DNYANESHWAR MARUTI GAIKWAD,PUNE vs. INCOME TAX OFFICER WARD 14(3), PUNE

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ITA 36/PUN/2021Status: DisposedITAT Pune19 July 2022AY 2014-153 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that Section 56(2)(vii)(b) of the Act is pari materia to Section 50C, and the statutory tolerance margin of 10%, though amended later, should be applied retrospectively as it is curative in nature. Therefore, the addition made under Section 56(2)(vii)(b) was deleted.

What were the facts?

The assessee's appeal for AY 2014-15 concerned an addition of Rs. 3,00,200/- made on account of the difference between the actual and stamp price of an asset. This difference arose from the property's valuation.

What were the issues?

The key issue was whether the benefit of the statutory tolerance margin, as provided in Section 50C and subsequently in Section 56(2)(vii)(b), applied retrospectively to the assessment year in question.

Which sections of the Income-tax Act were involved?

Section 56(2)(vii)(b),Section 50C

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “A”

Before: SHRI S.S.GODARA & DR. DIPAK P. RIPOTE

For Respondent: Shri S P Walimbe – DR
Hearing: 24/06/2022Pronounced: 19/07/2022

ORDER

Per S.S.Godara, JM:

1.

This assessee’s appeal for A.Y.2014-15 is directed against the Commissioner of Income Tax(Appeals)-7, Pune’s order dated 21.02.2020 passed in case no.PN/CIT(A)-7/Wd-14( 3)/10887/2016-17, in proceedings u/s.143(3) of the Income Tax Act, in short “the Act”.

Case called twice. None appeared at assessee’s behest. It is accordingly proceeded ex-parte.

2.

Coming to the assessee’s sole substantial grievance challenging correctness of section 56(2)(vii)(b) of the Act, addition of Rs.3,00,200/-, we note at the outset that the same has arisen on account of difference between actual and stamp price of the “asset”

A.Y. 2014-15 Dnyaneshwar Maruti Gaikwad Vs. ITO, Ward-14(3), Pune (A) in issue involving figures of Rs.1,00,00,000/- and Rs.1,06,00,400/- ; coming to Rs.6,00,400/- ; resulting in the impugned addition of Rs.3,00,200/- [to the extent of 50% share] in his hands.

3.

Mr.Walilmbe could not hardly dispute the clinching fact that the impugned statutory provision i.e.section 56(2)(vii)(b) is indeed pari materia to sec 50C of the Act, wherein the Fair Market Value is determined after making statutory reference to the DVO. The legislature has also adopted sec 50C(2) in sec 56(2)(vii) 3rd proviso as well which again forms subject matter of relief of tolerance margin to the extent of 5% and 10% ; in light of third proviso as per amendment by Finance Act 2018 w.e.f. 01.04.2019 followed by its substitution w.e.f. 01.04.2021, respectively.

4.

Mr.Walimbe vehemently argued that the foregoing latter tolerance margin of 10% in sec 50C, applies w.e.f 01.04.2021 whereas we are in A.Y.2014-15 only. He sought to buttress the point the foregoing tolerance margin does not carry any retrospective effect. We find no merit in the Revenue’s arguments in in light of [2021] 123 taxmann.com 252 (Mum Trib) Maria Fernandes Cheryl Vs. ITO holding the foregoing proviso to be carrying retrospective effect being curative in nature. We thus, delete the impugned the section 56(2)(vii)(b) of the Act since statutory tolerance margin of 10% in very terms.

A.Y. 2014-15 Dnyaneshwar Maruti Gaikwad Vs. ITO, Ward-14(3), Pune (A)

4.1 Delay of 291 days is condoned since falling in Covid-19 Pandemic Outbreak period.

5.

This assessee’s appeal is allowed in above terms. Order pronounced in the open Court on 19th July, 2022.

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