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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: HON’BLE SHRI SAKTIJIT DEY, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
1 Assessment Year: 2014-15 आयकर अपीलीय अिधकरण “एफ” "ायपीठ मुंबई म"। IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI माननीय "ी श""जीत दे, "ाियक सद" एवं माननीय "ी मनोज कुमार अ"वाल ,लेखा सद" के सम"। BEFORE HON’BLE SHRI SAKTIJIT DEY, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM (Hearing Through Video Conferencing Mode) आयकर अपील सं./ (िनधा"रण वष" / Assessment Year: 2014-15) Shri Umesh Raosaheb Pawar Patil Pr. CIT Ashar I.T. Park, B Wing, 6th Floor 102, Shree Ganga Prasad Ghantali बनाम/ Sainath Chowk Wagle Industrial Estate Vs. Ram Ganesh Gadkari Road Thane (West)-400 604 Naupada, Thane-400 602. PAN/GIR No. AAUPP-3270-B (अपीलाथ"/Appellant) (""थ" / Respondent) : Assessee by : Shri Ketan Vajani– Ld. AR Revenue by : Shri Ajay Kumar-Ld. DR सुनवाई की तारीख/ : 23/11/2020 Date of Hearing घोषणा की तारीख / : 16/12/2020 Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. By way of this appeal, the assessee challenges the validity of revisional jurisdiction u/s. 263 as exercised by learned Pr. Commissioner of Income-Tax-2, Thane [in short referred to as ‘Pr.CIT’], for Assessment Year [in short referred to as ‘AY’] 2014-15, vide order dated 25/02/2019. The effective grounds taken by the assessee read as under:-
2 Assessment Year: 2014-15 (a) On the facts and in the circumstances of the case, the Principal Commissioner of Income-tax, hereinafter referred to as the "Pr. CIT", has erred in invoking the provisions of section 263 of the Income tax Act, 1961 in the case of the appellant. (b) On the facts and in the circumstances of the case, the Pr. CIT has erred in concluding that the provisions of section 43CA are applicable in respect of a flat, held as stock in trade, transferred by the appellant prior to 1-4-2013 and thereby erred in concluding that the assessment order passed by the assessing officer is erroneous and also prejudicial to the interest of revenue. (c) The appellant respectfully submits that the assessment order in his case is neither erroneous nor prejudicial to the interest of revenue and accordingly the provisions of section 263 of the Act cannot be invoked in his case. In view of this, the appellant prays that the order dated 25th February, 2019, passed u/s. 263 of the Act shall please be quashed. (d) Without prejudice to the above, on the facts and in the circumstances of the case, the Pr. CIT has erred in not considering various alternate contentions of the appellant and thereby erred in passing an order u/s. 263 in contravention of the provisions of law.
We have carefully heard the rival submissions and perused relevant material on record including submissions made during assessment proceedings as well as during revisional proceedings. The judicial precedents as cited during the course of hearing have duly been deliberated upon. Our adjudication to the subject matter of appeal would be as given in succeeding paragraphs. 3.1 The material facts are that the assessee being resident individual stated to be engaged as builders & developer, was assessed u/s. 143(3) on 12/09/2016 accepting returned income of Rs.117.53 Lacs. The assessment order is a short order and there is no material discussion, whatsoever, regarding issues considered by Ld. AO during the course of assessment proceedings. 3.2 Subsequently, learned Pr.CIT, upon perusal of case records and invoking the provisions of Sec.263, observed that the assessee sold flat no. B/102 for Rs.24 Lacs as against stamp duty value (SDV) of Rs.31.45 Lacs which would attract the provisions of Sec.43CA which was not considered by Ld. AO and therefore, the order was erroneous and 3 Assessment Year: 2014-15 prejudicial to the interest of the revenue. Accordingly, the assessee was show-caused regarding invocation of provisions of Sec.43CA. 3.3 The assessee defended the assessment order by submitting that the flat was sold in earlier year vide agreement dated 26/04/2012 and the entire sale proceeds were already received in financial year 2012-13. The occupation certificate was received on 07/09/2013. The assessee followed project completion method to offer the income to tax and therefore, this sale was shown in the books in AY 2014-15. The attention was drawn to the fact that Sec.43CA as introduced by Finance Act, 2013 and would apply to transactions of immoveable property held as stock-in- trade from 01/04/2014 i.e. from AY 2014-15 only. Various other submissions were made in support of the fact that since transfer of the property took place in earlier year, the provisions of Sec.43CA would not be applicable to the stated transaction. 3.4 However, Ld. Pr.CIT opined that what was executed on 26/04/2012 was mere agreement to sale and not registered sale deed or conveyance deed. The mere agreement does not convey any title or interest in the immoveable property. By entering into the agreement, the buyer would merely get a right to purchase the property and the same could not be equated with ownership of property. The right to purchase property, in itself, is distinct & transferable intangible asset. Since the assessee has offered the income in this year, the provision of Sec.43CA would apply to the facts of the case. It was noted in the order that the assessee had submitted details of bookings / advances wherein the assessee himself submitted agreement value and market value of all flats in which the booking was confirmed. Therefore, the provisions of Sec.43CA would apply and non-consideration of the same by Ld. AO