Kings Radio Exim Private Limited, Hyderabad V. Deputy Commissioner OF Income Tax Central Circle2-(2), Hyderabad

ITA 156/Hyd/2021

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 6377 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2018-2019
• Appeal Filed On: 15-03-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y.V.S.T. SAI
• Assessee Lawyers: P.MURALI MOHANA RAO
• Keywords: Gift
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “B” : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. No.156/HYD/2021 Assessment Year: 2018-19 M/s.Kings Radio Exim Private Limited, HYDERABAD [PAN: AAECK9652P] Vs Deputy Commissioner of Income Tax, Central Circle-2(2), HYDERABAD (Appellant) (Respondent) For Assessee : Shri P.Murali Mohana Rao, AR For Revenue : Shri Y.V.S.T.Sai, CIT-DR Date of Hearing : 27-10-2021 Date of Pronouncement : 15-12-2021 O R D E R PER S.S.GODARA, J.M. : This assessee’s appeal for AY.2018-19 arises from the CIT(A)-12, Hyderabad’s order dated 27-01-2021 passed in case No.10200 / 2019-20, involving proceedings u/s. 143(3) of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both the parties. Case file perused. 2. The assessee’s sole substantive grievance that arises for our apt adjudication in the instant case on merits is that of correctness of both the lower authorities’ action making Section 56(2)(x)(b) addition of Rs.8,81,20,000/- during the ITA No. 156/Hyd/2021 :- 2 -: course of assessment framed on 30-12-2019 and upheld in the CIT(A)’s lower appellate order under challenge. A few relevant facts may be noticed. 3. There is hardly any dispute that the impugned addition has arisen on account of the assessee’s registered purchase deed dt.04-05-2017 executed in its favour by the vendor Smt.G.Rani for Rs.8,80,00,000/-. Both the learned lower authorities admittedly refer to the said sale consideration as per SRO Valuation as Rs.26,43,60,000/- (two properties) for invoking the impugned deemed gift addition of Rs.8,81,20,000/-. The assessee’s case before us in this factual backdrop is that both the learned lower authorities have erred in law and on facts in invoking the impugned gift addition on various legal and factual aspects which is vehemently contested by the Revenue side. 4. It transpires from a perusal of the assessee’s purchase deed herein dt.04-05-2017 that both the vendor and the vendee parties had executed the corresponding former agreement(s) dt.19-09-2016 followed by payment of Rs.3 crores made through banking channel on 21-09-2016. Case file next indicates that these parties executed yet another alleged agreement dt 08-02-2017. There does not appear much dispute between the parties that Section 56(2)(x)(b) 1 st proviso stipulates that where the date of agreement fixing the amount of sale consideration for the transfer of immoveable property and registration are not the same, stamp duty on the former day could be taken; provided (in light of 2 nd proviso) that a part ITA No. 156/Hyd/2021 :- 3 -: or whole consideration is paid on or before the agreement date in prescribed mode(s). Chapter-XIII Section 118(b) of the Negotiable Instruments act carries a presumption that “every negotiable instrument bearing a date was made or drawn on such date”. We thus conclude that the assessee herein; who had submitted cheque for payment of Rs.3 crores as on 19-09- 2016; which in turn, was encashed on 21-09-2016 followed by the latter agreement dt.08-02-2017, is very much entitled for relief of Section 56(2)(x)(b) 1 st and 2 nd proviso. Coupled with this comes case law Satendra Koushik Vs. ITO (2019) 106 taxmann.com 244 holds in light of Section 56(2)(vii)(b)(ii) read with Explanation (d) that the clinching statutory expression “property” [means............ capital asset .....] does not include stock-in-trade. The very definition clause is admittedly imported and made applicable in 56(2)(x), Explanation as well. It is not the Revenue’s case that the assessee had treated the immoveable property in issue as a capital asset. We thus delete the impugned addition for these precise reasons. 5. This assessee’s appeal is allowed in above terms. Order pronounced in the open court on 15 th December, 2021 Sd/- Sd/- (LAXMI PRASAD SAHU) (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 15-12-2021 TNMM ITA No. 156/Hyd/2021 :- 4 -: Copy to : 1.M/s.Kings Radio Exim Pvt. Ltd., C/o. P.Murali & Co., Chartered Accountants, 6-3-655/2/3, 1 st Floor, Somajiguda, Hyderabad. 2.The DCIT, Central Circle-2(2), Hyderabad. 3.CIT(Appeals)-12, Hyderabad. 4.Pr.CIT(Central)-Hyderabad. 5.D.R. ITAT, Hyderabad. 6.Guard File.