Sri Kant Thakur, Ranchi V. DCIT,Circle-3, Ranchi

ITA 285/RAN/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9749 (ITAT-RANCHI)
• Duration Of Justice: 6 month(s) 28 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 07-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P K MONDAL JCIT LD
• Assessee Lawyers: DEVESH PODDAR LD
• Keywords: Sale consideration of property below Jantri Value
• Section: 56(2)(vii)(b); 143(1); 6; 56

Judgement Text

1 ITA NO . 285/RAN/18 A.Y 2014 - 15 SHRI KANT THAKUR PAGE 1 IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH, RANCHI (BEFORE SHRI S. S. GODARA , J.M. & DR.A.L.SAINI, A.M.) IT A NO. 285 /RAN/1 8 : ASSTT. YEAR : 20 1 4 - 15 SHRI KANT THAKUR PAN: ADTPT8591M VS D.C.I.T, CIR - 3, RANCHI (APPELLANT) (RESPONDENT) APPELLANT / ASSESSEE BY : SHRI DEVESH PODDAR, ADVOCATE, LD.AR RESPONDENT /DEPARTMENT BY : SHRI P.K. MONDAL, J CIT/LD.DR DATE OF HEARING : 11 - 01 - 2019 DATE OF PRONOUNCEMENT: 22 - 0 2 - 2019 ORDER PER BENCH : THE CAPTIONED APPEAL FILED BY THE ASSESSEE , IS DIRECTED AGAINST THE ORDER DATED 11 - 06 - 2018 PASSED BY THE LD. COMMISSIONER OF INCOME - TAX (APPEALS), RANCHI , WHICH IN TURN ARISE OUT OF THE ORDER PASSED BY THE ASSESSING OFFICER U/S. 14 3(3) OF THE INCOME - TAX ACT, 1961 (IN SHORT, THE AC T) DATED 05 - 12 - 2016 . 2. GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS: 1. FOR THAT LD. C I T(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION MADE FOR DIFFERENCE IN THE PURCHASE PRICE AS PER STAMP DUTY VA L UATION AND ACTUAL CONSIDERATION P AID. PROVISION OF SECTION 5 6 (2)(VI I )(B) WERE APPLIED AND CONFIRMED BY LD. CIT(A) . 2. FOR THAT APPELLANT HAD BOOKED THE PREMISES FOR PURCHASE BY SIGNING A PURCHASE AGREEMENT AND MAKING AN ADVANCE PAYMENT OF RS. 50,000/ - ON 11 / 12/2002. THE PROPERTY PURCH ASED WAS UNDER CONSTRUCTION AND A F TER COMPLETION OF CONSTRUCTION NECESSARY CLEARANCES WAS OBTAINED FROM THE GOVERNMENT. REGISTRATION OF THE 2 ITA NO . 285/RAN/18 A.Y 2014 - 15 SHRI KANT THAKUR PAGE 2 PROPERTY WAS DONE IN THE YEAR 20L3 - 14, AS SUCH, STAMP DUTY WAS PAYABLE AS PER RATE PREVALENT ON 01 / 04/2013. 3. FOR THAT THE PROVISION OF SECTION 5 6 (2)( VII)(B) WAS NOT ATTRACTED SINCE PAYMENT WAS MADE FOR ADVANCE BY CHEQUE ON 09/08/2003. I N ANY CASE THE PROVISION OF SECTION 56(2)(VII)(B) CAN ONLY BE ATTRACTED FOR THE DEEDS EXECUTED AFTER 01/04/2014, SINCE, THE PROVIS ION WAS INTRODUCED BY FINANCE ACT 2013 INTRODUCED IN MAY 2013. 4. FOR THAT THE F INAL INSTALLMENT AMOUNT FOR THE PURCHASE OF THE PROPERTY WAS MADE IN THE YEAR 2011. IT WAS SINCE THEN THAT THE ASSESSEE WAS CHASING THE SELLER FOR REGISTRY, HOWEVER DUE T O THE ILL HEALTH OF THE SELLER, HE COULD NOT GET THE REGISTRY EXECUTED. AS A MATTER OF FACT, THE STAMPS WERE ALSO PURCHASED IN 2012 FOR THE REGISTRY, EVEN THEN ALSO THE SELLER WAS NOT IN THE POSITION TO GO TO THE RE GIST RY OFFICE FOR THE SAME. FINALLY, A FTER F EW MONTHS, THE ASSESSEE GOT THE REGISTRY STAMPS PERIOD EXTENDED TILL 2013 AND THE REGISTRY WAS EXECUTED AT THE RESIDENCE OF THE SELLER SINCE HE COULD NOT GO TO THE REGISTRAR OFFICE. AS SUCH, IN ALTERNATIVE, THE PROVISIONS OF SECTION 5 6 (2)(VII)(B) SHOULD NOT BE ATTRACTED TO THE CASE OF ASSESSEE . 5. FOR THAT INTEREST U/S 234A AND 23413 SHOULD H AVE BEEN CHARGED ON THE RETURNED INCOME AND NOT ON THE ASSESSED INCOME FOLLOWING THE DECISION OF HON'BLE JHARKHAND HIGH COURT. 6. FOR THAT OTHER GROUN DS I N DETAIL WILL BE ARGUED AT THE TIME OF HEARING 3 . GROUND NO S . 1 TO 4 RELATES TO CONFIRMATION OF ADDITION MADE ON ACCOUNT OF DIFFERENCE IN PURCHASE PRICE AS PER STAMP DUTY VALUATION AND ACTUAL CONSIDERATION PAID. 4. THE BRIEF FACTS QUA THE IS SUE ARE THAT THE APPELLANT, WHO HAD DECLARED INCOME FROM OTHER SOURCES, HAD FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2014 - 15 ON 06.03.2015 DECLARING INCOME OF RS. 56,04,270/ - . THE RETURN WAS PROCESSED U/S. 3 ITA NO . 285/RAN/18 A.Y 2014 - 15 SHRI KANT THAKUR PAGE 3 143(1) OF THE ACT. THE CASE WAS SELECTED FO R COMPLETE SCRUTINY UNDER COMPUTER ASSISTED SCRUTINY SELECTION (CASS). DURING THE SCRUTINY PROCEEDINGS T HE LD. ASS E SSING OFFICER HAS NOTED THAT THE APPELLANT HAD PURCHASED A PROPERTY REGISTERED ON 27.09.2013. THE PURCHASE CONSIDERATION OF THE PROPERTY W A S AT RS.17,90,000/ - WHILE THE VALUATION OF THE STAMP DUTY AUTHORITY OF THE PROPERTY WAS AT RS.37,40,000/ - . THE LD. ASSESSING OFFICER INVOKED PROVISIONS OF SECTION 56(2)( VII)(B) OF THE ACT AND ADDED THE DIFFERENCE OF RS.19,50,000/ - TO THE INCOME OF THE A PPELLANT. 5. ON APPEAL, LD. CIT(A) CONFIRMED THE ADDITION MADE BY A SSESSING O FFICER. AGGRIEVED, THE ASSESSE IS IN APPEAL BEFORE US. 6. W E HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT THE APPELLANT PURCHASED A PROPERTY THROUGH A REGISTERED DEED EXECUTED ON 27.09.2013. THE AGREEMENT OF PURCHASE OF THE SAID PROPERTY WAS EXECUTED ON 15 . 09.2001 AND THE ADVANCE OF RS.1 0,000/ - WAS PAID BY CHEQUE ON 09.08.2003. THE TOTAL CONSIDERATION FIXED FOR THE PROPERTY WAS RS. 17 ,19,000 / - . HOWEVER, AT THE TIME OF REGISTRATION THE STAM P DUTY VALUATION WAS AT RS. 37,40, 000/ - AS SUCH, LD. ASSESSING OFFICER ASSESSED RS.19.50,000 / - BEING THE DIFFERENCE BETWEEN STAMP DUTY VALUATION AND ACTUAL CONSIDERATION (RS.37,40,000 RS.17,19,000) UNDER THE HEAD INCOME FROM OTHER SOURCES AS PER PROVISION OF SECTION 56(2)(VII)(B) OF THE ACT . THE APPELLANT STATED THAT THE AGREEMENT WAS EXECUTED ON 15.09.2001 AND PAYMENT OF ADVANCE WAS MADE ON 09.08.2003 BY CHEQUE. THE PAYMENT MADE CONFIRMED THAT THE AGREEMENT FOR PURCHASE OF THE PROPERTY WAS MADE IN ANY CASE OF 09.08.2003. WE NOTE THAT PROVISIONS OF SECTION56(2)(VII)(B) OF THE ACT DOES NOT APPLY TO ASSESSEES CASE UNDER CONSIDERATION , AS THE ADVANCE PAYMENT WAS MADE ON 09 - 08 - 2003 AFTER THE AGREEMEN T MADE/EXECUTED ON 15 - 09 - 2001. IN ORDER TO INVOKE THE PROVISIONS OF SECTION 56(2)(VII)(B) , THE ASSESSE OU GH T TO HAVE PAID THE ADVANCE BEFORE THE AGREEMENT AS 4 ITA NO . 285/RAN/18 A.Y 2014 - 15 SHRI KANT THAKUR PAGE 4 EXECUTED. IN THIS CASE THE AGREEMENT WAS EXECUTED ON 15 - 09 - 2001 AND ADVANCE PAYMENT HAS NOT BEEN MADE PRIOR TO THIS AGREEMENT. HOWEVER, THE ADVANCE PAYMENT WAS MADE ON 0 9 - 0 8 - 2003, WHICH IS MUCH AFTER 15 - 09 - 2001. THEREFORE, THE PROVISIONS OF SECTION 56(2)(VII)(B) OF THE ACT DOES NOT APPLY TO ASSESSEES CASE UNDER CONSIDERATION. HOWEVER, WE NOTE TH AT THE ASSESSEES CASE UNDER CONSIDERATION RELATES TO PROVISIONS OF SECTION 56(2)(VII)( C ) OF THE ACT, WHICH STATES THAT AO MAY REFER THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER (D.V.O) TO DETERMINE THE FAIR VALUE. THEREFORE, WE REMIT THIS ISSUE BA CK TO THE FILE OF THE AO WITH THE DIRECTION TO FOLLOW THE PROVISIONS OF SECTION 56(2)(VII) ( C) PROVISO OF THE ACT AND TO ADJUDICATE THE ISSUE IN ACCORDANCE WITH THE LAW BY MAKING NECESSARY REFERENCE U/S. 50C(2) OF THE ACT TO THE DVO. 7 . IN THE RESULT , THE APPEAL OF THE ASSESSE IS ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONOUNCED IN THE OPEN COURT ON 22 - 0 2 - 2019 SD/ - SD/ - ( S. S. GODARA ) (DR. A.L.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 22 - 0 2 - 2019 *PRADIP (SR.PS) COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT/ ASSESSEE: SRI KANT THAKUR, SUKHDEO NAGAR, RATU ROAD, OPP: UPHAR CINERA, RANCHI - 834005. 2 THE RESPONDEN T/ REVENUE : THE D CIT , CIR - 3, RANCHI 3. THE CIT - , 4. THE CIT(A) - , 5. DR, RANCHI BENCHES, RANCHI TRUE COPY, BY ORDER, ASSISTANT REGISTRAR / SENIOR P.S ITAT, RANCHI BENCHES