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2024 (9) TMI 1048 - AT - Income TaxRevision u/s 263 - Validity of order passed u/s 143(3) - non-examination of provisions of section 43CA, late payment of PF and ESI to the credit of the central government, applicability of provisions of section 269SS and section 269T - PCIT held that the AO passed the order without making necessary examination, verification enquiries HELD THAT - Provisions of section 43CAA - On perusal of the questions raised by the AO and the submissions made by the assessee from time to time shows that the AO during the course of assessment proceedings had asked the assessee to explain the difference between the sale consideration received and the value adopted by the stamp valuation authority. Assessee has replied before the AO that when the difference between the sale consideration received and the valuation adopted by the stamp valuation authority is less than 10%, the provisions of section 43CA of the Act are not applicable in view of the decision of Rahul Construction 2012 (1) TMI 229 - ITAT PUNE So far as the flat sold to Mr. Sameer Kotkar is concerned, where the difference is 29.88%, the assessee has duly explained before the Assessing Officer that the flat consists of carpet area of 690.90 sq.ft and non-accessible terrace of 766.86 sq.ft aggregating to 1,457.76 sq.ft. It was explained that the carpet area and non-accessible terrace area was taken by the stamp valuation authority at Rs. 19,59,174/-, due to which the difference arose. We find the Assessing Officer after accepting the above contention of the assessee did not make any addition on this issue. Since the Assessing Officer in the instant case has after duly putting queries to the assessee and after considering his reply has not made any addition, therefore, PCIT is not justified in invoking the jurisdiction u/s 263. Late payment of employees contribution to PF and ESI - Since the assessee has admittedly deposited the employees contribution to PF and ESI before the due date of filing of return, therefore, the PCIT was not justified in invoking the provisions of section 263 of the Act by relying on the decision of Checkmate Services Pvt. Ltd. 2022 (10) TMI 617 - SUPREME COURT which came subsequent to the order passed by the AO - PCIT is not justified in invoking the provisions of section 263 of the Act on the issue of late payment of employees contribution to PF and ESI. Applicability of provisions of section 269SS and section 269T - So far as the issue of loan taken amounting to Rs. 13,10,000/- is concerned, we find an amount of Rs. 8,10,000/- is on account of interest of Rs. 9 lacs less TDS of Rs. 90,000/-. Such amount has been provided through journal voucher and therefore, the provisions of section 269SS and 269T of the Act are not applicable for Rs. 8,10,000/-. For amount of Rs. 5 lacs we find the assessee explained before the PCIT that the amount was paid by Mrs. Shobha Jatte who subsequently requested to cancel the booking and transfer the same to her nephew Mr. Dnyandeo Aade against the booking of flat C-706 at the same project. Thus, there is no acceptance of advance of Rs. 5 lacs from Mr. Dnyandeo Aade in cash and therefore, the provisions of section 269SS of the Act are not applicable. For repayment of Rs. 1,40,00,000/- is concerned an amount of Rs. 1,35,00,000/- is repaid through RTGS and Rs. 5 lacs which is alleged to be repaid to Mrs. Shobha Jatte is due to cancellation of booking of the flat and subsequent transfer to her nephew account through journal entry. Under these circumstances, we are of the considered opinion that the provisions of sections 269SS and 269T of the Act are also not applicable and the PCIT is not justified in invoking the provisions of section 263 of the Act on account of violation of provisions of sections 269SS and 269T. Appeal filed by the assessee is allowed.
Issues Involved:
1. Applicability of Section 43CA of the Income Tax Act, 1961. 2. Late payment of employees' contribution to PF and ESI. 3. Applicability of Section 269SS of the Income Tax Act, 1961. 4. Applicability of Section 269T of the Income Tax Act, 1961. Detailed Analysis: 1. Applicability of Section 43CA of the Income Tax Act, 1961: The PCIT noted that the assessee had violated the provisions of Section 43CA in several instances where the sale consideration was less than the stamp duty valuation. The assessee argued that the difference between the sale consideration and the stamp duty valuation was less than 10%, and therefore, Section 43CA should not apply. The assessee relied on the decision of the Pune Bench of the Tribunal in the case of Rahul Construction vs. DCIT, which held that if the difference is less than 10%, the sale consideration should be accepted. For cases where the difference was more than 10%, the assessee provided detailed explanations. The Tribunal found that the Assessing Officer had duly examined these issues during the assessment proceedings and accepted the assessee's explanations. Therefore, the Tribunal held that the PCIT was not justified in invoking Section 263 on this issue. 2. Late Payment of Employees' Contribution to PF and ESI: The PCIT observed that the assessee had deposited employees' contributions to PF and ESI beyond the prescribed due dates. The assessee contended that the contributions were made before the due date for filing the return of income, and therefore, no addition was warranted. The Tribunal noted that at the time of passing the assessment order, the law as laid down by the Hon'ble jurisdictional High Court in the case of CIT vs. Ghatge Patil Transports Ltd. was applicable, which allowed such deductions if the payments were made before the due date for filing the return. The Tribunal held that since the law was settled in favor of the assessee at that time, the PCIT was not justified in invoking Section 263 based on the subsequent Supreme Court decision in the case of Checkmate Services Pvt. Ltd. vs. CIT. 3. Applicability of Section 269SS of the Income Tax Act, 1961: The PCIT noted that the assessee had accepted loans/deposits otherwise than by account payee cheque or bank draft. The assessee explained that the amount of Rs. 8,10,000/- was interest provided through a journal voucher and not a loan. For the amount of Rs. 5,00,000/-, it was explained that it was received by cheque from Mrs. Shobha Jatte and later transferred to Mr. Dnyandeo Aade through a journal entry. The Tribunal found that the assessee had not accepted any loans in cash, and therefore, the provisions of Section 269SS were not applicable. The Tribunal relied on the decisions of the Hon'ble Delhi High Court in CIT vs. Noida Toll Bridge Co Ltd. and the Hon'ble Rajasthan High Court in CIT vs. Govind Kumar, which held that journal entries do not violate Section 269SS. 4. Applicability of Section 269T of the Income Tax Act, 1961: The PCIT observed that the assessee had repaid loans otherwise than by account payee cheque or bank draft. The assessee explained that the amount of Rs. 1,35,00,000/- was repaid through RTGS, and the amount of Rs. 5,00,000/- was transferred through a journal entry due to the cancellation of a booking. The Tribunal found that the repayments were made through banking channels or journal entries, and therefore, the provisions of Section 269T were not applicable. Conclusion: The Tribunal concluded that the Assessing Officer had duly examined the issues during the assessment proceedings and accepted the explanations provided by the assessee. Therefore, the order passed by the Assessing Officer was neither erroneous nor prejudicial to the interest of the Revenue. The Tribunal set aside the order of the PCIT and allowed the appeal filed by the assessee. The appeal was pronounced in the open Court on 9th September 2024.
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