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2023 (1) TMI 476 - AT - Income TaxRevision u/s 263 - provision of s.56(2)(vii)(b)(ii) was applicable inasmuch as the market value of the subject property, as per it s stamp value, as on the date of transfer, was rs. 127.56 lacs - addition being the assessee s share in the shortfall in the disclosed consideration, is liable to be assessed thereunder - HELD THAT - The assessee was fully aware that as the stamp duty had not been paid in full, the sale deed would not be registered. What purpose, then, one may ask, would it serve to present the document for registration paying duty on a part of the stamp value, i.e., knowing and being fully aware that the document, being insufficiently stamped, shall not be registered for that reason? It may be noted that the difference in valuation is huge, admitted, and undisputed. And not on account of a genuine, bona fide variation in value. Couple this with the payment of the stated consideration being only at 20% thereof, and the absence of an agreement, much less registered as required by law, and the position becomes very clear. The delivery of possession under the circumstances, despite recital to that effect in the sale deed, is, in contradistinction to Rakhi Agrawal 2020 (10) TMI 1115 - ITAT JABALPUR inconceivable. The genuineness of the transaction is thus validly doubted. The argument as to the applicability of Rakhi Agrawal Supra is, thus, for each of the separate reasons afore-stated , and which shall operate either in conjunction or without prejudice, misplaced. In fact, we have found the transaction as reflected in the sale deed dated 30/3/2013, citing reasons therefor, as not a genuine transaction. The date of delivery of possession in the instant case is on 07/6/213 or, in any case, not by 31/3/2013. The question, thus, is even not if the said decision covers in the instant case, but if the impugned transaction can be regarded as genuine, and have our approval? As explained by the Apex Court in McDowell Co. Ltd. 1985 (4) TMI 64 - SUPREME COURT the question in every such case to ask is not if there has been an infringement of law, which we have found it as so, but if it is an arrangement to which the judicial process can grant approval. The answer to which is clearly in the negative in the instant case. There is no answer or explanation to any of the questions set out earlier, also posed during hearing, nor forthcoming from the material on record, all of which irresistibly lead to the conclusion that the transaction under reference is not a genuine transaction, i.e., both was regards the date of possession as well as the disclosed sale consideration, even as the latter is rendered of little moment as the same is, where as in the instant case, not protected by an agreement, deemed by law as the stamp value as on the date of possession, which we have found both factually and legally to be during the previous year relevant to the current assessment year. Why, we have no manner of any doubt that the stated sale consideration is not the actual sale consideration and, therefore, the deeming of sec. 56(2)(vii)(b) shall apply. We say so, as afore-noted, in the conspectus of the case, on an examination of the entirety of the facts and circumstances thereof, all of which fall for consideration and, accordingly, have been taken into account. We are conscious, when we say so, that it is not necessary for us to state so inasmuch as the law, w.e.f. the current assessment year, deems the sale consideration, so that the two constitute two separate reasons in support of our conclusion/decision. It may be argued that, even so, the difference in value may well have been paid upon or prior to the execution of the sale deed and its presentation for registration on 30/3/2013. This is as, where so, the addition would in that case arise only for AY 2013-14, and not AY 2014-15, the current year. The argument, seemingly impressive, is misconceived. Going by the argument, the addition for AY 2013-14 would stand to be made u/s. 69, so that the argument of the deeming of s. 56(2)(vii)(b)(ii), which shall nevertheless hold, coming into effect only from AY 2014-15 would be of no moment. The stated proposition is in fact also not sustainable on facts. This is as, where so, the assessee would have, consistent with the probabilities of human conduct, paid the balance stamp duty the difference in value being known, and which is to be in any case paid, by 30/3/213, concluding thus the sale prior to presenting the document for registration on that date. That is, the non-payment of the stamp duty in full is, under the circumstances, indicative of non-payment of the unaccounted consideration, i.e., as is the stated, consideration, both of which get paid only in the following year. In other words, the given facts and circumstances of the case, taken into entirety, do not, on preponderance of human probabilities, support the proposition of payment of the undisclosed consideration during the previous year relevant to AY 2013-14. That apart, the argument is of no legal consequence as the deeming afore-said shall apply. We, in view of the foregoing, reiterate our finding of s. 56(2)(vii)(b)(ii) as being applicable in the facts and circumstances of the case for the current year. We decide accordingly, upholding the impugned addition. Assessee s appeal is dismissed.
Issues Involved:
1. Applicability of Section 56(2)(vii)(b)(ii) of the Income Tax Act, 1961. 2. Determination of the date of transfer for the immovable property. 3. Genuineness of the transaction. 4. Relevance and applicability of the decision in Rakhi Agrawal's case. Detailed Analysis: 1. Applicability of Section 56(2)(vii)(b)(ii) of the Income Tax Act, 1961: The primary issue in the appeal was whether the addition of Rs. 38.78 lacs under Section 56(2)(vii)(b)(ii) of the Income Tax Act, 1961 was justified. The assessee contended that the provision was not applicable as the sale deed was presented for registration on 30/3/2013, prior to the enactment of the provision. However, the Tribunal noted that the major portion of the payment was made in FY 2013-14, and the final registration occurred on 07/6/2013, making the provision applicable. The Tribunal upheld the addition, stating that the transaction was completed in FY 2013-14, and thus, Section 56(2)(vii)(b)(ii) was rightly invoked. 2. Determination of the Date of Transfer for the Immovable Property: The Tribunal examined whether the transfer of property could be considered to have occurred in FY 2012-13 or FY 2013-14. The assessee argued that the transaction was closed on 30/3/2013, but the Tribunal found that only 20% of the consideration was paid by that date, with the remaining 80% paid in FY 2013-14. The Tribunal emphasized that the date of registration (07/6/2013) is crucial for legal purposes, and thus, the transfer was deemed to have occurred in FY 2013-14. 3. Genuineness of the Transaction: The Tribunal questioned the genuineness of the transaction due to several factors: - Only 20% of the sale consideration was paid initially. - No sale agreement was produced. - The sale deed was not registered on the initial presentation due to insufficient stamp duty. - The Tribunal found it implausible that a seller would transfer possession without receiving the full consideration. These factors led the Tribunal to doubt the authenticity of the transaction, further justifying the addition under Section 56(2)(vii)(b)(ii). 4. Relevance and Applicability of the Decision in Rakhi Agrawal's Case: The assessee relied on the decision in Rakhi Agrawal's case to argue that the transaction was complete on 30/3/2013. However, the Tribunal distinguished the two cases, noting that in Rakhi Agrawal, the full consideration was paid, and the only issue was the registration delay due to stamp duty shortfall. In contrast, in the present case, only a fraction of the consideration was paid initially, and the transaction's genuineness was in doubt. Thus, the Tribunal concluded that the decision in Rakhi Agrawal was not applicable. Conclusion: The Tribunal upheld the addition of Rs. 38.78 lacs under Section 56(2)(vii)(b)(ii), finding that the transaction was completed in FY 2013-14, making the provision applicable. The Tribunal also questioned the genuineness of the transaction due to the payment structure and lack of supporting documents. The reliance on Rakhi Agrawal's case was deemed misplaced as the facts were materially different. Consequently, the assessee's appeal was dismissed.
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