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2024 (5) TMI 1360 - AT - Income TaxAddition u/s 69 or 56(2)(vii)(b) - Difference between the guideline rate as prescribed by Stamp Valuation authority and actual purchase/registered during the year - HELD THAT - We find on a perusal of the 1st proviso to Section 56(2)(vii)(b) of the Act, that the same, therein, contemplates where the date of the agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of the agreement may be taken for the purpose of the aforesaid statutory provision. At the same time, the applicability of the 1st proviso is subject to the satisfaction of a pre-condition that can be traced in the 2nd proviso . The 2nd proviso to Section 56(2)(vii)(b) of the Act, contemplates that the 1st proviso shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by any mode other than cash on or before the date of the agreement for the transfer of such immovable property. Now testing the facts of the present case in the touchstone of the pre-conditions contemplated in the 1st proviso and 2nd proviso to Section 56(2)(vii)(b) of the Act, we find that the same are found to be duly satisfied. As is discernible from the records, we find that the assessee had vide a registered purchase deed acquired the title of a plot admeasuring 4000 sq. ft. in Danish Kunj Society from Danish Grih Nirman Sahkari Sanstha Maryadit, Bhopal for a consideration of Rs. 1,05,332/- on 02.03.2017. Originally an agreement to purchase the aforesaid plot was executed between the father of the assessee, viz. Late Shri Sundar Lal Gupta and Danish Grih Nirman Sahkari Sanstha Maryadit, Bhopal in the year 1991 for a consideration of Rs. 92,000/-(including development charges). The assessee was a nominee of the aforesaid purchase transaction. On a perusal of the purchase deed, it transpires that the same therein mentions that the subject plot No. DK-5/3 admeasuring 4000 sq. ft. (50 80) was allotted to a member having membership No.3128, which conforms with the details provided in the allotment certificate issued by the society to the assessee's father. Apart from that, the payment of the purchase consideration as stated in the aforesaid receipts dated 27.06.1991, 29.07.1992, and 12.09.1992 vide cheques/drafts are mentioned in the purchase deed. Also, payment of the balance development charges of Rs. 19,962/- that was paid by the assessee on 28.02.2017 is stated in the aforesaid purchase deed. Considering the aforesaid facts, we concur with the CIT(Appeals) that as the amount of purchase consideration for transferring the aforementioned immovable property, i.e. Plot No.DK-5/3 (admeasuring 4000 sq.ft) was fixed as per terms of the agreement to purchase executed between the assessee's father, viz. Late Shri Sundar Lal Gupta and Danish Grih Nirman Sanstha Maryadit, Bhopal in the year 1991 at Rs. 92,000/- (including development charges), which was paid vide cheques/drafts by the assessee's father over the period 27.06.1991 to 12.09.1992, therefore, the case of the assessee would fall within the exception carved out to the application of the aforesaid Section 56(2)(vii)(b) of the Act, i.e. as contemplated in the 1st proviso and 2nd proviso of the said statutory provision. We, thus, finding no infirmity in the view taken by the CIT(Appeals), uphold the same. Although the Ld. AR has raised an alternative contention, that as Section 56(2)(vii)(b) of the Act has been made available on the statute only vide the Finance Act, 2010 with retrospective effect from 01.10.2009 and thus, was not available on the statute when the agreement to purchase the subject property was executed between the assessee's father and the aforementioned society, i.e. in the year 1991, therefore, the said statutory provision on the said count itself could not have been triggered, but we refrain from dealing with the same. We say so, for the reason that as it is the appeal of the revenue before us, therefore, the aforesaid claim of the Ld. AR does not emanate from the order of the lower authorities and cannot be adjudicated in the course of the present proceedings. Addition made by the A.O u/s. 69 as unexplained investment, we concur with the CIT(Appeals) that as nothing is discernible from the record that would reveal any undisclosed investment made by the assessee towards the purchase of the subject property, therefore, no addition under the said statutory provision could have been validly made. CIT(Appeals) had observed that there is no evidence with the A.O. which would reveal that the investment made towards the purchase of the aforesaid plot was over and above the actual consideration that was paid by the assessee's father. Also, it is rightly observed by the CIT(Appeals) that as the difference between the stamp value of the subject property and the actual purchase consideration is only the deemed/notional income, therefore, the same could not have been brought with the meaning of unexplained investment u/s. 69 of the Act. Thus, the Ground of appeal No.1 raised by the revenue is dismissed in terms of our aforesaid observations. CIT(Appeals) had admitted additional evidence in violation of the procedure contemplated in Rule 46A(3) of the Appellate Tribunal Rules, 1963 - We are unable to find favor with the same. On a perusal of the order of the CIT(Appeals) read along with the documents that have been pressed into service by him for vacating the addition made by the A.O, we find that the said documents as had been stated by the assessee in his paper book filed before us, i.e. Sr. No.1 to 10 were filed before the A.O. Nothing to the contrary has been brought to our notice by the Ld. D.R. Thus, the Grounds of appeal No.2, 3 4 raised by the revenue are dismissed.
Issues Involved:
1. Deletion of addition u/s 69 of the Income Tax Act, 1961. 2. Admission of additional evidence by CIT(A) without providing a copy to the AO. 3. Admission of additional evidence under Rule 46A(1) without remanding back the matter to the AO. 4. Violation of Rule 46A(3) of the Income Tax Rules, 1962. 5. General grounds. Summary: Issue 1: Deletion of Addition u/s 69 The AO observed that the assessee purchased an immovable property for Rs. 1,05,332/-, while its stamp value was Rs. 1,11,52,200/-. The AO added the difference of Rs. 1,10,46,868/- as unexplained investment u/s 69 of the Act, asserting that the income had escaped assessment within the meaning of Section 56(2)(vii)(b) of the Act. The CIT(A) deleted this addition, noting that the property was originally purchased by the assessee's father in 1991 for Rs. 92,000/- and the consideration was paid by cheque. The CIT(A) held that the provisos to Section 56(2)(vii)(b) were applicable, and thus, the stamp duty value on the date of the agreement (1991) should be considered, not the registration date (2017). Therefore, the addition u/s 56(2)(vii)(b) was not justified, and consequently, the addition u/s 69 also failed. Issue 2: Admission of Additional Evidence The revenue contended that the CIT(A) erred in admitting additional evidence regarding the acquisition of property by the assessee's father without providing a copy to the AO during the assessment proceedings, thereby violating Rule 46A(3) of the Income Tax Rules, 1962. The Tribunal found that the documents were indeed filed before the AO, and hence, the CIT(A) did not violate Rule 46A(3). Issue 3: Admission of Additional Evidence under Rule 46A(1) The revenue argued that the CIT(A) admitted additional evidence under Rule 46A(1) without remanding the matter back to the AO for verification. The Tribunal observed that the documents were already part of the record, and thus, there was no need for remand. Issue 4: Violation of Rule 46A(3) The Tribunal found no merit in the revenue's claim of violation of Rule 46A(3) as the documents were already submitted to the AO during the assessment proceedings. Issue 5: General Grounds The general grounds raised by the revenue were dismissed as not pressed. Conclusion: The Tribunal upheld the CIT(A)'s decision, dismissing the revenue's appeal and confirming that the addition of Rs. 1,10,46,868/- u/s 56(2)(vii)(b) and u/s 69 was not justified. The Tribunal also found no procedural violations in the admission of additional evidence by the CIT(A). The appeal of the revenue was dismissed.
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