Sanjay Dattatraya Dapodikar, Pune V. Income-tax Officer, Ward - 6(2), Pune

ITA 1747/PUN/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7515 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 14-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 56(2)(vii)(b)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT . / ITA NO.1747/PUN/2018 / ASSESSMENT YEAR : 2015-16 SANJAY DATTATRAYA DAPODIKAR, 60/61, PLOT NO.34, BHARATI NIWAS, ERANDWANE, PUNE 411 004 PAN : AAWPD6967D VS. ITO, WARD-6(2), PUNE (APPELLANT) (RESPONDENT) / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSE D BY THE CIT(A)-4, PUNE ON 21-08-2018 IN RELATION TO THE ASSESSMENT YEAR 2015-16. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESS EE PURCHASED DURING THE YEAR UNDER CONSIDERATION A PLOT OF LA ND ADMEASURING ABOUT 256.76 SQ.MTRS ALONG WITH TDR/FSI RIGHTS O F THE SAID PLOT OF LAND AT MOUJE PARVATI, SINHGAD ROAD, PUNE FOR A CONSIDERATION OF RS.31.00 LAKH. STAMP VALUE OF SUCH PLOT WA S APPELLANT BY SHRI SUNIL GANOO RESPONDENT BY SHRI M.K. VERMA DATE OF HEARING 30-04-2019 DATE OF PRONOUNCEMENT 30-04-2019 ITA NO.1747/PUN/2018 SANJAY D. DAPODIKAR 2 RS.57,07,775/-. INVOKING THE PROVISIONS OF SECTION 56(2 )(VII)(B), THE ASSESSING OFFICER (AO) HELD THAT THE DIFFERENCE BETWE EN THE STAMP VALUE OF THE PROPERTY PURCHASED AS ON THE DATE OF REGISTRATION OF SALE DEED AND THE ACTUAL PURCHASE CONSIDERATIO N WAS LIABLE TO BE CONSIDERED AS INCOME UNDER THIS SECTION. H E, THEREFORE, MADE AN ADDITION OF RS.26,07,775/- (RS.57,07 ,775 RS.31,00,000) U/S.56(2)(VII)(B). THE LD. CIT(A) SUSTAIN ED THE ADDITION AGAINST WHICH THE ASSESSEE HAS COME UP IN APPEAL BE FORE THE TRIBUNAL. 3. I HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE RELE VANT MATERIAL ON RECORD. THE FACTUAL MATRIX AS SET OUT IN THE ASSESSMENT ORDER AS WELL, IS THAT THE ASSESSEE ENTERED IN TO AN AGREEMENT WITH LATE SHRI DNYANESHWAR DATTATRAYA SHINDE, FATHER OF THE PRESENT VENDOR, SHRI VISHAL DNYANESHWAR SHINDE FOR PURCHASE OF THE PROPERTY ON 30-01-2008 AT AN AGREE D CONSIDERATION OF RS.21,00,000/-. AT THAT TIME, THE STAMP V ALUE OF THE PROPERTY WAS RS.23,75,000/-. A REGISTERED IRREVOCAB LE POWER OF ATTORNEY WAS EXECUTED ON THE SAME DATE. THE ASSESSE E PAID SUM OF RS.1.00 LAKH ON 08-01-2008 BY CHEQUE NO.72453 7. OUT OF BALANCE CONSIDERATION OF RS.20.00 LAKH, A SUM OF RS. 5.00 LAKH ITA NO.1747/PUN/2018 SANJAY D. DAPODIKAR 3 WAS TO BE PAID WITHIN 3 MONTHS FROM THE DATE OF AGREEMENT AN D RS.15.00 LAKH WAS TO BE PAID UPON SANCTION OF TDR BY THE PUNE MUNICIPAL CORPORATION. SHRI DNYANESHWAR DATTATRAYA SHINDE PASSED AWAY BEFORE EFFECTING THE TRANSFER OF THE PROPER TY IN FAVOUR OF THE ASSESSEE. SINCE SHRI DNYANESHWAR DATTATRAYA SHINDE HAD PASSED AWAY AFTER REGISTERING AN IRREVOCABLE POA IN FAVOUR OF THE ASSESSEE IN THE YEAR 2008, THE ASSESSEE ENTERED INTO A FRESH AGREEMENT WITH THE LEGAL HEIR OF THE DECEASED VENDO R FOR PURCHASE OF SUCH PROPERTY. ON 09-03-2015, A PURCHAS E DEED WAS EXECUTED FOR THE SAID PROPERTY AT A CONSIDERATION OF RS.31. 00 LAKH BETWEEN THE ASSESSEE AND SHRI VISHAL DNYANESHWAR SHINDE S/O . LATE SHRI DNYANESHWAR DATTATRAYA SHINDE. THE SALE DEED WAS REGISTERED ON 11-03-2015. A COPY OF THE REGISTERED SALE DEED DATED 11-03-2015 HAS BEEN PLACED IN THE PAPER BOOK. C LAUSE (9) OF THE SALE DEED CLEARLY MENTIONS THAT : `THE ASSIGNOR KNOWS ABOUT THE AGREEMENT AND POWER OF ATTORNEY DATED 30-01-2008 BETWEEN THE ASSIGNEE AND ASSIGNORS FATHER MR. DNYANESHW AR DATTATRAYA SHINDE. THUS, IT IS APPARENT THAT THE REGISTERED SA LE DEED EXECUTED ON 11-03-2015 IS NOT AN ALTOGETHER A FRESH SALE DEED, BUT CONTINUATION OF THE REGISTERED IRREVOCABLE POA ISSUE D IN FAVOUR OF THE ASSESSEE IN 2008. UNDER SUCH CIRCUMSTA NCES, A ITA NO.1747/PUN/2018 SANJAY D. DAPODIKAR 4 QUESTION ARISES AS TO WHETHER PROVISIONS OF SECTION 56(2)(V II)(B) ARE ATTRACTED IN THIS CASE. 4. IN ORDER TO APPRECIATE THE RIVAL CONTENTIONS, IT WOULD BE RELEVANT TO REPRODUCE THE PRESCRIPTION OF SECTION 56(2)(VII)(B ) AS UNDER : - ` IN PARTICULAR, AND WITHOUT PREJUDICE TO THE GENER ALITY OF THE PROVISIONS OF SUB-SECTION (1), THE FOLLOWING INCOMES, SHALL BE CHARGEABLE TO INCOME-TAX UNDER THE HEAD 'INCOME FROM OTHER SOURCE S', NAMELY : .. ( B ) ANY IMMOVABLE PROPERTY, ( I ) WITHOUT CONSIDERATION, THE STAMP DUTY VALUE OF WH ICH EXCEEDS FIFTY THOUSAND RUPEES, THE STAMP DUTY VALUE OF SUCH PROPE RTY; ( II ) FOR A CONSIDERATION WHICH IS LESS THAN THE STAMP DUTY VALUE OF THE PROPERTY BY AN AMOUNT EXCEEDING FIFTY THOUSAND RUPE ES, THE STAMP DUTY VALUE OF SUCH PROPERTY AS EXCEEDS SUCH CONSIDE RATION: PROVIDED THAT WHERE THE DATE OF THE AGREEMENT FIXIN G THE AMOUNT OF CONSIDERATION FOR THE TRANSFER OF IMMOVABLE PROP ERTY AND THE DATE OF REGISTRATION ARE NOT THE SAME, THE STAMP DU TY VALUE ON THE DATE OF THE AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF THIS SUB- CLAUSE: PROVIDED FURTHER THAT THE SAID PROVISO SHALL APPLY ONLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION REFERRED TO THERE IN, OR A PART THEREOF, HAS BEEN PAID BY ANY MODE OTHER THAN CASH ON OR BEFORE THE DATE OF THE AGREEMENT FOR THE TRANSFER OF SUCH IMMOVABLE PROPERTY; 5. THE CASE OF THE ASSESSEE IS THAT THE SECTION 56(2)( VII)(B) WAS INSERTED BY THE FINANCE ACT, 2013 W.E.F. 01-04-2014 AND HENCE THE SAME SHOULD NOT BE APPLIED AS THE AGREEMENT FOR PURCHASE OF PROPERTY WAS ENTERED INTO IN THE YEAR 2008 A ND AT THAT TIME THIS PROVISION WAS NOT IN VOGUE. IN MY CONSIDERED ITA NO.1747/PUN/2018 SANJAY D. DAPODIKAR 5 OPINION, THIS CONTENTION IS FAR-FETCHED. AS THE SALE DEED WAS ACTUALLY EXECUTED IN THE YEAR 2015 AND AT THAT TIME THE PROVISIO NS OF SECTION 56(2)(VII)(B) WERE ON THE STATUTE BOOK, THE SAME ARE HELD TO BE APPLICABLE, IN PRINCIPLE. 6. THE LD. AR RAISED AN ALTERNATE CONTENTION URGING THA T, IF AT ALL, THE PROVISIONS OF SECTION 56(2)(VII)(B) ARE TO BE APPLIED, THEN THE SAME SHOULD BE CONSIDERED IN ENTIRETY IN THE LIGHT OF TWO PROVISOS WITH THE EFFECT THAT, IF THE DATE OF AGREEMENT FIXING THE AMOUNT OF CONSIDERATION AND THE ACTUAL REGISTRATION FOR THE TRANSFER OF CAPITAL ASSET ARE NOT SAME, THEN THE VALUE SHOULD BE CONSIDERED WITH REFERENCE TO THE DATE OF AGREEMENT FIXING THE AMOUNT OF CONSIDERATION OF AN ANTERIOR DATE AND NOT THE STAMP VALUE ON THE DATE OF REGISTRATION OF SALE DEED. THE OTHER PR OVISO PROVIDES THAT SUCH SUBSTITUTION WOULD BE ALLOWED ONLY IF FULL CONSIDERATION OR PART THEREOF WAS RECEIVED BY MEANS OF BA NKING CHANNEL AT THE TIME OF EXECUTION OF THE AGREEMENT FOR TRANSF ER. 7. IN MY CONSIDERED OPINION, THE CONTENTION OF THE LD. AR DESERVES TO BE ACCEPTED. FIRST PROVISO TO SECTION 56(2)(VII)(B ) OF THE ACT CATEGORICALLY PROVIDES THAT WHERE THE DATE OF AGREEMEN T FIXING THE AMOUNT OF CONSIDERATION FOR THE TRANSFER OF IMMO VABLE ITA NO.1747/PUN/2018 SANJAY D. DAPODIKAR 6 PROPERTY AND THE DATE OF REGISTRATION ARE NOT THE SAME, THE STAMP DUTY VALUE ON THE DATE OF THE AGREEMENT MAY BE TAKEN FOR THE PURPOSE OF THIS PROVISION. ADMITTEDLY, THE IRREVOCABLE POA W AS REGISTERED IN THE YEAR 2008 FIXING THE PRICE OF THE PROPERTY AT RS.21.00 LAC, EVEN THOUGH THE ACTUAL TRANSFER TOOK PLACE IN THE YEAR 2015. PRESCRIPTION OF THE SECOND PROVISO IS ADMITTEDLY FULFILLED IN THE INSTANT CASE IN AS MUCH AS THE ASSESSEE PAID A SUM OF RS.1.00 LAKH AS PART PAYMENT PRIOR TO THE DATE OF THE AGREEMENT IN THE YEAR 2008 THROUGH BANKING CHANNEL. IN V IEW OF THE FOREGOING DISCUSSION, IT IS HELD THAT THE MANDATE OF T HE MAIN PART OF SECTION 56(2)(VII)(B) DOES NOT APPLY TO THE FAC TS OF THE INSTANT CASE AS IT IS COVERED BY THE FIRST AND SECOND PR OVISOS IN AS MUCH AS THE ASSESSEE ENTERED INTO AN AGREEMENT FIXING THE AMOUNT OF CONSIDERATION FOR THE PURCHASE OF IMMOVABLE P ROPERTY IN THE YEAR 2008 BUT THE ACTUAL REGISTRATION TOOK PLACE IN 2015 AND FURTHER THE ASSESSEE PAID A PART OF THE CONSIDERATION B Y CHEQUE IN THE YEAR 2008 BEFORE THE DATE OF THE AGREEMENT . IN SUCH CIRCUMSTANCES, IT IS THE STAMP VALUE ON THE DATE OF AGREEMENT IN THE YEAR 2008, WHICH SHOULD BE APPLIED FOR TH E PURPOSE OF THE SUB-CLAUSE AND NOT THE STAMP VALUE AS IN TH E YEAR 2015. STAMP VALUE OF THE PROPERTY AS ON THE DATE OF AGREE MENT ITA NO.1747/PUN/2018 SANJAY D. DAPODIKAR 7 IN 2008 WAS RS.23,75,000/- AS HAS BEEN RECORDED IN PA RA NO.4.2 OF THE ASSESSMENT ORDER. AS SUCH STAMP VALUE IS OBVIOUSLY LESS THAN THE ACTUAL CONSIDERATION AT RS.31.00 LAKH, I HOLD THAT THE MANDATE OF THE MAIN PART OF SECTION 56(2)(VII)(B) IS NOT ATTRAC TED SO AS TO WARRANT ANY ADDITION ON THIS SCORE. I, THEREFORE, ORDER TO DELETE THE ADDITION OF RS.26.07 LAKH. 8. IN THE RESULT, THE APPEAL IS ALLOWED TO THIS EXTENT. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH APRIL, 2019. SD/- (R.S.SYAL) / VICE PRESIDENT PUNE; DATED : 30 TH APRIL, 2019 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT (APPEALS)-4, PUNE 4. THE PR. CIT-3, PUNE 5. , , SMC / DR SMC, ITAT, PUNE; 6. / GUARD FILE. // TRUE COPY // / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NO.1747/PUN/2018 SANJAY D. DAPODIKAR 8 DATE 1. DRAFT DICTATED ON 30-04-2019 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 30-04-2019 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *