18 A.Y 2014-15 Shri Kant Thakur
143(1) of the Act. The case was selected for complete scrutiny under Computer Assisted Scrutiny Selection (CASS). During the scrutiny proceedings the Ld. Assessing Officer has noted that the appellant had purchased a property registered on 27.09.2013. The purchase consideration of the property was at Rs.17,90,000/- while the valuation of the stamp duty authority of the property was at Rs.37,40,000/-. The Ld. Assessing Officer invoked provisions of section 56(2)( vii)(b) of the Act and added the difference of Rs.19,50,000/- to the income of the appellant.
On appeal, ld. CIT(A) confirmed the addition made by Assessing Officer. Aggrieved, the assesse is in appeal before us.
We have heard both the parties and perused the material available on record. We note that the appellant purchased a property through a registered deed executed on 27.09.2013. The agreement of purchase of the said property was executed on 15.09.2001 and the advance of Rs.1 0,000/- was paid by cheque on 09.08.2003. The total consideration fixed for the property was Rs.17,19,000/-. However, at the time of registration the stamp duty valuation was at Rs.37,40,000/- as such, Ld. Assessing Officer assessed Rs.19.50,000/- being the difference between stamp duty valuation and actual consideration (Rs.37,40,000 – Rs.17,19,000) under the head income from other sources as per provision of section 56(2)(vii)(b) of the Act. The appellant stated that the agreement was executed on 15.09.2001 and payment of advance was made on 09.08.2003 by cheque. The payment made confirmed that the agreement for purchase of the property was made in any case of 09.08.2003. We note that provisions of section56(2)(vii)(b) of the Act does not apply to assessee’s case under consideration, as the advance payment was made on 09-08-2003 after the agreement Page3 made/executed on 15-09-2001. In order to invoke the provisions of section 56(2)(vii)(b), the assesse ought to have paid the advance before the agreement as 3 ITA No. 285/Ran/18 A.Y 2014-15 Shri Kant Thakur
executed. In this case the agreement was executed on 15-09-2001 and advance payment has not been made prior to this agreement. However, the advance payment was made on 09-08-2003, which is much after 15-09-2001. Therefore, the provisions of section 56(2)(vii)(b) of the Act does not apply to assessee’s case under consideration. However, we note that the assessee’s case under consideration relates to provisions of section 56(2)(vii)( c ) of the Act, which states that AO may refer the matter to the Departmental Valuation Officer (D.V.O) to determine the fair value. Therefore, we remit this issue back to the file of the AO with the direction to follow the provisions of section 56(2)(vii) ( c) proviso of the Act and to adjudicate the issue in accordance with the law by making necessary reference u/s. 50C(2) of the Act to the DVO.
In the result, the appeal of the assesse is allowed for statistical purpose.
Order Pronounced in the Open Court on 22 -02-2019
Sd/- Sd/- (S. S. Godara) (Dr. A.L.Saini) Judicial Member Accountant Member Dated: 22 -02-2019 *PRADIP (Sr.PS) Copy of the order forwarded to: 1. The Appellant/Assessee: Sri Kant Thakur, Sukhdeo Nagar, Ratu Road, Opp: Uphar Cinera, Ranchi-834005. 2 The Respondent/Revenue : The DCIT, Cir-3, Ranchi 3. The CIT-, 4. The CIT(A)-, 5. DR, Ranchi Benches, Ranchi Page4 True Copy, By order, Assistant Registrar /Senior P.S ITAT, Ranchi Benches 4 ITA No. 285/Ran/18 A.Y 2014-15 Shri Kant Thakur