Atul Gupta, Delhi V. ACIT Circle 47(1), New Delhi

ITA 3384/DEL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6939 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 18-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; TDS; Capital Gains
• Section: 50C; 142(1); 13; 119; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A: NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE, SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO.3384/DEL/2019 (ASSESSMENT YEAR: 2015-16) SH. ATUL GUPTA 556, KATRA ISHWAR BHAWAN, KHARI BAOLI, DELHI PAN AAIPG 4327Q VS. ASST. CIT, CIRCLE- 47(1), NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SH. SALIL AGARWAL, ADV. SH. SHAILESH GUPTA, CA RESPONDENT BY SH. M. BARNWAL, SR. DR DATE OF HEARING 18.06.2020 DATE OF PRONOUNCEMENT 31.08.2020 ORDER PER SUDHANSHU SRIVASTAVA, JM: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST OR DER DATED 06.03.2019 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-16, NEW DELHI {CIT(A)} FOR ASSESSMENT YEA R 2015-16. 2.0 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSE SSEE IS AN INDIVIDUAL DERIVING INCOME FROM BUSINESS, SALARY, I NCOME FROM OTHER SOURCES AND ALSO INCOME FROM CAPITAL GAINS. THE RET URN OF INCOME 2 ITA NO.3384/DEL/2019 SH. ATUL G UPTA VS. ACIT FOR THE CAPTIONED YEAR WAS FILED DECLARING A NET TAX ABLE INCOME OF RS.44,94,880/-. THE CASE WAS SELECTED FOR LIMITED SC RUTINY AND THE REASONS FOR SCRUTINY SELECTION UNDER CASS WERE: I. UNSECURED LOANS FROM PERSONS WHO HAVE NOT FILED THEIR RETURN OF INCOME. II. SALES CONSIDERATION OF PROPERTY IN ITR LESS THA N SALES CONSIDERATION REPORTED IN FORM 26QB. 2.1 SUBSEQUENTLY, IN THE ASSESSMENT ORDER, THE AS SESSING OFFICER (AO) DID NOT MAKE ANY ADDITION ON ANY OF TH E TWO ISSUES FOR WHICH THE CASE WAS SELECTED FOR LIMITED SCRUTINY. TH E AO, HOWEVER, HAS NOT RESTRICTED HIMSELF TO THE ABOVE SAID SPECIF IC ISSUES FOR WHICH MADE AN ADDITION OF RS. 2,51,75,501/- U/S 50C OF T HE ACT AND ALSO MADE ANOTHER ADDITION OF RS. 8,36,298/- BY DISALLOWI NG THE TOTAL COST OF ACQUISITION OF ANOTHER LAND SOLD BY THE ASS ESSEE. 2.2 AGGRIEVED, THE ASSESSEE FILED THE FIRST APPEAL BEFORE THE LD. CIT (A) WHEREIN IT WAS CONTENDED THAT PROVISIONS OF SECTION 50C OF THE ACT WERE NOT AT ALL APPLICABLE AS THE ASSESS EE HAD NOT SOLD ANY ASSET BEING LAND OR BUILDING OR BOTH BUT HAD SO LD A CAPITAL ASSET IN THE FORM OF BOOKING RIGHTS/RIGHT TO ALLOTMENT OF FLAT ONLY. THE LD. CIT (A) VIDE THE IMPUGNED ORDER DELETED THE ADDITIO N OF RS. 3 ITA NO.3384/DEL/2019 SH. ATUL G UPTA VS. ACIT 8,36,298/- BUT SUSTAINED THE ADDITION OF RS. 2,51,7 5,501/-. BEFORE THE LD. CIT (A), THE ASSESSEE HAD ALSO DISPUTED THE JURISDICTION OF THE AO IN MAKING THE ADDITION OF RS.2,51,75,501 /- AND IT WAS CONTENDED THAT THE AO HAD TRAVELLED BEYOND THE SCOP E OF LIMITED SCRUTINY AS HE HAD ACTED WITHOUT TAKING ANY APPROVA L FROM THE LD. PRINCIPAL CIT /CIT AS PER THE MANDATE OF INSTRUCTIO NS ISSUED BY THE CBDT U/S 119 OF THE ACT VIDE INSTRUCTION NO. 5 OF 2 016 DATED 14 JULY 2016 AND ALSO INSTRUCTION NO. 20 0F 2015 DATED 29 DECEMBER 2015. THE LD. CIT (A), HOWEVER, HELD THAT THE AO HA D NOT EXCEEDED HIS JURISDICTION IN ANY WAY AND THAT HE HAD CONFINED HIS INQUIRY AND ADDITION TO THE ISSUE OF SALE CONSIDERATION OF THE PROPERTY. 2.3 THE ASSESSEE HAS NOW APPROACHED THIS TRIBUNAL A ND HAS CHALLENGED THE IMPUGNED ORDER BY RAISING THE FOLLOWI NG GROUNDS OF APPEAL: 1) THAT THE LEARNED CIT (APPEALS) HAS ERRED IN HOLDING THAT THE A.O. HAS NOT EXCEEDED HIS JURISDICTION UNDER LIMIT ED SCRUTINY IN THE INSTANT CASE. THAT THE LEARNED CI T (APPEALS) HAS FAILED TO APPRECIATE THAT THE A.O. DID NOT TAKE ANY ADMINISTRATIVE APPROVAL FROM THE PR. CIT BEFORE EXP ANDING THE SCOPE OF LIMITED SCRUTINY AND HAS THUS EXCEED ED HIS 4 ITA NO.3384/DEL/2019 SH. ATUL G UPTA VS. ACIT JURISDICTION UNDER LIMITED SCRUTINY BY FRAMING TH E IMPUGNED ASSESSMENT. B) THAT THE LEARNED CIT (APPEALS) HAS ERRED IN HO LDING THAT THE SALE CONSIDERATION DECLARED BY THE ASSESSE IN HIS R ETURN OF INCOME WAS LESS THAN THE SALE CONSIDERATION REFLECT ED IN FORM 26QB. THAT SUCH FINDING IS NOT BORNE OUT OF ANY MA TERIAL ON RECORD. 2) THAT THE LEARNED CIT (APPEALS) HAS ERRED IN UPHO LDING AN ADDITION OF RS.2,51,75,550 MADE BY THE A.O. BY WRO NGLY INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT T O THE TRANSACTION OF SALE OF RIGHT TO ALLOTMENT OF A RESI DENTIAL FLAT IN A PROJECT UNDER CONSTRUCTION BY A BUILDER . B) THAT THE LEARNED CIT (APPEALS) HAS ERRED IN FAIL ING TO APPRECIATE THAT THE TRANSACTION ENTERED INTO BY THE ASSESSE IS NOT A CASE OF SALE OF LAND OR BUILDING BUT ONLY SAL E OF RIGHT TO ALLOTMENT OF RESIDENTIAL FLAT IN A PROJECT WHICH WA S STILL UNDER CONSTRUCTION AND POSSESSION WAS NOT HANDED OVER TO THE ASSESSE OR ANYBODY ELSE BY THE BUILDER. C) THAT THE LEARNED CIT (APPEALS) HAS ERRED IN HOLD ING THAT THE CONSTRUCTION OF THE PROPERTY IS COMPLETE. THAT SUCH FINDING IS NOT BORNE OUT OF ANY MATERIAL ON RECORD AND THE LEARNED CIT (APPEALS) HAS ALSO ERRED IN ARBITRARILY BRUSHING A SIDE THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSE TO SHOW T HAT THE CONSTRUCTION OF THE PROJECT BY THE BUILDER WAS NOT COMPLETE EVEN 5 ITA NO.3384/DEL/2019 SH. ATUL G UPTA VS. ACIT TILL THE DATE OF HEARING OF THE APPEAL BY THE LEARN ED CIT(APPEALS). D) THAT THE LEARNED CIT(APPEALS) HAS ERRED IN ARBIT RARILY HOLDING THAT THE TRANSACTION OF SALE RIGHT TO ALLOT MENT BY THE ASSESSEE IS THE SALE OF LAND AND BUILDING AND HAS E RRED IN UPHOLDING THE INVOCATION OF SECTION 50C BY THE ASSE SSING OFFICER. 3) THAT THE LEARNED CIT(APPEALS) HAS FURTHER ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN AS SUMING THE ROLE OF DVO HIMSELF AND IN MAKING THE IMPUGNED ADDI TION WITHOUT MAKING ANY REFERENCE TO THE DVO BY THE ASSE SSING OFFICER. 3.0 THE LD. AUTHORISED REPRESENTATIVE (AR) SUBMI TTED THAT THIS CASE WAS PICKED UP FOR LIMITED SCRUTINY ONLY AND NO ADDITION WAS MADE AND NO ADVERSE INFERENCE WAS DRAWN BY THE AO IN RESPECT OF EITHER OF THE TWO ISSUES ON WHICH THE JURISDICTION F OR LIMITED SCRUTINY WAS VESTED IN THE AO. HE FURTHER SUBMITTED THAT IT WAS AN UNDISPUTED FACT THAT IN THE INSTANT CASE, THE AO HA D NOT OBTAINED THE REQUISITE PERMISSION FROM THE LD. PRINCIPAL CIT /CIT FOR EXPANDING THE SCOPE OF INQUIRY IN A LIMITED SCRUTIN Y CASE AND, THEREFORE, THE ASSESSMENT ORDER PASSED BY THE AO, M AKING 6 ITA NO.3384/DEL/2019 SH. ATUL G UPTA VS. ACIT ADDITIONS BEYOND THE SCOPE OF REASONS FOR WHICH THE LIMITED SCRUTINY WAS INITIATED, WAS NULL AND VOID AB INITIO . HE RELIED ON CBDT INSTRUCTION NO.5 OF 2016 DATED 14 TH JULY, 2016 AND INSTRUCTION NO. 20 OF 2015 DATED 29 TH DECEMBER, 2015. IT WAS FURTHER CONTENDED BY HIM THAT THE LD. CIT (A) IS FA CTUALLY WRONG IN HOLDING THAT THE SALE CONSIDERATION OF THE CIVIL LI NES PROPERTY REFLECTED IN THE ITR WAS LESS THAN THE SALE CONSIDER ATION REFLECTED IN FORM 26QB. HE DREW OUR ATTENTION TO THE COMPUTATION OF INCOME FORMING PART OF THE ITR OF THE ASSESSEE TO CONTEND THAT AS PER 26AS OF THE ASSESSEE, TDS CREDIT OF RS. 1,55,000/- WAS AP PEARING IN RESPECT OF THE SALE CONSIDERATION OF RS. 1,55,00,00 0/- RECEIVED BY THE ASSESSEE ON SALE OF HIS RIGHTS TO ALLOTMENT OF A FLAT IN CIVIL LINES AND THAT THE SAME WAS CLAIMED BY THE ASSESSEE AND DU LY ALLOWED TO HIM BY THE AO. HE FURTHER ARGUED THAT EVEN THE AO H AS NOT DISPUTED THIS FACT AND, THEREFORE, THE FINDING OF T HE LD. CIT (A) IN THIS REGARD WAS WHOLLY WRONG AND NOT BORNE OUT OF ANY MATERIAL ON RECORD. IT IS ALSO SUBMITTED BY THE LD. AR THAT THE ASSESSEE HAS NOT SOLD ANY LAND OR BUILDING BUT ONLY RIGHTS TO ALLOTM ENT OF A FLAT UNDER CONSTRUCTION, OF WHICH POSSESSION WAS NOT GIVEN BY TH E BUILDER AT 7 ITA NO.3384/DEL/2019 SH. ATUL G UPTA VS. ACIT THE TIME OF PURCHASE OR SALE BY THE ASSESSEE. THE L D. AR ARGUED THAT THE LD. CIT (A) HAS ERRED IN HOLDING THAT THE AO HAS NOT EXCEEDED HIS JURISDICTION. HE RELIED ON VARIOUS CAS E LAWS TO SUBMIT THAT ANY SUCH ASSESSMENT ORDER IN A LIMITED SCRUTIN Y CASE, WHERE THE ADDITIONS ARE MADE BEYOND THE SCOPE ON WHICH TH E LIMITED SCRUTINY WAS INITIATED, WITHOUT TAKING THE REQUISITE PERMISSION FROM THE LD. PR. CIT, IS NULL AND VOID AB INITIO AND THAT SUCH ASSESSMENT ORDER IS LIABLE TO BE QUASHED. 3.1 THE LD. AR FURTHER DREW OUR ATTENTION TO THE PROVISIONS OF SECTION 50C OF THE ACT AND SUBMITTED THAT THE SAME WERE APPLICABLE ONLY IN RESPECT OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH. AND THAT IN THIS CASE THE ASSESSEE HAS NEITHER SOLD ANY LAND NOR BUILDING NOR BOTH WHEN HE TRANSFERRED HIS RIGHTS TO ALLOTMENT OF RESIDENTIAL FLAT. IT WAS CONTENDED BY HIM THAT THE A SSESSEE HAD ACQUIRED THE RIGHTS TO ALLOTMENT OF FLAT WHICH WAS IN A PROJECT UNDER CONSTRUCTION AND HAD SOLD SUCH RIGHTS DURING THE IN STANT YEAR ON SAME BASIS WHEN THE PROJECT WAS STILL UNDER CONSTRUC TION. IT WAS ARGUED BY HIM THAT THE ASSESSEE NEVER GOT POSSESSIO N OF THE FLAT AS THE SAME WAS UNDER CONSTRUCTION BOTH AT THE TIME OF PURCHASE AS 8 ITA NO.3384/DEL/2019 SH. ATUL G UPTA VS. ACIT WELL AS AT THE TIME OF SALE BY HIM. THE LD. AR REITE RATED THAT THE ASSESSEE HAD ONLY PURCHASED BOOKING RIGHTS AND HAD SOLD THE SAME AS IT IS AND HAD EARNED AN AMOUNT OF RS.5,00,000/- WHICH WAS DECLARED AS CAPITAL GAINS INCOME IN THE ITR. HE ASS AILED THE FINDINGS OF THE LD. CIT (A) AND CONTENDED THAT THE LD. CIT ( A) HAS ERRED IN HOLDING THAT THE ENTIRE PAYMENT FOR THE FLAT HAD BE EN MADE AND THAT AS PER THE PAYMENT PLAN OF THE BUILDER, THE CONSTRU CTION OF THE PROPERTY WAS COMPLETE. THE LD. AR ARGUED THAT SUCH F INDINGS WERE DE HORS ANY MATERIAL ON RECORD. IT WAS FURTHER SUBMITTED TH AT ON THE CONTRARY, THE LD. CIT (A) HAD ERRED IN IGNORING SUB STANTIAL DOCUMENTARY EVIDENCES IN THE FORM OF RERA ORDERS DA TED 6-10- 2017 WHEREIN IT WAS RECORDED THAT THE CONSTRUCTION WAS NOT COMPLETE AND THAT THE BUILDER HAD QUOTED THE EXPECT ED DATE OF COMPLETION OF THE PROJECT AS DECEMBER 2019. HE FURT HER DREW OUR ATTENTION TO A PRESS CUTTING FROM THE NEWSPAPER TI MES OF INDIA DATED 14JANUARY 2019 TO SHOW THAT THERE WAS AN INORDI NATE DELAY IN COMPLETING THE CONSTRUCTION OF THE PROJECT IN WHI CH THE RIGHTS TO ALLOTMENT HAD BEEN PURCHASED AND SOLD BY THE ASSESS EE. HE ALSO SUBMITTED THAT THE FINDING REGARDING COMPLETE PAYME NT WAS ALSO 9 ITA NO.3384/DEL/2019 SH. ATUL G UPTA VS. ACIT WRONG AS THE LD. CIT (A) HAD FAILED TO APPRECIATE TH AT SUBSTANTIAL AMOUNTS WERE STILL TO BE PAID TO THE BUILDER IN RES PECT OF THE FLAT. IT WAS CONTENDED BY HIM THAT THE CAPITAL ASSET SOLD BY THE ASSESSEE WAS NEITHER LAND NOR BUILDING NOR BOTH AND, THEREFO RE, PROVISIONS OF SECTION 50C OF THE ACT WERE WRONGLY APPLIED BY THE A O IN RESPECT OF THE SALE OF RIGHTS TO ALLOTMENT OF FLAT IN AN UNDER CONSTRUCTION PROJECT. HE RELIED ON VARIOUS CASE LAWS INCLUDING A JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF KALPANA HA NSRAJ REPORTED IN102 TAXMANN.COM 228 TO CONTEND THAT WHERE THE CONSTRUCTION OF A FLAT WAS NOT COMPLETE AND THE ASSE SSEE HAD SOLD ONLY RIGHTS IN BOOKING OR RIGHTS TO ALLOTMENT, THEN IT CANNOT BE SAID THAT THE ASSESSEE HAD SOLD A RESIDENTIAL PROPERTY. HE ARGUED THAT THE LD. CIT (A) WAS NOT JUSTIFIED IN HOLDING THAT PR OVISIONS OF SECTION 50C WERE APPLICABLE TO THE SALE OF RIGHTS BY THE AS SESSEE. HE PRAYED FOR DELETION OF ADDITION MADE BY THE AO BY INVOKING PROVISIONS OF SECTION 50C. 3.2 THE LD. AR FURTHER ARGUED THAT THE LD. CIT ( A) HAD ERRED IN UPHOLDING THE ACTION OF THE AO IN MAKING A N ADDITION U/S 50C WITHOUT MAKING A REFERENCE TO THE DVO U/S 50C(2) OF THE ACT. IT 10 ITA NO.3384/DEL/2019 SH. ATUL G UPTA VS. ACIT WAS SUBMITTED BY HIM THAT THE ASSESSEE HAD DISPUTED THE PROPOSED ADDITION BEFORE THE AO IN HIS LETTER DATED 28/12/20 19 IN RESPONSE TO THE NOTICE OF THE AO DATED 27/12/2019 WHEN FOR TH E FIRST TIME THE AO HAD ISSUED SHOW CAUSE TO THE ASSESSE REGARDIN G ADOPTION OF CIRCLE RATES AND HAD PROPOSED TO ADOPT A CIRCLE RAT E OF RS.91,500/- PER SQUARE METER. THE LD. AR CONTENDED THAT THE ASS ESSEE HAD IMMEDIATELY DISPUTED THIS PROPOSAL AND HAD SUBMITTE D THAT THE CIRCLE RATES WERE IN RESPECT OF COMPLETED PROPERTY WHEREAS THE ASSESSEE HAD SOLD RIGHTS IN AN UNDER CONSTRUCTION P ROJECT AND, MOREOVER, EVEN THE LOCATION OF THE PROJECT WAS IN FR ONT OF A SLUM AREA AND, THEREFORE, THERE WAS NO JUSTIFICATION TO A PPLY THE PROPOSED CIRCLE RATES TO AN INCOMPLETE AND LYING DEAD PROJE CT. THE LD. AR DRAWING OUR ATTENTION TO THE LETTER DATED 28/12/2019 CONTENDED THAT THE LD. CIT (A) HAD ERRED IN HOLDING THAT THE ASSESSEE HAD NOT RAISED ANY DISPUTE AGAINST THE ADOPTION OF THE CIRC LE RATE BEFORE THE AO AND THAT THE AO WAS NOT REQUIRED TO MAKE ANY REF ERENCE TO THE DVO U/S 50C(2) OF THE ACT. HE RELIED ON VARIOUS CAS E LAWS TO SUPPORT HIS ARGUMENTS THAT IT WAS MANDATORY FOR THE AO TO HAVE 11 ITA NO.3384/DEL/2019 SH. ATUL G UPTA VS. ACIT MADE A REFERENCE TO THE DVO IN THIS CASE BEFORE MAK ING ANY ADDITION. 4.0 PER CONTRA, THE LD. DEPARTMENTAL REPRESENTAT IVE (DR) SUPPORTED THE ORDERS OF THE AO AND THE LD. CIT (A) AND SUBMITTED THAT THE ADDITION MADE BY THE AO WERE WITH IN THE SCOPE OF ISSUES ON WHICH THE LIMITED SCRUTINY WAS INITIATED IN THIS CASE. ACCORDING TO THE LD. DR, THE AO WAS FULLY JUSTIFIED IN MAKING THE IMPUGNED ADDITION OF RS.2,51,75,550/- AS THE VERIFI CATION OF SALE CONSIDERATION FORMED PART OF THE REASONS FOR INITI ATING THE LIMITED SCRUTINY. HE REFERRED TO THE NOTICE U/S 142(1) DATE D 06/02/2017 ISSUED TO THE ASSESSEE TO CONTEND THAT THE ASSESSEE WAS ASKED TO FURNISH DETAILS OF IMMOVABLE PROPERTIES SOLD DURING FINANCIAL YEAR 2014-15 ALONG WITH THE DOCUMENTARY EVIDENCES AND THA T IT WAS IN CONTINUATION OF SUCH INQUIRY THAT THE ADDITION WAS M ADE AND, THUS, IT CANNOT BE SAID THAT IT WAS OUTSIDE THE SCOPE OF L IMITED SCRUTINY. HE FURTHER SUPPORTED THE ORDER OF THE LD. CIT (A) T O CONTEND THAT THE PROVISIONS OF SECTION 50C WERE CORRECTLY INVOKED IN THIS CASE .HE FURTHER ARGUED THAT THERE WAS NO NEED TO MAKE A REF ERENCE TO THE DVO AS THE ASSESSEE HAD NOT RAISED ANY DISPUTE THAT THE CIRCLE 12 ITA NO.3384/DEL/2019 SH. ATUL G UPTA VS. ACIT RATES WERE HIGHER THAN THE MARKET PRICE. HE PRAYED FOR DISMISSING THE APPEAL OF THE ASSESSEE. 5.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAV E ALSO PERUSED THE MATERIAL ON RECORD. IT IS AN UNDIS PUTED FACT THAT THE INSTANT CASE WAS PICKED UP FOR LIMITED SCRUTINY ON TWO SPECIFIC ISSUES AS REPRODUCED IN PARA 2.0 ABOVE. IT IS ALSO AN UNDISPUTED FACT THAT NEITHER ANY PERMISSION WAS SOUGHT BY THE A O TO EXPAND THE SCOPE OF LIMITED SCRUTINY IN THE INSTANT CASE N OR SUCH PERMISSION WAS EVER GRANTED BY THE LD. PR.CIT/CIT I N THIS CASE TO INQUIRE INTO ANY OTHER ISSUE DURING ASSESSMENT PROC EEDINGS. THE AO, WHILE PASSING THE ASSESSMENT ORDER, HAS NOT DRAWN ANY ADVERSE INFERENCE AGAINST THE ASSESSEE ON EITHER OF THE TWO ISSUES ON WHICH THE CASE WAS PICKED UP FOR LIMITED SCRUTINY UNDER C ASS. THE ASSESSEE HAD CLAIMED TDS CREDIT OF RS.1,55,000/- U/ S 194IA OF THE ACT AND HAD DECLARED SALES CONSIDERATION OF RS.1,55 ,00,000/- IN HIS ITR. THE RATE OF TDS DURING THIS PERIOD WAS 1% UNDER SECTION 194IA OF THE ACT AND THE AMOUNT OF TDS IN THIS CASE IS RS. 1,55,000/- WHICH FULLY CORRESPONDS TO THE AMOUNT OF R.1,55,00,000/- DECLARED BY THE ASSESSE IN HIS ITR. THUS, IT CANNOT 13 ITA NO.3384/DEL/2019 SH. ATUL G UPTA VS. ACIT BE SAID THAT THE SALES CONSIDERATION DECLARED IN IT R IS LESS THAN THE ONE REPORTED IN FORM 26Q FILED BY BUYER. EVEN THE A O HAS NOT DISPUTED THIS FACT IN THE ASSESSMENT ORDER. LIKEWISE , NO ADVERSE INFERENCE HAS BEEN DRAWN BY HIM AGAINST THE ASSESSEE ON THE ISSUE OF UNSECURED LOANS. IN OUR CONSIDERED OPINION, THE FINDINGS OF THE LD. CIT (A) ON THIS ISSUE ARE NOT CORRECT AND THERE WAS NO VALID BASIS FOR THE AO TO INQUIRE INTO OTHER ISSUES WHILE CONDUCTING A LIMITED SCRUTINY, WITHOUT TAKING THE MANDATORY PERMI SSION FROM THE LD. PR.CIT. ON THESE FACTS, WHEN THE CBDT INSTRUCTIO NS DID NOT PERMIT THE AO TO TRAVEL BEYOND THE ISSUES WHICH ARE AUTHORISED BY THE BOARD IN THIS REGARD UNDER CASS, IT IS HELD THA T THE ADDITION MADE BY THE AO IS BEYOND HIS JURISDICTION. THE AO H AS TRAVELLED BEYOND HIS JURISDICTION WHEN HE HAS INVOKED THE PROV ISIONS OF SECTION 50C, WHEREAS HE ONLY HAD THE JURISDICTION TO VERIFY AS TO WHETHER THE SALES CONSIDERATION DECLARED BY THE ASSE SSE IN HIS ITR WAS LESS THAN THE AMOUNT REFLECTED IN FORM 26QB. ONC E HE WAS SATISFIED ON THIS ASPECT, HE OUGHT NOT HAVE TRAVELL ED BEYOND THIS WITHOUT OBTAINING THE MANDATORY PERMISSION FROM THE LD. PR.CIT TO DO SO IN TERMS OF THE ABOVE REFERRED CBDT INSTRUCTI ONS. THE FINDING 14 ITA NO.3384/DEL/2019 SH. ATUL G UPTA VS. ACIT OF THE LD. CIT (A) ON THIS ISSUE, THEREFORE, CANNOT BE UPHELD AND THE ASSESSEES FIRST GROUND OF APPEAL IS ALLOWED. 5.1 EVEN OTHERWISE, WE FIND THAT THE POSSESSION O F THE FLAT WAS NOT OFFERED BY THE BUILDER AS THE PROJECT WA S STILL UNDER CONSTRUCTION AS PROVED FROM THE ORDER OF RERA DATED 6-10-2017 BROUGHT ON RECORD BY THE ASSESSEE BOTH BEFORE THE A O AND THE LD. CIT (A). THUS, IT IS A CASE OF TRANSFER OF ONLY THE BOOKING RIGHTS OF A RESIDENTIAL FLAT IN AN UNDER CONSTRUCTION PROJECT. AS THE ASSESSEE DID NOT HAVE POSSESSION OF ANY IMMOVABLE PROPERTY, THER E WAS NO QUESTION OF SALE OF ANY LAND OR BUILDING OR BOTH. ON THESE FACTS, IN OUR CONSIDERED OPINION, THE PROVISIONS OF SECTION 5 0C ARE NOT APPLICABLE AS THE ASSESSEE HAS NEITHER SOLD ANY LAN D NOR ANY BUILDING OR BOTH. 5.2 SINCE IT HAS BEEN HELD BY US THAT THE PROVIS IONS OF SECTION 50C OF THE ACT ARE NOT APPLICABLE TO THE TR ANSACTION OF SELLING BOOKING RIGHTS/RIGHTS TO ALLOTMENT OF A FLA T, AS HAS BEEN DONE BY THE ASSESSEE IN THE INSTANT CASE, THE ISSUE OF M AKING REFERENCE OR NOT TO THE DVO BECOMES ACADEMIC AND IS NOT ADJUDICA TED HERE. 15 ITA NO.3384/DEL/2019 SH. ATUL G UPTA VS. ACIT 6.0 IN THE FINAL RESULT, THE APPEAL OF THE ASSES SE IS ALLOWED. ORDER PRONOUNCED ON 31/08/2020. SD/- SD/- (PRASHANT MAHARISHI) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31/08/2020 *DRAGON COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI