PALANIAPPAN LAKSHUMANAN CHETTIAR, METTUPALAYAM V. ACIT, NCC - 8 (1), CHENNAI

ITA 2129/CHNY/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5805 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2016-2017
• Appeal Filed On: 18-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Valuation report; Capital Gains
• Section: 154; 143(3); 50C; 56(2); 201; 143(2); 43; 20

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI . . . , ' , ' BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA NO.2129/CHNY/2019 ( ( /ASSESSMENT YEAR: 2016-17 SHRI PALANIAPPAN LAKSHUMANAN CHETTIAR, 3/181, GANGAI AMMAN KOIL STREET, METTUPALAYAM-600 077. V . THE ASST. COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE-8(1), CHENNAI-600 034. [PAN: ADNPC 4871 F ] ( + /APPELLANT) ( ,-+ /RESPONDENT) + . / APPELLANT BY : MR.M.NARAYANAN, RETD. ACIT ,-+ . /RESPONDENT BY : MS.R.ANITHA, JCIT . /DATE OF HEARING : 13.11.2019 . /DATE OF PRONOUNCEMENT : 10.02.2020 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER : THIS APPEAL FILED BY ASSESSEE IS DIRECTED AGAINST APPELLATE ORDER DATED 20.05.2019 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-9, CHENNAI (HEREINAFTER CALLED THE CIT(A )), IN ITA NO.39/CIT(A)-9/2018-19 FOR ASSESSMENT YEAR (AY) 20 16-17, THE APPELLATE PROCEEDINGS BEFORE LEARNED CIT(A) HAD ARISEN FROM A SSESSMENT ORDER DATED 28.12.2018 PASSED BY LEARNED ASSESSING OFFIC ER (HEREINAFTER CALLED THE AO) U/S.143(3) OF THE INCOME-TAX ACT, 1961 ( HEREINAFTER CALLED THE ACT). ITA NO.2129/CHNY/2019 :- 2 -: 2. THE SHORT ISSUE AGITATED BEFORE TRIBUNAL BY ASSE SSEE IS WITH RESPECT TO ADDITIONS BEING MADE BY AUTHORITIES BELOW ON ACCOUN T OF DIFFERENCE BETWEEN SALE CONSIDERATION OF PROPERTY PURCHASED BY ASSESSEE AND THE GUIDELINE VALUE OF THE SAID PROPERTY FOR STAMP DUTY PURPOSES, BY INVOKING PROVISIONS OF SECTION 56(2)(VII) OF THE 1961 ACT. B RIEFLY STATED FACTS OF THE CASE ARE THAT ASSESSEE IS IN BUSINESS OF HIR ING/ LEASING OF HEAVY DUTY CRANES AND OTHER EQUIPMENTS UNDER A PROPRIETA RY CONCERN NAMELY M/S.SUNDARAM MOVERS. THE CASE OF THE ASSESSEE WAS SELECTED FOR FRAMING SCRUTINY ASSESSMENT THROUGH CASS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS CONDUCTED BY AO U/S 143(3) READ WITH SE CTION 143(2) OF THE 1961 ACT, THE AO OBSERVED THAT DURING PREVIOUS YEAR RELEVANT TO IMPUGNED ASSESSMENT YEAR 2016-17, THE ASSESSEE HAD PURCHASED VACANT LANDS AT THAMAL II VILLAGE, KANCHEEPURAM TALUK, KAN CHEEPURAM DISTRICT, TAMIL NADU ADMEASURING 7 ACRES 98 CENTS , VIDE REGI STERED SALE DEED DATED 15.07.2015(DOC. NO. 1164/205) FOR TOTAL CONS IDERATION OF RS. 3,51,12,000/-. THE AO OBSERVED THAT GUIDELINE VALU E OF AFORESAID PROPERTY WAS RS.3,64,15,000/-. THE AO INVOKED PROVI SIONS OF SEC.56(2)(VII) OF THE 1961 ACT AND OBSERVED THAT GU IDELINE VALUE OF THE SAID PROPERTY OF RS. 3,64,15,000/- IS REQUIRED TO B E ADOPTED AS THE VALUE FOR WHICH AFORESAID PROPERTY HAS BEEN ACQUIRED BY T HE ASSESSEE AND THE DIFFERENTIAL BETWEEN GUIDELINE VALUE AND SALE CONSI DERATION IS TO BE BROUGHT TO TAX UNDER THE PROVISIONS OF SECTION 56(2 )(VII) OF THE 1961 ACT . ITA NO.2129/CHNY/2019 :- 3 -: THE ASSESSEE SUBMITTED BEFORE AO THAT GUIDELINE VAL UE OF THE AFORESAID PROPERTY ON 15.07.2015 WAS RS. 3,64,15,000/- WHICH WAS LATER REVISED DOWNWARD BY STATE GOVERNMENT ON 09.06.2017 TO RS. 2 ,43,98,050/- . IT WAS SUBMITTED THAT DIFFERENTIAL BETWEEN GUIDELINE V ALUE ON THE DATE OF SALE AND THE SALE CONSIDERATION WAS ONLY RS. 13,03,000/- , WHICH IS LESS THAN 5%. THE ASSESSEE ALSO SUBMITTED BEFORE AO THAT AME NDMENT HAS TAKEN PLACE BY FINANCE ACT, 2018 , WHEREIN THERE COULD BE A DIFFERENCE UP-TO 5% BETWEEN GUIDELINE VALUE AND THE SALE CONSIDERATION WHICH SHALL NOT BE TREATED AS INCOME UNDER DEEMING FICTION OF SECTION 56(2) OF THE 1961 ACT. THE ASSESSEE ALSO REQUESTED AO TO REFER THE MATTER TO VALUATION CELL TO FIND OUT THE CORRECT VALUE OF THE PROPERTY. 1.2 THE AO OBSERVED THAT THE ASSESSEE HAS CLAIMED T HAT THERE WAS SUBSEQUENTLY REDUCTION IN THE GUIDELINE VALUE BY ST ATE GOVERNMENT FOR STAMP DUTY PURPOSES, BUT AO WAS OF THE VIEW THAT PR OVISIONS OF THE 1961 ACT HAS TO BE APPLIED AND HENCE GUIDELINE VALUE ON THE DATE OF REGISTRATION SHALL PREVAIL . THE AO WAS ALSO OF THE VIEW THAT AM ENDMENT IN SECTION 50C AND 56(2) OF THE 1961 ACT WERE A SUBSEQUENT EVENT A ND WAS NOT APPLICABLE ON THE DATE OF REGISTRATION /TRANSFER IN THE INSTANT CASE. FURTHER, IT WAS OBSERVED THAT STAMP DUTY AUTHORITIES REVISED GUIDELINE VALUE SUBSEQUENTLY WHILE GUIDELINE VALUE ON THE DATE OF T RANSFER IS TO BE APPLIED. THE AO REFERRED THE MATTER TO VALUATION CELL FOR VA LUING THE PROPERTY AS ON 15.07.2015 AND THE VARIATION ,IF ANY RESULTING FRO M THE REFERENCE WILL BE ADOPTED AND ASSESSMENT WILL BE REVISED U/S 154 AS P ROVIDED U/S 155(15) ITA NO.2129/CHNY/2019 :- 4 -: OF THE 1961 ACT. SINCE THE VALUATION REPORT WAS NOT RECEIVED BY THE AO ON THE DATE OF FRAMING SCRUTINY ASSESSMENT, THE AO MAD E ADDITIONS TO THE TUNE OF RS. 13,03,000/- IN THE HANDS OF THE ASSESSE E, VIDE ASSESSMENT ORDER DATED 28.12.2018 PASSED BY AO U/S 143(3) OF T HE 1961 ACT. 2.1 AGGRIEVED BY AN ASSESSMENT FRAMED BY THE AO U/S 143(3) OF THE 1961 ACT, THE ASSESSEE FILED FIRST APPEAL WITH LEARNED C IT(A), WHICH APPEAL FILED BY ASSESSEE WAS DISMISSED BY LD.CIT(A) WHO WAS PLEA SED TO CONFIRM THE ADDITIONS AS WERE MADE BY THE AO KEEPING IN VIEW TH E PROVISIONS OF SEC. 56(2)(VII) OF THE ACT. THE CONTENTION OF THE ASSES SEE THAT AMENDMENT TO SEC. 56(2) MADE BY FINANCE ACT, 2018 W.E.F. 01.04.2 019 SHOULD BE TREATED AS RETROSPECTIVE WAS REJECTED BY LD.CIT(A) AND ADDITIONS STOOD CONFIRMED BY LEARNED CIT(A) , VIDE APPELLATE ORDER DATED 20.05.2019 PASSED BY LEARNED CIT(A). 3.0 AGGRIEVED BY AN APPELLATE ORDER DATED 20.05.201 9 PASSED BY LEARNED CIT(A), THE ASSESSEE HAS FILED AN APPEAL BEFORE TRI BUNAL. THE LD. COUNSEL FOR ASSESSEE SUBMITTED BEFORE THE BENCH THAT DIFFER ENCE IN THE GUIDELINE VALUE AS ON THE DATE OF REGISTRATION OF PROPERTY A ND ACTUAL SALE CONSIDERATION WAS RS. 13,03,000/-, WHICH IS LESS THAN 5%. IT WAS SUBMITTED THAT SEC. 56(2) WAS AMENDED BY FINANCE AC T, 2018 W.E.F. 01.04.2019, WHEREIN, IN THE CASES WHERE DIFFERENCE BETWEEN THE GUIDELINE VALUE AND ACTUAL SALE CONSIDERATION IS UPTO 5% , TH E SAME SHALL BE IGNORED ITA NO.2129/CHNY/2019 :- 5 -: AND NO ADDITION CAN BE MADE TO THE INCOME OF THE AS SESSEE BY INVOKING DEEMING FICTION CREATED OWING TO DIFFERENTIAL BETWE EN SALE CONSIDERATION AND GUIDELINE VALUE. IT WAS SUBMITTED THAT THIS AM ENDMENT WAS MADE TO RATIONALIZE PROVISIONS OF SEC.50C OF THE 1961 ACT W ITH A VIEW TO REDUCE HARDSHIP TO BUYERS AND SELLERS OF REAL ESTATE , AND ACCORDINGLY NO ADDITION SHOULD BE MADE IN THE HANDS OF THE ASSESSEE. IT WA S SUBMITTED THAT MATTER WAS REFERRED BY AO TO VALUATION CELL BUT NO VALUATION REPORT HAS BEEN RECEIVED. IT WAS ALSO SUBMITTED THAT GUIDELINE VALUE WAS SUBSEQUENTLY REDUCED BY GOVERNMENT ITSELF. THE LD.D R ON THE OTHER HAND SUBMITTED THAT AMENDMENT TO SEC.50C SHALL APPLY PRO SPECTIVELY FROM 01.04.2019. 4. WE HAVE CONSIDERED RIVAL CONTENTIONS AND PERUSED MATERIAL ON RECORD. WE HAVE OBSERVED THAT ASSESSEE IS IN THE BUSINESS O F HIRING/ LEASING OUT OF HEAVY DUTY CRANES AND OTHER EQUIPMENTS UNDER PROPR IETARY CONCERN NAMELY M/S.SUNDARAM MOVERS. THE ASSESSEE PURCHASED VACANT LAND ADMEASURING 7 ACRES 98 CENTS AT THAMAL II VILLAGE, KANCHEEPURAM TALUK, KANCHEEPURAM DISTRICT, TAMIL NADU , VIDE REGISTERE D SALE DEED DATED 15.07.2015 FOR A TOTAL CONSIDERATION OF RS. 3,51,12,000/- (VIDE REGISTERED DOCUMENT NO.1164/2015),WHILE GUIDELINE VALUE OF THE PROPERTY FIXED BY STATE GOVERNMENT FOR STAMP DUTY PURPOSES WAS RS. 3,64,15,000/- AS ON 15.07.2015 . THE SAID GUIDELINE VALUE WAS LATER REDUCED ON 09. 06.2017 BY ITA NO.2129/CHNY/2019 :- 6 -: STATE GOVERNMENT ITSELF TO RS.2,43,98,050/- ON 09.0 6.2017 , AS CLAIMED BY ASSESSEE BEFORE BOTH THE AUTHORITIES BELOW AND N ONE OF THE AUTHORITIES DISPUTED THIS CONTENTION OF THE ASSESSEE AND EVEN B EFORE US IT IS NOT AGITATED BY LEARNED DR. THE DIFFERENTIAL IN THE GUI DELINE VALUE VIS--VIS ACTUAL SALE CONSIDERATION WAS ONLY RS. 13,03,000/- WHEN THE SALE TRANSACTION TOOK PLACE IN 2015, WHICH IS AROUND 3.7 11% WHICH IS LESS THAN 5%. THE ASSESSEE HAD OBJECTED TO GUIDELINE VALUE B EING ADOPTED BY THE AO FOR THE PURPOSES OF SECTION 56(2)(VII) OF THE 19 61 ACT. THE AO REFERRED THE MATTER TO VALUATION CELL FOR DETERMINING THE VA LUE OF THE SAID PROPERTY AS ON 15.07.2015 FOR THE PURPOSES OF COMPUTING INCO ME U/S 56(2)(VII), BUT THE VALUATION REPORT WAS NOT RECEIVED AND THE A SSESSMENT WAS FRAMED BY THE AO STATING THAT THE SAID ASSESSMENT WILL BE LATER AMENDED AFTER RECEIPT OF VALUATION REPORT BY INVOKING PROVISIONS OF SECTION 154 AND 155(15) OF THE 1961 ACT. EVEN BEFORE US, THE REVENU E HAS NOT PRODUCED THE SAID VALUATION REPORT WHILE IT WAS INCUMBENT ON REVENUE TO HAVE PRODUCED SAID REPORT. EVIDENCE WHICH COULD BE PRODU CED BUT WHICH ARE WITHHELD , THE PRESUMPTION WILL BE DRAWN AGAINST PE RSON WHO IS IN POSITION TO PRODUCE THE EVIDENCE BUT WHO WITHHELD THE SAME. SEC. 56(2)(VII) IS A DEEMING PROVISION, WHICH CREATES AN ARTIFICIAL FICT ION BY DEEMING INCOME IN THE HANDS OF THE BUYER OF IMMOVABLE PROPERTY, WH ERE THE VALUE OF SALE CONSIDERATION OF IMMOVABLE PROPERTY IS LESS THAN GU IDELINE VALUE BY MORE THAN RS.50,000/-, THEN THE GUIDELINE VALUE HAS TO BE TAKEN AS THE VALUE OF PROPERTY FOR BRINGING TO TAX INCOME U/S 56(2)(VI I) OF THE 1961 ACT UNDER ITA NO.2129/CHNY/2019 :- 7 -: THE HEAD INCOME FROM OTHER SOURCES IN THE HAND OF BUYER OF THE PARTY. LATER ON WITH A VIEW TO MINIMIZE HARDSHIP IN REAL ESTATE TRANSACTIONS IN THE HANDS OF THE BUYER AND SELLER, AMENDMENTS WERE BROUGHT IN BY FINANCE ACT, 2018 W.E.F. 01.04.2019 APPLICABLE FROM AY: 2019-20 IN SECTION 50C AND 56(2), WHEREIN IN CASE THE DIFFEREN TIAL BETWEEN GUIDELINE VALUE FIXED BY STATE GOVERNMENT FOR STAMP DUTY PURP OSES AND ACTUAL SALE CONSIDERATION IS UPTO 5% , THEN THE SAME SHALL NOT BE DEEMED TO BE INCOME FOR THE PURPOSES OF SECTION 56(2) AND ALSO F OR SECTION 50C OF THE 1961 ACT. NO DOUBT SECTION 56(2)(VII) IS A DEEMING SECTION AND ARTIFICIAL FICTION IS CREATED WHEREIN IN CASE OF DIFFERENTIAL BETWEEN THE GUIDELINE VALUE AND SALE CONSIDERATION EXCEEDING RS. 50,000, THE SAME SHALL BE DEEMED TO BE INCOME IN THE HANDS OF PURCHASER AND T HERE IS NO DOUBT THE DEEMING SECTION HAS TO BE GIVEN FULL PLAY BUT THE L AW CANNOT BE ALLOWED TO OPERATE IN VACCUM DE-HORSE GROUND REALITIES . IT HA S TO OPERATE WITHIN THE REALM OF REALITIES OTHERWISE, THERE WILL BE ABSURDI TIES LEADING TO PERVERSITIES WHICH NO COURT WILL BE PART OF ACCEPTI NG SUCH ABSURDITIES/PERVERSITIES. THE STATE GOVERNMENT WHO IS EMPOWERED TO DEAL WITH LOCAL PROPERTY MATTERS HAVE REALIZED THAT MARK ET VALUE OF THE PROPERTIES HAVE FALLEN AND GUIDELINE VALUE WAS BROU GHT DOWN IN TUNE WITH REALITIES IN REAL ESTATE DECLINING MARKET VALUES AN D GUIDELINE VALUE OF THIS PROPERTY WAS REDUCED TO RS. 2.44 CRORES AS ON 09.06 .2017. IN THE INSTANT CASE BEFORE US, THE DIFFERENTIAL BETWEEN SALE CONSI DERATION AND GUIDELINE VALUE IS MEAGER 3.711% WHICH IS LESS THAN 5% WHEN T HE SALE TRANSACTION TOOK PLACE IN 2015. THE FINANCE ACT, 2018 MADE AMEN DMENTS IN SECTION ITA NO.2129/CHNY/2019 :- 8 -: 50C AND 56 OF THE 1961 ACT AND EXTRACT OF BUDGET SP EECH AND NOTES ON CLAUSES ARE REPRODUCED HEREUNDER: INCENTIVE FOR REAL ESTATE 149. CURRENTLY, WHILE TAXING INCOME FROM CAPITAL GAINS, BUSINESS PROFITS AND OTHER SOURCES IN RESPECT OF TRANSACTIONS IN IMM OVABLE PROPERTY, THE CONSIDERATION OR CIRCLE RATE VALUE, WHICHEVER IS HI GHER, IS ADOPTED AND THE DIFFERENCE IS COUNTED AS INCOME BOTH IN THE HANDS O F THE PURCHASER AND SELLER. SOMETIMES, THIS VARIATION CAN OCCUR IN RESP ECT OF DIFFERENT PROPERTIES IN THE SAME AREA BECAUSE OF A VARIETY OF FACTORS INCLUDING SHAPE OF THE PLOT AND LOCATION. IN ORDER TO MINIMIZE HARDSHIP IN REAL ESTATE TRANSACTION, I PROPOSE TO PROVIDE THAT NO ADJUSTMEN T SHALL BE MADE IN A CASE WHERE THE CIRCLE RATE VALUE DOES NOT EXCEED 5% OF THE CONSIDERATION. THE NOTES ON CLAUSES TO FINANCE BILL, 2018 READS AS UNDER: CLAUSE 19 OF THE BILL SEEKS TO AMEND SECTION 50C O F THE INCOME-TAX ACT RELATING TO SPECIAL PROVISION FOR FULL VALUE OF CON SIDERATION IN CERTAIN CASES. THE SAID SECTION PROVIDES THAT IN CASE OF TRANSFER OF A CAPITAL ASSET BEING LAND OR BUILDING OR BOTH, THE VALUE ADOPTED OR ASSE SSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY FOR THE PURPOSE OF PA YMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER SHALL BE TAKEN AS THE FULL VALUE OF CONSIDERATION FOR THE PURPOSES OF COMPUTATION OF CAPITAL GAINS IF THE SAME IS MORE THAN THE FULL VALUE OF CONSIDERATION. IT IS PROPOSED TO INSERT A PROVISO TO SUB-SECTION ( 1) OF THE SAID SECTION SO AS TO PROVIDE THAT WHERE THE VALUE ADOPTED OR ASSES SED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY DOES NOT EXCEED ONE H UNDRED AND FIVE PER CENT OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER, THE CONSIDERATION SO RECEIVED OR ACCRUING AS A RESU LT OF THE TRANSFER SHALL, FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION. THIS AMENDMENT WILL TAKE EFFECT FROM 1ST APRIL, 201 9 AND WILL, ACCORDINGLY, APPLY IN RELATION TO THE ASSESSMENT YEAR 2019-2020 AND SUBSEQUENT YEARS. CLAUSE 21 OF THE BILL SEEKS TO AMEND SECTION 56 OF THE INCOME-TAX ACT RELATING TO INCOME FROM OTHER SOURCES. CLAUSE (X) OF SUB-SECTION (2) OF THE SAID SECTION, INTER ALIA, PROVIDES THAT WHERE ANY PERSON RECEIVES, IN ANY PREVIOUS YEAR, FR OM ANY PERSON OR PERSONS ON OR AFTER THE 1ST DAY OF APRIL, 2017, ANY IMMOVABLE PROPERTY, FOR A CONSIDERATION WHICH IS LESS THAN THE STAMP DU TY VALUE OF THE PROPERTY BY AN AMOUNT EXCEEDING FIFTY THOUSAND RUPEES, THE S TAMP DUTY VALUE OF ITA NO.2129/CHNY/2019 :- 9 -: SUCH PROPERTY AS EXCEEDS SUCH CONSIDERATION SHALL B E CHARGED TO TAX UNDER THE HEAD 'INCOME FROM OTHER SOURCES'. IT IS PROPOSED TO AMEND THE SAID CLAUSE OF SUB-SECT ION (2) OF THE SAID SECTION SO AS TO PROVIDE THAT WHERE ANY PERSON RECE IVES ANY IMMOVABLE PROPERTY FOR A CONSIDERATION, THE STAMP DUTY VALUE OF THE PROPERTY AS EXCEEDS SUCH CONSIDERATION, IF THE AMOUNT OF SUCH E XCESS IS MORE THAN FIFTY THOUSAND RUPEES OR THE AMOUNT EQUAL TO FIVE PER CEN T OF THE CONSIDERATION, WHICHEVER IS HIGHER, SHALL BE CHARGED TO TAX UNDER THE HEAD 'INCOME FROM OTHER SOURCES'. THIS AMENDMENT WILL TAKE EFFECT FROM 1ST APRIL, 201 9 AND WILL, ACCORDINGLY, APPLY IN RELATION TO THE ASSESSMENT YEAR 2019-2020 AND SUBSEQUENT YEARS. THUS, AS COULD BE SEEN SIMULTANEOUS AMENDMENTS WERE MADE IN THE 1961 ACT BY AMENDING PROVISIONS OF SECTION 50C AND 56(2) OF THE 1961 ACT BY FINANCE ACT, 2018 W.E.F. 01.04.2019 WHICH AR E APPLICABLE FROM AY: 2019-20 WITH A VIEW TO MINIMIZE HARDSHIP TO BUYERS AND SELLERS IN REAL ESTATE TRANSACTIONS AND WHERE THE DIFFERENTIAL IS UP TO 5% BETWEEN THE GUIDELINE VALUE AND THE ACTUAL SALE CONSIDERATION , THE SAID DIFFERENTIAL SHALL NOT BE DEEMED AS INCOME UNDER THE DEEMING FIC TION OF SECTION 50C AND 56(2) OF THE 1961 ACT . THE AFORESAID AMENDMEN T WAS MADE W.E.F. 01.04.2019 AND SHALL BE APPLICABLE EFFECTIVE FROM A Y: 2019-20 . HOWEVER WE NOTE THAT THIS AMENDMENT WAS TO MINIMIZE HARDSHI P FACED BY BUYERS AND SELLERS IN REAL ESTATE TRANSACTION WHEREIN THE LAW MAKERS HAVE TAKEN NOTE OF THE HARDSHIPS FACED BY BUYERS AND SELLERS I N REAL ESTATE TRANSACTIONS AND SUITABLY AMENDED THE LAW TO MEET W ITH GROUND REALITIES . THE STATE GOVERNMENT HAS ALSO NOTED THE HARDSHIPS F ACED BY PARTIES IN REAL ESTATE TRANSACTIONS AND BROUGHT DOWN THE GUIDE LINE VALUE IN 2017. IN THE INSTANT CASE BEFORE US, FIRSTLY THE DIFFERENTIA L IS ONLY 3.711% WHICH IS ITA NO.2129/CHNY/2019 :- 10 -: LESS THAN 5% AND THERE CANNOT BE PRECISION IN ALL T HE CASES THAT CONSIDERATION SHOULD BE SAME OR HIGHER THAN GUIDELI NE VALUE AS THERE ARE SEVERAL FACTORS WHICH DETERMINE THE ACTUAL SALE CON SIDERATION , SECONDLY THE ASSESSEE CHALLENGED GUIDELINE VALUE BEING ADOPT ED BY THE AO FOR THE PURPOSES OF SECTION 56(2)(VII) OF THE 1961 ACT AND MATTER WAS REFERRED BY AO TO VALUATION CELL BUT REPORT OF THE DVO IS NOT B ROUGHT ON RECORD BY REVENUE EVEN BEFORE US WHILE IT WAS INCUMBENT ON RE VENUE TO BRING ON RECORD REPORT OF DVO, THIRDLY THE STATE GOVERNMENT HAS ITSELF REDUCED THE GUIDELINE VALUE IN 2017 WHICH IS INDICATOR OF THE F ACT THAT THE MARKET VALUE OF THE PROPERTY WAS LOWER THAN GUIDELINE VALUE WHIC H ASPECT IS TAKEN NOTE BY STATE GOVERNMENT AND AMENDMENTS WERE MADE IN GUI DELINE VALUE IN TUNE WITH MARKET PRICE ALBEIT IN 2017 WHILE WE ARE PRESENTLY SEIZED OF AY: 2016-17 , FOURTHLY AMENDMENTS WERE MADE BY FINANCE ACT,2018 IN SECTION 56(2) WHERE IN DIFFERENTIAL UPTO 5% WAS ALL OWED AND NO ADDITIONS BE MADE UNDER DEEMING FICTION OF SECTION 56(2) OF T HE 1961 ACT ALBEIT IT IS APPLICABLE FROM AY: 2019-20 ONWARDS AND FIFTHLY NO INCRIMINATING EVIDENCE IS BROUGHT ON RECORD BY REVENUE WHICH COULD EVIDENC E THAT ASSESSEE IN FACT PAID HIGHER SALE CONSIDERATION THAN THE ACTUAL SALE CONSIDERATION RECORDED IN REGISTERED SALE DOCUMENT ALBEIT WE ARE AWARE THAT SECTION 56(2) IS DEEMING SECTION AND REVENUE IS NOT OBLIGAT ED TO BRING ON RECORD ANY INCRIMINATING MATERIAL IN SUCH CIRCUMSTANCES TO PROVE THAT ACTUAL SALE CONSIDERATION PAID BY TAX-PAYER IS HIGHER THAN THAT RECORDED IN SALE DOCUMENT , THUS KEEPING IN VIEW CUMULATIVE EFFECT OF OUR AFORESAID REASONINGS , WE DELETE THE ADDITIONS AS WERE MADE B Y THE AO WHICH WAS ITA NO.2129/CHNY/2019 :- 11 -: LATER CONFIRMED BY LEARNED CIT(A) AS WE ARE OF THE VIEW THAT LAW CANNOT OPERATE IN VACCUM DE-HORSE GROUND REALITIES WHICH U NDER THE SURROUNDING CIRCUMSTANCES IN THE INSTANT CASE LEAD TO ONE AND O NLY ONE IRRESISTIBLE CONCLUSION THAT THE ADDITIONS AS WERE MADE BY AUTHO RITIES BELOW ARE NOT SUSTAINABLE IN THE EYE OF LAW. WE ORDER ACCORDINGL Y. 5. IN THE RESULT, THE APPEAL FILED BY ASSESSEE IN I TA NO.2129/CHNY/2019 FOR AY: 2016-17 IS ALLOWED. ORDER PRONOUNCED ON THE 10 TH DAY OF FEBRUARY, 2020 IN CHENNAI. SD/- SD/- ( . . . ) ( N.R.S. GANESAN ) /JUDICIAL MEMBER ( ' ) ( RAMIT KOCHAR ) /ACCOUNTANT MEMBER /CHENNAI, 2 /DATED: 10 TH FEBRUARY, 2020. TLN . ,'3 43 /COPY TO: 1. + /APPELLANT 4. 5 /CIT 2. ,-+ /RESPONDENT 5. 3 , /DR 3. 5 ( ) /CIT(A) 6. ( /GF