2021 (6) TMI 443 - AT - Income Tax

Revision u/s 263 - stamp valuation adopted for sale of flats - assessee has adopted the incorrect sale value in the books of accounts and therefore the difference in sale value has to be added as per the provisions of Sec.43CA - assessee has not provided complete details of payments and the provisions of Sec. 43CA of the Act are applicable from A.Y 2014-15 . The assessee also has failed to produce any letter of allotment of flat specifying the area of the flat and relevant details - HELD THAT - The assessee has filed the requisite details in respect of flats which includes name of flat owner, date of booking, stamp duty payment dates, date of registration , agreement value and also market value as on the date of registration. Further the agreements of sale were filed in the course of hearing before the A.O. On perusal of the assessment order at page 1 Para 3 the assessing officer has made observations that in respect of the projects, the assesses has furnished the relevant details. The revenue is disputing on non conduct of enquiry, but we find the assessee firm has discharged its burden of proof on submitting the vital requisite details called for by the assessing officer by issue of statutory notice U/sec 142(1) of the Act along with the questioner which cannot be over looked. Since the information was available with the A.O in the course of the assessment, the A.O. has considered the facts, submissions and evidences filed and took a view. In the assessment proceedings the assessee has responded to the clarifications / quires raised by the A.O. and after verification and satisfaction of claims, the assessing officer has passed the order U/sec143(3) of the Act. The assessee firm has offered income on the sale transactions in the Asst Year 2013-14, and these facts are filed before the assessing officer and was accepted by the revenue. The payment of stamp duty and income on flats was offered in AY 2013-14 but only registrations happened on 7/05/2013 which falls in the Asst year 2014-15, Hence there is no loss of revenue to the Income tax department and the provisions of Sec 43CA of the Act are not applicable. Assessing officer order passed u/sec143(3) of the Act does not satisfy the twin conditions of erroneous and prejudicial to the interest of revenue and Accordingly, the revision order passed by the Ld.Pr.CIT is quashed - Decided in favour of assessee.

Summary

Issues Involved:
1. Validity of the order passed by the Principal Commissioner of Income Tax under section 263 of the Income Tax Act, 1961.

Analysis:
The appellant, a partnership firm engaged in the business of builder and developer, filed an appeal against the order of the Principal Commissioner of Income Tax (Pr. CIT)-20, Mumbai, under section 263 of the Income Tax Act, 1961. The Principal Commissioner found that the Assessing Officer (A.O) had not conducted appropriate inquiries relevant to the assessable income, leading to the assessment order being erroneous and prejudicial to the interest of revenue. The dispute arose from discrepancies in the sale value of flats as per the assessee's books and stamp valuation. The Principal Commissioner observed that the A.O had not undertaken any inquiry regarding the sale consideration of the flats claimed by the assessee, leading to the order being set aside for further examination of the value of the flats and evidences filed (Para 2).

During the appeal hearing, the appellant contended that the A.O had accepted the return of income after verifying the details provided by the assessee, and therefore, the provisions of Section 43CA of the Act should not be applicable. The appellant submitted various documents, including applications for flat allotment, bank statements, and sale agreements, to support their argument. The appellant argued that the income on flats had been offered in the earlier years, and the A.O had conducted necessary inquiries before passing the assessment order (Para 3).

The Tribunal analyzed the facts and documents submitted by the appellant, noting that the assessee had provided vital details to the A.O in response to statutory notices and questionnaires. The Tribunal found that the A.O had considered the submissions, verified the claims, and passed the assessment order under section 143(3) of the Act after due diligence. The Tribunal also observed that the income on sale transactions had been offered in the relevant assessment year, and there was no loss of revenue to the Income Tax department. Consequently, the Tribunal held that the A.O's order did not meet the criteria of being erroneous and prejudicial to the interest of revenue, leading to the quashing of the revision order passed by the Principal Commissioner (Para 5).

In conclusion, the Tribunal allowed the appeal filed by the assessee, thereby setting aside the order passed by the Principal Commissioner under section 263 of the Income Tax Act, 1961 (Para 6).