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Income Tax Appellate Tribunal, ‘A‘ BENCH
Before: SHRI M.BALAGANESH & SHRI AMARJIT SINGH
आदेश / O R D E R PER M. BALAGANESH (A.M):
This appeal in A.Y.2015-16 preferred by the order against the revision order of the ld. Principal Commissioner of Income Tax-20, Mumbai u/s.263 of the Act dated 11/03/2021 for the A.Y.2015-16.
The first issue to be decided in this appeal is as to whether the ld. Pr. Commissioner of Income Tax had validly assumed revision Jurisdiction u/s.263 of the Act in the facts and circumstances of the instant case. The interconnected issue involved therein is on merits of the addition in the form of difference between stamp duty value on the date of registration of the property as against stamp duty valuation on the date of booking of the flats and the actual consideration and directed to be added by the Pr. CIT in the sum of Rs.1,13,43,600/- as against Rs.22,78,740/-.
We have heard rival submissions and perused the materials available on record. We find that assessee is an individual and had filed his return of income for the A.Y.2015-16 on 31/03/2017 declaring total income of Rs.78,19,090/-. The assessee is engaged in the business of real estate development and re-development of old buildings in Mumbai. During the year under consideration, the assessee has shown income under the head ‘income from business or profession’. During the course of assessment proceedings, the assessee furnished details of flats sold along with copies of agreement thereof before the ld. AO. On verification of the sale agreement, the ld. AO compared the stamp duty valuation of those flats sold with the actual consideration and resorted to make addition of Rs.22,78,740/- by applying provisions of 43CA of the Act, being the difference between the stamp duty value on the date of booking and actual sale consideration. The assessee has preferred appeal before the ld. Commissioner of Income Tax Appeals (Mumbai) and the same is pending. Meanwhile, the ld. Pr. Commissioner of Income Tax by exercising his revisionary powers u/s. 263 of the Act, sought to revise the order passed by the ld.AO as erroneous and prejudicial to the interest of the revenue on the ground that the ld. AO ought not to have been taken the stamp date value on the date of booking of the flats and instead he should have taken the stamp duty value on the date of actual registration of the flats. Accordingly, the ld. Pr. Commissioner of Income Tax directed the ld. AO to add the differential sale consideration in the sum of Rs.1,13,43,600/- by applying the provisions of Section 43CA of the Act. According to the ld. PCIT, the ld. AO had incorrectly applying the provisions of law of Section 43CA of the Act while adjudicating the issue, even though relevant enquiries were indeed made by the ld.AO while framing the assessment.
3.1. The basis of framing of addition by the ld AO in the sum of Rs.22,78,740/- u/s.43CA of the Act is as under:- S. Carpet Area Booking Agreement Market Date of Full Registrati Market Difference Difference 1st N. Date Value value considere on date value in% on installme d on booking nt received registration A B C 1 201 450 14.12.11 4000000 4812825 04.12.13 05.12.14 07.05.14 7625500 812825 20.32 % 2 202 450 14.12.11 4000000 4812825 23.01.14 06.02.14 07.05.14 7625500 812825 20.32 % 3 503 360 08.03.13 4000000 4315860 01.10.13 02.07.14 5272000 315860 7.90 % 4 702 360 08.05.13 4000000 4315860 25.06.14 30.06.14 19.07.14 5272600 315860 7.90 % 5 1102 360 10.05.13 4500000 4521370 08.02.14 24.02.14 26.11.14 5525000 21370 0.4 7 :/0 Total 22,78,740 3.2. The basis of addition of Rs.1,13,43,600/- as directed by the ld. PCIT to the ld.AO is as under:- S. Office/ Name of the Date of Considera Stamp Difference Payment No. Flat No. Purchaser agreement tion duty received valuation During F.Y.
1 201 office Moh. 07.05.2014 40,00,000 76,25,500 36,25,500 2013-14 ImialQuereshi
2 202 Office FarhadSattar 07.05.2014 40,00,000 76,25,500 36,25,500 2013-14 3 11 04 Flat Ahiq Hussain 06.06.2014 50,00,000 55,23,000 5,23,000 2014-15 4 503 Flat JubedaChavda 30.06.2014 40,00,000 52,72,000 12,72,000 2014-15 5 1102 Flat Yusuf Therali 26.11.2014 45,00,000 55,25,000 10,25,000 2013-14 6 702 Flat Inayat Hussain 19.07.2014 40,00,000 52,72,600 12.72,600 2014-15
- 1,13,43,600 3.3. The short point that arises for our consideration is that when there is a time lag between the date of booking of the flat and the final registration of the flat in favour of the prospective buyers by the assessee, then whether the stamp duty value on the date of booking of the flat or on the date of actual registration of the flat should be considered in terms of Section 43CA of the Act. We find that the provisions of Section 43CA of the Act has been introduced in the statute w.e.f. 01/04/2014 relevant to the A.Y.2014-15 and hence, the same is applicable for the year under consideration. From the aforesaid table, it could be seen that the prospective buyers had booked the flats from the assessee on 14/12/2011, 08/03/2013, 08/05/2011 & 10/05/2013 whereas the registration of those flats had effectively happened on 07/05/2014, 07/07/2014, 19/07/2014 and 26/11/2014, thereby clearly proving the time gap between the date of booking of flats and the date of registration of the flats in favour of the prospective buyers by the assessee. Hence, there arises a doubt as to what would be the relevant date for the applicability of stamp duty valuation. We find that this has been squarely addressed by the provisions of sub-section (3) of Section 43CA of the Act itself which reads as under:-
“(3) Where the date of agreement fixing the value of consideration for transfer of the asset and the date of registration of such transfer of asset are not the same, the value referred to in sub-section (1) may be taken as the value assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer on the date of the agreement.”
3.4. From the reading of the aforesaid provisions of 43CA(3) of the Act, it is very clear that stamp duty valuation on the date of booking is to be considered and the said stamp duty valuation shall have to be compared with actual sale consideration. This has been done by the ld. AO and hence, it could be safely concluded that the ld. AO had taken a plausible view in the matter by applying the provisions of the Act. We find that there is no incorrect application of law on the part of the ld. AO as alleged by the ld. PCIT. Having brought on record the time lag between the date of booking and the date of actual registration of the flats, the ld. PCIT ought not to have directed the ld. AO to take the stamp duty valuation on the date of registration of the flat which is completely in contradiction of provisions of Section 43CA(3) of the Act. Hence, it could be safely concluded that the ld. AO having taken a plausible view in the matter and the ld. PCIT is only trying to substitute his view in place of the view already taken by the ld. AO. This, in our considered opinion, cannot be done by the ld. PCIT by invoking his revision jurisdiction u/s.263 of the Act. Reliance in this regard is placed on the decision of the Hon’ble Jurisdictional High Court in the case of Gabriel India Ltd., reported in 203 ITR 108. Moreover, we find that the ld. AO had not committed any error in the order as he had apparently applied the provisions of Section 43CA(3) of the Act. Hence, the twin conditions that are required for invoking revision jurisdiction i.e. (i) order of the ld. AO should be erroneous and (ii) it should be prejudicial to the interest of the revenue are not cumulatively satisfied in the instant case. Hence on this count also, revision jurisdiction u/s.263 of the Act cannot be invoked by the ld. PCIT. Reliance in this regard is placed on the decision of the Hon’ble Supreme Court in the case of Malabar Industrial Company Ltd., vs. CIT reported in 243 ITR 83. Accordingly, the ground raised by the assessee on invalid assumption of jurisdiction u/s.263 of the Act by the ld. PCIT is allowed. Since relief is granted on technical ground, we are not inclined to address the issue argued by the ld. AR on merits and the same are hereby left open. On merits of the addition, we are conscious of the fact that the issue is pending before the ld. CIT(A). Hence, we are not inclined to given any opinion on merits as it would jeopardize the decision making process of ld. CIT(A).
In the result, appeal of the assessee is allowed. Order pronounced on 30/ 08 /2021 by way of proper mentioning in the notice board.