2024 (7) TMI 722 - AT - Income Tax

Addition u/s 56(2)(vii) - assessment order of one of the joint owner, being the son of the assessee, has been passed by department accepting the contentions - HELD THAT - In the present case we found that Agreement /MOU for sale of Plot were entered on 31/07/2008. This agreement/MOU is also not disputed by the Authorities below. On going through the Agreement/MOU we also found that Advance of Rs. 1,00,000/- claimed to have received by the Shejawadkar Builders Pvt. Ltd. (Seller) vide Cheque dated 31/07/2008 of Indian Bank, Hubli. Revenue contention is that the first payment of Rs. 1,00,000/- was only made on 11.05.2009 by the assessee and that to one Suresh Enterprises. AR on the other hand submitted that the amount was actually paid by the Akshay Thakkar s bank account (Son of the assessee) on 02/08/2008 who is also the joint purchaser even though he was not a party to the Agreement/ MOU for Sale of Plot on dated 31/07/2008. Since in the case of the assessee s son the assessment order u/s 147 of the Act dated 23.03.2022 was passed accepting the contentions of one of the joint purchaser of the property, then the same needs to be extended to other purchaser (the assessee) also. The revenue cannot take different view for different parties involved in the same transaction. Therefore, we remit the issue to the file of the AO to take decision on the basis of the assessment order dated 23/03/2022 passed in the case of his son Mr. Akshay Nagesh Thakkar. Appeal filed by the assessee is allowed for statistical purposes.

Issues:
- Interpretation of provisions of section 56(2)(vii) of the Income Tax Act, 1961.
- Justification of addition under Section 56(2)(vii) based on payment dates and agreement terms.
- Consistency in treatment of joint purchasers in the same transaction.

Issue 1: Interpretation of provisions of section 56(2)(vii) of the Income Tax Act, 1961

The case involved a dispute regarding the application of section 56(2)(vii) of the Income Tax Act, 1961, for Assessment Year 2015-16. The dispute arose from the difference between the stamp duty valuation and the purchase consideration of a property jointly purchased by the assessee and his son. The contention centered around the date of agreement and the payment made in relation to the property transaction. The Assessing Officer (AO) added an amount under section 56(2)(vii) based on the interpretation of the agreement terms and payment dates. The Commissioner of Income Tax (Appeals) upheld the addition, emphasizing the importance of the actual purchase date and the payment details in determining the tax liability. The Tribunal considered the relevant provisions of section 56(2)(vii) and the specifics of the case to arrive at a decision.

Issue 2: Justification of addition under Section 56(2)(vii) based on payment dates and agreement terms

The Tribunal analyzed the specifics of the case, focusing on the agreement date, payment details, and the treatment of joint purchasers. The Tribunal noted that the agreement/MOU for the property transaction was entered into on 31/07/2008, with an advance payment claimed to have been made to the seller on the same date. However, the Revenue contended that the first payment was actually made on a later date to a different entity. The Tribunal observed that the assessment order for the joint purchaser (son of the assessee) had been passed accepting the contentions, leading to a decision in favor of the assessee. The Tribunal emphasized the need for consistency in the treatment of joint purchasers involved in the same transaction and remitted the issue to the AO for a decision based on the previous assessment order.

Issue 3: Consistency in treatment of joint purchasers in the same transaction

The Tribunal highlighted the importance of treating joint purchasers consistently in a transaction to avoid discrepancies and ensure fairness. By referencing the assessment order passed in the case of the son of the assessee, where contentions were accepted, the Tribunal concluded that the same treatment should extend to the assessee. This approach aimed to maintain uniformity and avoid contradictory outcomes for parties involved in the same property transaction. The Tribunal allowed the appeal for statistical purposes, indicating a need for coherence in the application of tax provisions to joint purchasers.

In conclusion, the Tribunal's judgment revolved around the interpretation of section 56(2)(vii) of the Income Tax Act, 1961, the justification of additions based on payment dates and agreement terms, and the necessity for consistency in treating joint purchasers in the same transaction. The decision underscored the significance of adhering to legal provisions and ensuring equitable treatment for all parties involved in property transactions to uphold fairness and prevent discrepancies in tax assessments.

← Previous Next →