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2020 (12) TMI 609 - AT - Income TaxValidity of revisional jurisdiction u/s. 263 - invocation of provisions of Sec.43CA - assessee sold flat for 24 Lacs as against stamp duty value (SDV) of 31.45 Lacs which would attract the provisions of Sec.43CA which was not considered by Ld. AO - HELD THAT - After going through the terms of the agreement it is evident that specific purchase rights were created in favor of purchaser in a specific property. This being the case the subsequent execution of sale / conveyance deed and handing over the possession would merely be improvement in the existing title of the purchaser. The same is supported by the fact that whole of the sale consideration was already received by the assessee by May 2012 which fall in financial year 2012-13. AR has made a statement that no sale deed or conveyance deed was executed in FY 2013-14. The sale has been offered in this year only due to the fact that the assessee was following project completion method. Undisputedly the provisions of Sec.43CA were applicable only from AY 2014-15. It is another fact that details of agreement value as well as stamp duty value was already placed before Ld. AO during the course of original assessment proceedings and Ld. AO chose not to invoke the provisions of Sec. 43CA. This being the case the revisional jurisdiction as exercised by Ld. Pr.CIT could not be sustained in the eyes of law. The primary condition to invoke the provisions of Sec.263 remains unfulfilled - Decided in favour of assessee.
Issues: Validity of revisional jurisdiction u/s. 263, Applicability of Sec.43CA to a property transaction, Consideration of alternate contentions by Pr. CIT
Validity of Revisional Jurisdiction u/s. 263: The assessee challenged the revisional jurisdiction exercised by the Pr. Commissioner of Income-Tax-2, Thane for AY 2014-15. The Pr. CIT invoked Sec.263, alleging that the assessing officer's order was erroneous and prejudicial to revenue as Sec.43CA provisions were not considered regarding the sale of a flat. The assessee contended that the assessment order was not erroneous or prejudicial to revenue. The Pr. CIT was criticized for not considering the appellant's alternate contentions. The Tribunal carefully considered the submissions and material on record, including precedents cited. The assessment order lacked discussion on issues considered during assessment proceedings, leading to the Pr. CIT's intervention. The Tribunal ultimately quashed the revisional order, restoring the assessment by the assessing officer. Applicability of Sec.43CA to a Property Transaction: The case involved the sale of a flat by the assessee, a builder & developer, where the Pr. CIT invoked Sec.43CA due to the sale price being lower than the stamp duty value. The assessee argued that the sale occurred before Sec.43CA's applicability period (from AY 2014-15) and followed the project completion method for tax purposes. The Pr. CIT contended that the agreement to sell in 2012 did not convey ownership, triggering Sec.43CA. However, the Tribunal found that the registered agreement created specific purchase rights, with the sale consideration received in the earlier financial year. As Sec.43CA applied only from AY 2014-15, and the AO had the agreement and stamp duty values but did not invoke Sec.43CA, the Tribunal ruled in favor of the assessee, quashing the revisional order. Consideration of Alternate Contentions by Pr. CIT: The Pr. CIT was faulted for not considering the appellant's alternate contentions and passing the order under Sec.263 allegedly in contravention of the law. Despite the assessee's submissions on the property transaction, the Pr. CIT upheld the applicability of Sec.43CA based on the agreement's nature. The Tribunal found the Pr. CIT's decision lacking legal basis as the assessing officer had all relevant details but did not apply Sec.43CA. Consequently, the Tribunal allowed the appeal, emphasizing that the revisional jurisdiction under Sec.263 was unjustified in this case. This detailed analysis of the judgment highlights the issues, arguments, and the Tribunal's decision, providing a comprehensive understanding of the legal aspects involved in the case.
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