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TMI Blog2019 (9) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... Viz/2018 - - - Dated:- 30-8-2019 - Shri V. Durga Rao, Judicial Member And Shri D.S. Sunder Singh, Accountant Member For the Appellant : Shri G.V.N.Hari, AR For the Respondent : Shri P.Srinivasa Murthy, DR ORDER PER SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER : This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals) [CIT(A)]-1, Guntur vide Appeal No.51/2016-17 dated 27.08.2018 for the Assessment Year (A.Y.)2014-15. 2. Ground No.1 and 3 are general in nature which does not require specific adjudication. 3. Ground No.2 is related to sustaining the addition of ₹ 62,02,000/- made u/s 56(2)(vii)(b) of the Income Tax Act, 1961 (in short Act ). In the instant case, the assessee filed the return of income declaring total income of ₹ 3,39,420/- and the same was processed u/s 143(1) of the Act. Subsequently, notice u/s 148 was issued and the assessment was reopened u/s 147 of the Act. During the financial year relevant to the assessment year 2014-15, the assessee has purchased the immova ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e value of 2006-07 is not acceptable. Hence, the Ld.CIT(A) held that the AO has rightly invoked the provisions of 56(2)(vii)(b). For the sake of clarity and convenience, we extract relevant part of the order of the Ld.CIT(A) which reads as under : In this regard a careful consideration has been given to the papers submitted and found that this without prejudice argument of the appellant has no strength to stand to the test of appeal. It is clear that the appellant entered into an agreement in 2006-07 and possessed the property by making certain payments. However the payments made were in cash and hence the argument does not sustain. The fiscal law should be read in its letter and spirit. Unless there is any ambiguity there is no authority vested to import certain words to interpret the provisions otherwise. In this case as the appellant paid cash as against the condition prescribed, the argument of the appellant that it is a bonafide transaction and stamp value of the year 2006-07 may be adopted is not acceptable. Primarily as discussed supra the transaction was treated as transfer in the year 2013-14, hence there is no merit in the argument of the appellant also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led before the Hon ble District Court, the assessee has paid the amounts as mentioned in page No.3 of the paper book which reads as under : C) It is further submitted that as per the terms and conditions of Addendum Agreement dt.19.03.2007 the plaintiff paid cash of ₹ 5,62,000/- ₹ 7,00,000/- on 15.10.2007 and paid cash of ₹ 12,62,000/- and also paid an amount of ₹ 8,62,622.50, and also paid ₹ 9,00,000/- totally paid ₹ 17,26,622.50 for discharge of defendant debt to Union Bank of India bearing A/c No.409001010531214 dated 08.05.2009 through Sri Venkateswara Poultry A/c No.571007 and the remaining balance amount of ₹ 1,11,377.50 Ps. will be paid later on and on the date of commitment the plaintiff paid amounts to the defendant and he has to register the same in favour of the plaintiff. Subsequently, both the parties settled the issue on compromise by arbitration. The Fist Additional District Judge, Guntur has directed to vendor to register the property subject to payment of the consideration as per the sale deed. Accordingly, the vendor has registered the property. The Ld.AR submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement, but not before the date of agreement. Hence argued that the proviso to section 56(2)(vii)(b) cannot come to the help of the assessee, hence, requested to uphold the order of the Ld.CIT(A) and dismiss the appeal of the assessee. 7. We have heard both the parties and perused the material placed on record. In the instant case, the property in question was registered on 31.10.2013 relevant to the A.Y.2014-15. However, as seen from the facts of the case, the assessee and the vendor had entered into MoU dated 15.12.2006 to sell the property to the assessee. As per the MoU, the vendor was ready to sell the land to the extent of one acre in S.No.142/B, Door No.7-54, Ward No.7 of Amaravathi Village, Guntur Dist along with six poultry sheds with fitted cages, bore well with motors and all electrical fittings. As per the Clause No.3, the entire property of land and the poultry sheds along with the gates were delivered to the assessee for enjoyment and the possession by the assessee. As per Clause V of the MoU, the property was valued at ₹ 31,00,000/- and agreed to make the payment of ₹ 5,62,000/- in two instalments i.e. ₹ 3,00,000/- on 15.12.2006 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed by Addendum dated 19.03.2007. There is no dispute that there was an agreement for sale of the property to the assessee by the vendor. The department also did not dispute the contents of the agreement. The assessee also made the payments in cash as well as in cheque to the vendor as per the details furnished in the preceding paragraphs. The assessee also filed civil suit before the Hon ble District Judge Guntur for transfer and registration of the property as per the terms and conditions of the agreement. The assessee also filed petition before the Hon ble District Judge for specific performance of MOU dated 19.03.2007 for execution of the document in favour of the assessee. Subsequently, the First Additional District Judge, Guntur vide order dated 31.10.2013 directed the vendor to execute and register the sale deed in favour of the assessee. All the above evidences placed before us establish that there was an agreement executed between the vendor and the vendee prior to the date of insertion of section 56(2)(vii)(b) of the Act, fixing the amount of consideration for the transfer of the property. Therefore, the assessee s case is squarely covered by the proviso to section 56(2 ..... 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