Mr. M.N. Belliappa (HUF), Bangalore V. Income Tax Officer, Ward- 6(3)(1), Bengaluru

ITA 2058/BANG/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7368 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 01-12-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 25-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R PREMI
• Assessee Lawyers: K Y NINGOJ RAO
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Deemed to accrue or arise in india; Fair market value; Set aside
• Section: 56(2)(vii)(b); 50C; 142(1); 56(2); 234B; 143(2); 13; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI. B. R. BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.2058/BANG/2019 ASSESSMENT YEAR : 2014-15 MR. M.N BELLIAPPA (HUF), #24, GAGAN, 1 ST B MAIN ROAD, ATMANANDA COLONY, R.T NAGAR, BENGALURU-560 032. PAN AADHM 7020 D VS. THE INCOME TAX OFFICER, WARD-6(3)(1), BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI K.Y NINGOJ RAO, C.A RESPONDENT BY : SHRI R PREMI, JCIT DATE OF HEARING : 01-12-2020 DATE OF PRONOUNCEMENT : 19-01-2021 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT APPEAL HAS BEEN FILED BY ASSESSEE AGAINST O RDER DATED 20/08/2019 PASSED BY LD. CIT (A)-6, MANGALORE FOR ASSESSMENT YEAR 2014-15 ON FOLLOWING GROUNDS OF APP EAL: 1. THAT THE IMPUGNED ORDER OF THE LEARNED COMMISSI ONER OF INCOME TAX (APPEALS) 6, BENGALURU, THE RESPONDENT IS LIABLE TO SET ASIDE IN SO FAR AS THE SAME IS IRREGULAR, INCORRECT, IMPROPER, UNLAWFU L AND OPPOSED TO FACTS OF THE CASE AND LAW. RS.13,90,191/- PAGE 2 OF 13 ITA NO.2058/BANG/2019 2. THE LEARNED RESPONDENT ERRED IN UPHOLDING THE IM PUGNED ASSESSMENT MADE BY THE ASSESSING OFFICER WITH COMPL ETE DISREGARD TO THE PROVISIONS OF SECTION 56(2)(VII)(B) AND OF SECTION 50C OF THE INCOME TAX ACT, 1961. RS.13,90,191/- 3. THE RESPONDENT ERRED IN UPHOLDING THE IMPUGNED A SSESSMENT OF RS.44,99,000/- AS INCOME OF THE APPELLANT U/S 56(2) (VII)(B) OF THE ACT WITH COMPLETE DISREGARD TO THE FACT THAT THE SAID TRANSF ER OF ASSET DID NOT FALL WITHIN THE AMBIT OF SECTION 50C AND 56(2)(VII)(B) O F THE ACT. RS.13,90,191/- 4. THE RESPONDENT ERRED IN UPHOLDING THE IMPUGNED A SSESSMENT OF RS.44,99,000/- AS INCOME OF THE APPELLANT WITH COMP LETE DISREGARD TO THE AGREEMENT TO SELL DATED 20TH SEPTEMBER, 2011 SUBSIS TED BETWEEN THE APPELLANT HUF AND ITS KARTHA AND A COPARCENER, THE VENDOR. RS.13,90,191/- 5. THE RESPONDENT ERRED IN UPHOLDING THE IMPUGNED A SSESSMENT OF RS.44,99,000/- AS INCOME OF THE APPELLANT WITH COMP LETE DISREGARD TO THE AGREEMENT TO SELL DATED 20 TH SEPTEMBER, 2011 SUBSISTED BETWEEN THE APPELLANT AND ITS KARTHA AND A COPARCENER, THE VEND OR MERELY OUT OF HER SUSPICION, SURMISE AND CONJECTURE STATING THAT 'THE DATE OF SALE AGREEMENT BEING ONE DAY BEFORE THE NOTIFICATION REVISING GUID ANCE VALUE WAS ISSUED ALSO RAISE A QUESTION MARK OVER ITS CREDIBILITY'. RS.13,90,191/- 6. THE RESPONDENT ERRED IN UPHOLDING THE IMPUGNED A SSESSMENT OF RS.44,99,000/- AS INCOME OF THE APPELLANT WITH COMP LETE DISREGARD TO THE FACT THAT THE VENDOR AND THE PURCHASER ARE THE SAME AND THE SAID TRANSFER IS A TRANSFER OF ASSET BETWEEN THE RELATIVES AS CON TEMPLATED UNDER THE SECOND PROVISO TO SECTION 56(2) OF THE ACT. RS.13 ,90,191/- 7. THE RESPONDENT ERRED IN UPHOLDING THE IMPUGNED A SSESSMENT OF RS.44,99,000/- AS INCOME OF THE APPELLANT WITH COMP LETE DISREGARD TO THE FACT THAT THE VENDOR AND THE PURCHASER ARE THE SAME AND THE SAID TRANSFER IS A TRANSFER OF ASSET BETWEEN THE RELATIVES AS CON TEMPLATED UNDER THE SECOND PROVISO TO SECTION 56(2) OF THE ACT. RS.13 ,90,191/- 8. THE RESPONDENT ERRED IN UPHOLDING THE IMPUGNED A SSESSMENT OF RS.44,99,000/- AS INCOME OF THE APPELLANT WITH COMP LETE DISREGARD TO THE FACT THAT THE VENDOR AND THE PURCHASER ARE THE SAME AND THE SAID TRANSFER IS A TRANSFER OF ASSET BETWEEN THE RELATIVES AS CON TEMPLATED UNDER THE SECOND PROVISO TO SECTION 56(2) OF THE ACT. RS.13 ,90,191/- RS.13,90,191/- 9. THE RESPONDENT ERRED IN UPHOLDING THE IMPUGNED A SSESSMENT OF RS.44,99,000/- AS INCOME OF THE APPELLANT WITH COMP LETE DISREGARD TO THE FACT THAT THE VENDOR AND THE PURCHASER ARE THE SAME AND TO THE WELL- ESTABLISHED PRINCIPLE OF LAW THAT ONE CANNOT MAKE P ROFIT OF ONESELF. RS.13,90,191/- 10. THE RESPONDENT ERRED IN UPHOLDING THE IMPUGNED ASSESSMENT OF RS.44,99,000/- AS INCOME OF THE APPELLANT WITH COMP LETE DISREGARD TO THE GUIDANCE VALUE FIXED BY THE CENTRAL VALUTION COMMIT TEE OF KARNATAKA BY PAGE 3 OF 13 ITA NO.2058/BANG/2019 ITS NOTIFICATION DATED 17.4.2007 BEARING NO. CVC/BU D/5/2006-07 IN FORCE AS UP TO 25.9.2011. RS.13,90,191/- 11. THE RESPONDENT ERRED IN UPHOLDING THE -2UGNED A SSESSMENT OF RS.44,99,000/- AS -COME OF THE APPELLANT WITH COMPL ETE DISREGARD TO THE DECISION OF THE SUPREME IN THE CASE OF SANJEEVLAL V . CIT 365 ITR 389 (SC). RS.13,90,191/- 12. THAT THE RESPONDENT OFFICER ERRED IN LEVYING A SUM OF RS.4,48,866/- AS THE INTEREST U/S 234B OF THE INCOME TAX ACT, 196 1 WITH TOTAL DISREGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND TO T HE FACT THAT THE APPELLANT IS NOT LIABLE TO THE SAME. RS.4,48,866/- 13. THAT THE RESPONDENT OFFICER ERRED IN LEVYING A SUM OF RS.5,640/- AS THE INTEREST U/S 234C OF THE INCOME TAX ACT, 1961 W ITH TOTAL DISREGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND TO THE FACT THAT THE APPELLANT IS NOT LIABLE TO THE SAME. RS.5,460/- 14. THAT THE RESPONDENT OFFICER ERRED IN LEVYING A SUM OF RS.3,744/- AS THE INTEREST U/S 234D OF THE INCOME TAX ACT, 1961 W ITH TOTAL DISREGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND TO THE FACT THAT THE APPELLANT IS NOT LIABLE TO THE SAME. RS.3,744/- BRIEF FACTS OF THE CASE ARE AS UNDER: 2. ASSESSEE IS AN HUF AND FILED ITS RETURN OF INCOM E ON 18/07/2014 DECLARING TOTAL INCOME OF RS.17,45,460/- . THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) AND 142(1) OF THE ACT WAS ISSUED TO ASSESSEE. IN RESPON SE TO STATUTORY NOTICES, REPRESENTATIVE OF ASSESSEE APPEARED BEFORE LD.AO AND FILED RELEVANT DETAILS AS CALLED FOR. 3. LD.AO NOTED THAT ASSESSEE DURING RELEVANT FINANC IAL YEAR HAD PURCHASED A SITE AT MEASURING 315 0 FT. AT 5 TH MAIN ROAD JAYAMALA EXTENSION BANGALORE FROM SRI.M.N.BELLIAPPA ALONG WITH 3 MORE PERSONS FOR SUM OF RS.53,16,000/- AND M/S.GA GAN CONSTRUCTIONS AND APARTMENTS. ASSESSEE IN HIS INDIV IDUAL CAPACITY, HELD GPA OF THE 3 INDIVIDUALS WHO HAD JOI NTLY SOLD THE PROPERTY TO ASSESSEE. LD.AO NOTED THAT THE VALUE OF SITE AS PER THE ITS DETAILS WAS RS.97,95,360/- AND ONE HALF REGISTR ATION FEE WAS CHARGED BY THE SUB REGISTRAR AMOUNTING TO RS.98,150 /-. LD.AO PAGE 4 OF 13 ITA NO.2058/BANG/2019 WAS OF THE OPINION THAT THE FAIR MARKET VALUE OF TH E SITE WAS THEREFORE RS.98,15,000/-. 4. LD.AO CALLED UPON ASSESSEE TO EXPLAIN THE DIFFER ENCE IN THE VALUE. ASSESSEE SUBMITTED THAT HE HAD ENTERED INTO SALE AGREEMENT AND PAID SUM OF RS.11,00,000/- ON 20/09/2 011 AND AGREE TO PURCHASE THE PROPERTY FOR GUIDELINE VALUE FIXED BY THE AUTHORITY AT THE TIME OF ENTERING INTO SALE DEED AG REEMENT. IT WAS SUBMITTED THAT, HUF ADVANCED SUM OF RS.42,32,117/- TO SH.M.N.BELLIAPPA INDIVIDUAL AS PROPRIETOR OF M/S.GA GAN CONSTRUCTIONS AND APARTMENTS, AND THAT, BALANCE OF RS.10,83,283/- WAS TRANSFERRED THAT THE TIME OF REG ISTRATION. IT WAS SUBMITTED THAT AGREEMENT TO SELL WAS DATED 20/0 9/2011. LD.AO OBSERVED THAT ASSESSEE PAID SUM OF RS.98,15,0 00/- FOR THE PROPERTY AND TREATED THE DIFFERENCE OF RS.44,99,000 /- AS UNDISCLOSED INCOME IN THE HANDS. 5. AGGRIEVED BY THE ADDITION, ASSESSEE PREFERRED AP PEAL BEFORE LD. CIT (A). LD. CIT (A) OBSERVED AS UNDER: 5.2.1 GROUNDS OF APPEAL NOS. 2 TO 4 ARE ALL RELATE D TO THE MERITS OF THE CASE AND ARE HENCE TAKEN UP TOGETHER. THE APPELLANT HAD ERRED INTO AN SALE AGREEMENT ON 20/09/2011 WITH THREE VENDORS WHO HAD EARLIER ENTERED INTO A JOINT DEVELOPMENT AGREEMENT WITH M/S GAGAN CONSTRUCTION AND APARTMENTS, THE PROPRIETARY CONCERN OF THE KART HA. VIDE THE AGREEMENT TO SELL, THE APPELLANT HUF AGREED TO PURC HASE ONE FLAT NO.001 IN THE BUILDING BEING CONSTRUCTED PURSUANT TO THE J DA. THE SALE DEED WAS SUBSEQUENTLY REGISTERED ON 26/07/2013. IN THE STATE MENT OF FACTS, THE APPELLANT HAS SUBMITTED THAT WHILE REGISTERING THE SALE DEED THE APPELLANT WAS MADE TO PAY A STAMP DUTY ON VALUE OF RS. 98,50, 000/- BY HIS ADVOCATE AND ALSO BY THE SUB REGISTRAR, EVEN THOUGH THE AGREED SALE CONSIDERATION RS. 53,16,000/- REPRESENTED THE PROPE R AND ADEQUATE FAIR MARKET VALUE. THE APPELLANT HAS CONTENDED THAT AS P ER THE PROVISO TO SECTION 56(2)(VII)(B) THE VALUE OF THE PROPERTY SHO ULD BE TAKEN AS ON THE DATE OF THE AGREEMENT TO SALE I.E. 20/09/2011. PER THE APPELLANT'S PAGE 5 OF 13 ITA NO.2058/BANG/2019 SUBMISSIONS, AS PER THE NOTIFICATION OF THE GOVERNM ENT OF KARNATAKA DATED 17/04/2007 WHICH WAS VALID TILL 25/09/2011, T HE VALUE OF THE PROPERTY AS PER THE LAND AND BUILDING METHOD WOULD BE RS. 43,16,370/- WHEREAS THE CONSOLIDATED VALUE OF THE APARTMENT WOU LD BE RS. 57,18,240/-, HENCE THE VALUE TAKEN IN THE AGREEMENT TO SELL I.E. RS. 53,16,000/- WAS THE FAIR MARKET VALUE. THE AO HOWEV ER HAS RELIED THE STAMP DUTY VALUE AS GIVEN IN THE SALE DEED DATED 26 /07/2013 WHICH SHOWS A VALUE OF RS. 98,12,500/-. 5.2.2 THE COPY OF THE SALE AGREEMENT AS WELL AS THE REGISTERED SALE DEED HAVE BEEN PERUSED. SECTION 56(2)(VII)(B) AS AMENDED W.E.F. 01/04/2014 IS REPRODUCED BELOW: (VII) WHERE AN INDIVIDUAL OR A HINDU UNDIVIDED FAMI LY RECEIVES, IN ANY PREVIOUS YEAR, FROM ANY PERSON OR PERSON OR PERSONS ON OR AFTER THE 1' DAY OF OCTOBER, 2009 (BUT BEFORE THE ] DAY OF APRIL, 20 17), (A) ANY SUM OF MONEY, WITHOUT CONSIDERATION, THE A GGREGATE VALUE OF WHICH EXCEEDS FIFTY THOUSAND RUPEES, THE WHOLE OF/L IE AGGREGATE VALUE U/SUCH SUM: (1,) ANY IMMOVABLE PROPERTY: (0 WITHOUT CONSIDERATION, THE STAMP DULY VALUE OF W HICH EXCEEDS FIFTY THOUSAND RUPEES, THE STAMP DUTY VALUE OF SUCH PROP ER: (II) FOR A CONSIDERATION WHICH IS LESS THAN THE ST AMP DULY VALUE OF THE PROPERTY BY AN AMOUNT EXCEEDING FIFTY THOUSAND RUPE ES, THE STAMP DUTY VALUE OF SUCH PROPERTY AS EXCEEDS SUCH CONSIDERATIO N: PROVIDED THAT WHERE THE DATE OF THE AGREEMENT FIXIN G THE AMOUNT OF CONSIDERATION FOR THE TRANSFER OF' IMMOVABLE PROPER TY AND THE DATE OF REGISTRATION ARE NOT THE SAME, THE STAMP DITTY VALU E ON THE DATE OF THE AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF' THIS SU B-CLAUSE: PROVIDED FURTHER THAT THE SAID PROVISO SHALL APPLY ONLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION REFERRED TO THEREIN, OR A PART THEREOF HAS BEEN PAID BY ANY MODE OTHER THAN CASH ON OR BEFORE THE D ATE OF THE AGREEMENT FOR THE TRANSFER OF SUCH IMMOVABLE PROPERTY: IN THE PRESENT CASE, THE PROVISIONS OF SECTION 50C REPRODUCED BELOW ARE- ALSO RELEVANT: SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION I N CERTAIN CASES. SOC. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUI NG AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING L AND T BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED FOR ASSESSA BLE) BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION RE FERRED TO AS THE STAMP VALUATION AUTHORITY) FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE] SHALL, FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF S UCH TRANSFER: PROVIDED THAT WHERE THE DATE OF THE AGREEMENT FIXIN G THE AMOUNT OF CONSIDERATION AND THE DATE OF REGISTRATION FOR THE TRANSFER OF THE CAPITAL ASSET ARE NOT THE SAME, THE VALUE ADOPTED PAGE 6 OF 13 ITA NO.2058/BANG/2019 OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AU THORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTIN G FULL VALUE OF CONSIDERATION FOR SUCH TRANSFER. PROVIDED FURTHER THAT THE FIRST PROVISO SHALL APPLY ONLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION, OR A PART THEREOF, HAS BEE N RECEIVED BY WAY OF AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT OR BY USE OF ELECTRONIC CLEARING SYSTEM THROUGH A BANK ACCOUNT, ON OR BEFORE THE DATE OF THE AGREEMENT FOR TRANSFER. THE SALE AGREEMENT DATED 20/09/2011 DOES NOT APPEAR HAVE BEEN REGISTERED AND NO STAMP DUTY VALUE IS MENTIONED THE REON. THEREFORE, THE VALUE OF RS. 53,16,000/- MENTIONED IN SALE AGREEMEN T DOES NOT CONSTITUTE THE STAMP DUTY VALUE AS ON THAT DATE. HENCE THE APP ELLANT'S CONTENTION THAT ITS CASE IS COVERED BY THE PROVISO TO SECTION 56(2) (VII) (B) IS NOT ACCEPTABLE. 5.2.3 FURTHER, AN EXAMINATION OF THE LEDGER ACCOUNT OF M/S GAGAN CONSTRUCTION AND APARTMENTS (THE PROPRIETARY CONCER N OF THE KARTHA) IN THE BOOKS OF THE APPELLANT AS. SEEN FROM THE ASSESS MENT RECORDS SHOWS THAT BETWEEN THE DATE OF THE SALE AGREEMENT AND THE REGISTRATION OF THE SALE 'DEED, THERE HAVE BEEN FUND TRANSFERS AMOUNTIN G TO RS. 94.59 LAKHS FROM THE APPELLANT HUF TO M/S GAGAN CONSTRUCTION AN D APARTMENTS. THEREFORE, THE VALUE SHOWN IN THE SALE AGREEMENT IS MUCH LESS THAN THE ACTUAL AMOUNT TRANSFERRED TO THE DEVELOPERS M/S GAG AN CONSTRUCTIONS. IT IS ALSO PERTINENT THAT THE KARTHA, SHRI M.N. BELLIA PPA HELD THE GPA FOR THE ORIGINAL VENDORS OF THE SITE. THE KARTHA HAS SIGNED THE SALE AGREEMENT AND THE SALE DEED IN THREE CAPACITIES I.E. GPA HOLD ER OF THE VENDORS, PROPRIETOR OF THE DEVELOPERS M/S GAGAN CONSTRUCTION AND APARTMENTS AND ALSO AS THE PURCHASER. THE DATE OF SALE AGREEMENT B EING ONE DAY BEFORE THE NOTIFICATION REVISING GUIDANCE VALUE WAS ISSUED ALSO RAISE A QUESTION MARK OVER ITS CREDIBILITY THE SALE DEED, AS NOTED B Y THE AO, WAS BASED ON ORAL SALE AGREEMENT BETWEEN THE APPELLANT AND THE O RIGINAL VENDORS FOR ACQUIRING THE SHARE OF LAND ON MUTUALLY AGREED TERM S AND CONDITIONS FOR A CONSIDERATION OF RS. 53,16,000/- IT IS MENTIONED IN THE SALE DEED THAT AN ADVANCE OF RS. 40,00,000/- WAS TRANSFERRED BY THE APPELLANT TO THE DEVELOPERS I.E. M/S GAGAN CONSTRUCTION AND APARTMENTS AND THE VENDORS HAVE AL SO CONFIRMED THE RECEIPT OF THE THE RECEIPT OF THE SAME. HOWEVER THE DATES OF FUND TRANSFER OF RS. 40,00,000 ARE NOT MENTIONED IN THE SALE DEED . 5.2.4 IT IS APPARENT FROM THE FOREGOING DISCUSSION THAT THE SALE AGREEMENT NOT BEING A REGISTERED DOCUMENT WAS DRAWN UP WITHOU T REFERENCE TO THE MARKET VALUE OF THE PROPERTY WHEREAS THE REGISTERED SALE DEED ACTUALLY REFLECTS THE FAIR MARKET VALUE OF THE PROPERTY. IN THE CASE OF BAGRI IMPEX P. LTD. VS AC'IT , CIRCLE-9, KOLKATA /20131 31 'TAXMAR LN.COM 39, THE HONBLE CALCUTTA HIGH COURT HAD HELD AS FOLLOWS: THE INTENTION OF THE PARLIAMENT IS THAT WHERE THE L AND OR BUILDING OR BOTH ARE SOLD OR OTHERWISE TRANSFERRED, SUCH TRANSFER-SH ALL BE DEEMED TO HAVE TAKEN PLACE ONLY AFTER THE STAMP DUTY HAS BEEN. ASS ESSED BY THE STATE PAGE 7 OF 13 ITA NO.2058/BANG/2019 GOVERNMENT, BECAUSE IT IS ON THE VALUATION MADE FOR THE PURPOSE OF STAMP DUTY THAT THE TAX IS PAYABLE UNDER THE INCOME-TAX A CT. THE AMENDMENT MADE IN THE YEAR 2009 MAY HAVE MADE THE THINGS SIMP LER, BUT THE INTENTION OF THE LEGISLATURE WAS VERY FROM THE BEGINNING THAT THE VALUE FOR THE PURPOSE OF INCOME TAX SHALL BE THE SAME AS THE VALUE LOT STAMP DUTY. THEREFORE THE AO'S ACTION IN BRINGING TO TAX THE DI FFERENCE BETWEEN THE AMOUNT MENTIONED IN THE SALE DEED AND FAIR MARKET V ALUE ADOPTED BY THE STAMP DUTY AUTHORITY AT THE TIME OF REGISTRATION IS JUSTIFIED. THE ADDITION MADE ON, THIS ACCOUNT IS UPHELD. THESE GROUNDS OF A PPEAL ARE THEREFORE DISMISSED. 6. AGGRIEVED BY ORDER OF LD.CIT(A) ASSESSEE IS IN A PPEAL BEFORE US. 7. LD.AR SUBMITTED THAT, ALL ISSUES RAISED ARE IN R ESPECT OF ADDITION OF RS.44,99,000/- AS INCOME CHARGEABLE TO TAX UNDER SECTION 56 (2)(VII) OF THE ACT. 8. LD.AR SUBMITTED THAT ASSESSEE PURSUANT TO THE AG REEMENT OF SALE DATED 20/09/2011 AGREED TO PURCHASE A RESID ENTIAL FLAT IN THE RESIDENTIAL COMPLEX BEING BUILT AT NO.39 (OLD N O.116/D) LOCATED AT 5 TH MAIN ROAD JAYAAHAL EXTENSION, MUNICIPAL WARD NO.92, BANGALORE ON THE 1 ST FLOOR WITH A BUILT UP AREA OF 21 60 FT. TOGETHER WITH UNDIVIDED SHARE IN THE LAND MEASURING 1063.34 FT. (OUT OF TOTAL AREA OF 3150 FT. OF LAND) FOR A TOTA L CONSIDERATION OF RS.53,16,000/- FROM M/S.GAGAN CONSTRUCTIONS. 9. LD.AR SUBMITTED THAT ASSESSEE PAID THE SALE CONS IDERATION ON FOLLOWING MANNER: RS.11,00,000/- ON THE DATE OF AGREEMENT TO SELL DAT ED 20/09/2011; BALANCE RS.42,16,000/- WAS PAID BEFORE THE DATE OF SALE DEED ON 26/07/2013; PAGE 8 OF 13 ITA NO.2058/BANG/2019 10. LD.AR SUBMITTED THAT, THE VENDOR BEING M/S.GAGA N CONSTRUCTIONS AND APARTMENTS WAS THE PROPRIETARY CO NCERN OF ASSESSEE IN HIS INDIVIDUAL CAPACITY. IT WAS SUBMITT ED BY LD.AR THAT ASSESSEE PAID RS.5,49,500/- TOWARDS STAMP DUTY @5.6% OF RS. 98,12,500/-AND REGISTRATION FEE OF RS.98,150/-. HE THUS SUBMITTED THAT, LD.AO MADE ADDITION IN THE HANDS OF ASSESSEE ON PRESUMPTION THAT, THE GUIDANCE VALUE AS ON THE DATE OF REGISTRATION WAS HIGHER THAN THE AGREEMENT VALUE BE CAUSE OF WHICH THE DIFFERENCE WAS ADDED IN THE HANDS OF ASSE SSEE. 11. LD.AR SUBMITTED THAT THERE WERE 2 NOTIFICATIONS THAT WERE ISSUED BY THE CENTRAL VALUATION COMMITTEE BEING: NOTIFICATION DATED 17/04/2007 BEARING NO. CVC/BUD/5/2006-07 W.E.F. 19/04/2007; AND NOTIFICATION DATED 21/09/2011 BEARING NO. CVC-19201 0-11 W.E.F. 26 SECTOR NO. 2011 12. HE SUBMITTED THAT AS PER THE NOTIFICATIONS THE GUIDANCE VALUE OF THE SAID PROPERTY WAS PURCHASED BY ASSESSE E WAS AS PER THE GUIDANCE VALUE APPLICABLE AT RELEVANT TIME.: PER NOTIFICATION DATED SITE IN BBMP PER SQ. FT CONSTRUCTION RATE PER SQ. FT. FOR FIRST FLOOR COMPOSITE RATE FOR APARTMENTS PER SQ. FT. 17.04.2007 WEF 19.4.2007 3,000/- 520/- 2,640/- 21.09.2011 WEF 26.9.2011 4,200/- 850/- 3,860/- 13. IT WAS SUBMITTED THAT THE SALE AGREEMENT WAS EN TERED ON 20/09/2011 AND THE GUIDANCE VALUE AS ON THE DATE PR ESCRIBED BY PAGE 9 OF 13 ITA NO.2058/BANG/2019 THE CENTRAL VALUATION COMMITTEE THAT PREVAILED DURI NG THE RELEVANT PERIOD WAS NOTIFICATION NO.CVC/BOD/5/2006- 07 DATED 17/04/2007. IT HAS BEEN SUBMITTED THAT THE VALUE AS PER THE SAID NOTIFICATION WAS RS.57,18,240/-ON A COMPOSITE BASES . 14. LD.AR SUBMITTED THAT ASSESSING OFFICER MADE ADD ITION IN THE HANDS OF ASSESSEE UNDER SECTION 56(2)(VII) OF THE A CT, AS DEEMED INCOME. HE SUBMITTED THAT LD.CIT(A) ALSO INVOKED PR OVISIONS OF SECTION 50C. 15. IT HAS BEEN SUBMITTED THAT, TRANSACTION DOES NO T FALL WITHIN THE PROVISIONS OF SECTION 56(2)(VII) OF THE ACT, AS ASSESSEE IN CAPACITY OF HUF IS THE RECIPIENT OF THE PROPERTY. L D.AR REFERRED TO CLAUSE (E) TO 3 RD PROVISO TO SECTION 56(2)(VII)(B) , TO SUBMIT THAT, THE DEFINITION OF RELATIVE, IN CASE OF AN HUF, IS ANY MEMBER THEREOF. LD.AR THUS ARGUED THAT, AS PER THE DEFINITION OF RE LATED AS INSERTED BY FINANCE ACT 2012 WITH RETROSPECTIVE EFF ECT FROM 01/10/2009, WHERE ANY AN HUF RECEIVES IN ANY PREVIO US YEAR ANY MONEY OR PROPERTY FROM ANY RELATIVE, THE PROVIS IONS SHALL NOT APPLY. IT WAS ALSO SUBMITTED THAT 50C IS APPLICABLE IN CAS E OF THE SELLER, WHEREAS, ASSESSEE IN PRESENT CASE IS THE PURCHASER. 16. HE THUS PRAYED FOR THE ADDITION TO BE DELETED O N BOTH THESE COUNTS. 17. ON THE CONTRARY LD.SR.DR PLACED RELIANCE ON ORD ERS PASSED BY AUTHORITIES BELOW. 18. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SI DES IN LIGHT OF RECORDS PLACED BEFORE US. PAGE 10 OF 13 ITA NO.2058/BANG/2019 AUTHORITIES BELOW REJECTED CONTENTIONS OF ASSESSEE FOR THE REASON THAT, THE DOCUMENT OF SALE WAS NOT REGISTERED AND N O STAMP DUTY VALUE WAS MENTIONED THEREON. IT IS SUBMITTED THAT E VEN THOUGH THE AGREEMENT HAS NOT BEEN REGISTERED, THE VALUE WA S AGREED BETWEEN THE PARTIES WAS RECEIVED AS MENTIONED ABOVE . LD.AO MADE DISALLOWANCE UNDER SECTION 50 C OF THE ACT IN THE HANDS OF ASSESSEE. 19. APPLICABILITY OF SECTION 56(2)(VII)(B) OF THE A CT, AS AMENDED BY FINANCE ACT, 2012 AND APPLICABLE TO AY 2014-15 I N QUESTION. ON A PERUSAL OF PRE-AMENDED PROVISIONS OF SECTION 5 6(2)(VII)(B)(II) OF THE ACT, WE GATHER THAT WHERE AN INDIVIDUAL OR H UF RECEIVES FROM ANY PERSON ANY IMMOVABLE PROPERTY FOR A CONSID ERATION , WHICH IS LESS THAN STAMP DUTY VALUE OF SUCH PROPERT Y THAT EXCEEDS RS.50,000/-AND THE STAMP DUTY VALUE OF SUCH PROPERTY EXCEEDS THE CONSIDERATION PAID, THE PROVISIONS OF PRE-AMENDED SECTION 56(2)(VII)(B) OF THE ACT WOULD APPLY. IN PR ESENT FACTS, THERE IS A CONSIDERATION PAID BY ASSESSEE HUF, TO THE VEN DOR(INDIVIDUAL MEMBER OF HUF) IN RESPECT OF THE SUBJECT PROPERTY T HAT IS LESS THAN THE STAMP DUTY VALUATION. IT HAS BEEN CONTENDED BY THE LD.AR THAT, THE TRANSA CTION IS EXEMPT FROM TAX AS THE TRANSFEROR AND TRANSFEREE AR E RELATIVE AS DEFINED IN C LAUSE (E)(II) TO 3 RD PROVISO TO SECTION 56(2)(VII) OF THE ACT. 20. BY FINANCE ACT, 2012, THE DEFINITION OF RELATIVE ALSO INCLUDE ANY SUM OR PROPERTY RECEIVED BY A HINDU UNDIVIDED F AMILY FROM ITS MEMBERS. THIS CONTENTION OF THE LD.AR THAT HUF CAN RECEIVE PROPERTY WITHOUT ATTRACTING TAX LIABILITY FROM ITS MEMBERS. PAGE 11 OF 13 ITA NO.2058/BANG/2019 DESERVES TO BE UPHELD. ADMITTEDLY THE TRANSFEROR AN D THE TRANSFEREE IN THE PRESENT FACTS OF THE CASE IS THE KARTA, HIS INDIVIDUAL CAPACITY AND THE HUF ITSELF. THEREFORE, THE ARGUMENT THAT, PROPERTY RECEIVED BY HUF FROM ITS MEMBERS, IS NOT CHARGEABLE TO TAX. 20. WE NOTE THAT CIT(A) RELIED ON PROVISIONS OF SEC TION 50C TO CONSIDER THE VALUE ADOPTED BY STAMP DUTY AUTHORITY ON THE DATE OF AGREEMENT. THIS PROVISION IS APPLICABLE IN CASE OF RECIPIENT OF SALE CONSIDERATION. PRESENT CASE, ASSESSEE IS THE P URCHASER. WE THEREFORE REJECT APPLICABILITY OF SECTION 50 C TO P RESENT FACTS. THE REVENUE IS THEREFORE DEBARRED TO HOLD THE TRANS ACTION UNDER SECTION 56(2)(VII)(B) AS TAXABLE. WE THUS DELETE TH E ADDITION SUSTAINED BY LD.CIT(A). ACCORDINGLY, GROUNDS RAISED BY ASSESSEE STANDS ALLO WED. IN THE RESULT APPEAL FILED BY ASSESSEE STANDS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH JANUARY, 2021 SD/- SD/- (B. R. BASKARAN) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL ME MBER BANGALORE, DATED, THE 19 TH JANUARY, 2021. /VMS/ PAGE 12 OF 13 ITA NO.2058/BANG/2019 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE PAGE 13 OF 13 ITA NO.2058/BANG/2019 DATE INITIAL 1. DRAFT DICTATED ON ON DRAGON SR.PS 2. DRAFT PLACED BEFORE AUTHOR -1-2021 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -1-2021 JM/AM 4. DRAFT DISCUSSEDAPPROVED BY SECOND MEMBER. -1-2021 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS -1-2021 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON -1-2021 SR.PS 7. DATE OF UPLOADING THE ORDER ON WEBSITE -1-2021 SR.PS 8. IF NOT UPLOADED, FURNISH THE REASON -- SR.PS 9. FILE SENT TO THE BENCH CLERK -1-2021 SR.PS 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER. 13. DRAFT DICTATION SHEETS ARE ATTACHED NO SR.PS