2020 (1) TMI 1717 - AT - Income Tax

Revision u/s 263 - stamp duty valuation exceeds total consideration hence higher stamp duty valuation should have been considered for taxation as per provisions of section 43CA - As per CIT(A) AO did not examine this crucial fact and as such assessment order was passed by the AO is erroneously in so far as it prejudicial to the interest of the Revenue - HELD THAT - The assessee has given evidence of allotment and booking by allotment letter and payment through bank prior to registration. Thus the assessee has discharged the onus cast upon it. CIT cannot disbelieve the same on the ground that the bank statement of the buyers are not on record. In our considered opinion there is nothing on record to suggest that bank statement contained bogus entries. It is also not a case that the Revenue has received any information that the buyers have not issued cheque and bank statement of the assessee show entries which are related to some other transaction. Moreover when these documents are on record and hence this aspect has been duly examined by the Assessing Officer in our considered opinion there is no occasion for learned CIT to exercise u/s. 263 of the Act As in compliance with sub-section 4 of section 43CA the assessee has duly received sums through bank and allotment letter are also on record. Hence when allotment letter/booking of the unit alongwith receipt of booking receipt through bank at an earlier period is already on record the value at the time of registration is not to be applied. CIT was fully conscious of the fact as he has all the details of the stamp value date of agreement/allotment and date of receipt of payment in assessee s bank statement. Hence when despite being aware that addition in this regard is not permissible he has asked the AO to further reexamine the issue by reference to the details available on record. In our considered opinion by way of above order dehorse any cogent material or reasoning learned CIT is directed the AO to make roving inquiry to somehow or other dislodge evidences duly on record that provisions of section 43CA are not applicable in the facts of the case. Accordingly in the background of the aforesaid precedent and discussion we set aside the order of learned CIT and decide the issue in favour of the assessee.

Summary

The appeal in this case was filed by the assessee against the order of the Commissioner of Income Tax (CIT) passed under section 263 of the Income Tax Act. The core issue revolved around the application of section 43CA of the Act concerning stamp duty valuation and total consideration in the context of the assessee's business as a builder and developer for the assessment year 2014-15.The key legal questions considered in the judgment were:1. Whether the Assessing Officer's order was erroneous and prejudicial to the interest of the Revenue due to the alleged oversight in considering higher stamp duty valuation as per section 43CA?2. Whether the assessee had adequately substantiated the allotment and booking of properties prior to registration, thereby justifying the non-application of section 43CA?The Appellate Tribunal analyzed the relevant legal framework, precedents, court's interpretation, key evidence, findings, application of law to facts, treatment of competing arguments, and conclusions as follows:The learned CIT issued a show cause notice under section 263, highlighting the discrepancy between stamp duty valuation and total consideration, alleging that the Assessing Officer had overlooked this crucial aspect. The assessee contended that the registration occurred in the impugned assessment year, while allotment and booking were done earlier. The assessee provided detailed submissions and documents to support the timing and valuation of transactions.The learned CIT, however, raised concerns regarding missing bank statements of buyers and the absence of specific details in allotment letters. He concluded that the Assessing Officer's order was erroneous and prejudicial to the Revenue's interest, setting aside the order on the issue of section 43CA.Upon hearing both parties, the Tribunal observed that the assessee had adequately demonstrated the allotment and booking of properties through allotment letters and bank statements. The Tribunal emphasized that the burden of proof had been discharged by the assessee, and the absence of buyers' bank statements did not invalidate the evidence presented.The Tribunal referenced section 43CA, emphasizing that the assessee had received payments through bank transactions, aligning with the provisions of the Act. It noted that the learned CIT's directive for further inquiry lacked substantive grounds, as the relevant evidence was already on record.Relying on legal precedents and the provisions of section 43CA, the Tribunal held in favor of the assessee, allowing the appeal and setting aside the learned CIT's order. The judgment was pronounced on January 14, 2020.In conclusion, the Tribunal's decision centered on the sufficiency of evidence provided by the assessee to support the timing and valuation of transactions, ultimately leading to the allowance of the appeal and rejecting the learned CIT's assertion of error in the Assessing Officer's order under section 263.