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TMI Blog2021 (12) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... ween the assessee and the seller i.e the builder, viz. M/s Lok Housing and Construction Ltd., the transfer of the property under consideration for the purpose of triggering the provisions of Sec.56(2)(vii)(b) stood completed. The events subsequent to the transaction of transfer of the immovable property under consideration will have no bearing on the applicability of the provisions of Sec.56(2)(vii)(b) - Accordingly, we reject the aforesaid claim of the assessee that the provisions of Sec.56(2)(vii) would not be applicable in its case - we are not inclined to accept the manner in which the A.O had made an addition in the hands of the assessee u/s 56(2)(vii)(b)(ii) of the Act i.e without making a reference to the valuation officer as was required per the mandate of Sec. 50C(2) of the Act, therefore, we herein set-aside the matter to the file of the A.O for fresh adjudication - Appeal filed by the assessee is allowed for statistical purposes. - ITA No. 1669/MUM/2019 - - - Dated:- 2-12-2021 - SHRI S.RIFAUR RAHMAN (ACCOUNTANT MEMBER) AND SHRI RAVISH SOOD (JUDICIAL MEMBER) Assessee by : Shri Viraj Mehta, A.R Revenue by : Shri Shiddaramappa K., D.R ORDER PER R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout considering the spirit of the application of the section 56(2)(vii) (b)(ii) Income Tax Act 1961. 5. That the Learned CIT(A) has also erred in considering the very fact that the intention of the Developer was to cheat and commit Fraud on the Appellant and as such the Transaction Value in such a scenario has nothing to do with the Market Value or that of Stamp Duty Value and as such the moot question of application of the section 56(2)(vii)(b)(ii) of Income Tax Act 1961, does not arises to that extent. 6. That the Learned CIT(A) has also erred in considering the very fact that, the booking of an under construction Flat is Not an Immovable Property in itself and hence the application of the section 56(2)(vii) (b)(ii) of Income Tax Act 1961 does not arises. 7. That the Learned CIT(A) has also erred in Not Referring the Matter for DVO-Valuation Officer, without considering the very fact that the Developer has not Constructed any Building at All till date, and only Plinth Level Work remain since year 2013 and the same Fact was Wrongly not Reported by the Ward Inspector for refer the Matter for Valuation to DVO Valuation Officer and Filing of FIR by the Appellant in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while for the agreement value of the property in question (admeasuring 725.26 sq. ft.) was ₹ 1,27,22,500/-, its market price as per the Stamp Valuation Authority was ₹ 1,88,63,367/-. Observing, that as the value of the property per the agreement was less than the value that was adopted by the Stamp Valuation Authority by an amount of ₹ 61,40,868/-, the A.O called upon the assessee to explain as to why the said difference may not be treated as his income from other sources u/s 56(2)(vii)(b)(ii) of the Act. In reply, the assesseee vide his letter dated 30.11.2016 objected to the adoption of the value taken by the Stamp Valuation Authority as the Fair Market Value (F.M.V.) of the property in question. It was the claim of the assessee that as the property under consideratoin was situated in a slum area, therefore, the market value of the same was much lower than the value of the other buildings in the neighbouring areas. Backed by his aforesaid claim, it was submitted by the assessee that the amount for which the property in question had been transacted as per the agreement be accepted without any reference to its market value as was adopted by the Stamp Valuatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the stamp duty value of the aforesaid property in question exceeded the value at which the assessee had claimed to have purchased the property under consideration vide agreement , dated 11/15.10.2013. On appeal, the CIT(A) finding no infirmity in the view taken by the A.O upheld the same and dismissed the same. 7. We have heard the ld. Authorized Representatives for both the parties, perused the orders of the of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. Before adverting any further, we deem it fit to cull out the provisions of Sec. 56(2)(vii) of the Act, which reads as under: (2) In particular, and without prejudice to the generality of the provisions of sub-section (1) the following income, shall be chargeable to income-tax under the head Income from other sources . (vii) where an individual or a Hindu undivided family receives, in any previous year from any person or persons on or after the 1st day of October, 2009 [but before the 1st day of April, 2017],- (a) any sum of money, without consideration, the ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payer or donor, as the case may be; or (e) from any local authority as defined in the Explanation to clause (20) of section 10; or (f) from any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution referred to in clause (23C) of section 10; or (g) from any trust or institution registered under section 12AA [or section 12AB]; [or] (h) by way of transaction not regarded as transfer under clause (vicb) or clause (vid) or clause (vii) of section 47.] Explanation.- For the purposes of this clause,- (a) assessable shall have the meaning assigned to it in the Explanation 2 to sub-section (2) of section 50C; (b) fair market value of a property, other than an immovable property, means the value determined in accordance with the method as may be prescribed (c) jewellery shall have the meaning assigned to it in the Explanation to sub-clause (ii) of clause (14) of section 2; (d) property [means the following capital asset of the assessee, namely:-] (i) immovable property being land or building or both; (ii) shares and securities; (iii) jewelle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contemplates that in a case where an assessee claims before an A.O that the value adopted by the Stamp Valuation Authority qua the transfer of a capital asset, being land or building or both, exceeds the fair market value of the property as on the date of transfer and, the value so adopted by the Stamp Valuation Authority had neither been disputed by the assessee in any appeal or revision nor any reference had been made before any other authority, court or the High Court, then, the A.O is obligated to refer the valuation of the capital asset to a valuation officer; and if the value so ascertained by the valuation officer exceeds the value assessed by the Stamp Valuation Authority, the value so adopted by such authority is to be taken as the full value of consideration received as a result of the transfer. As noticed by us hereinabove, the assessee had specifically vide his letter dated 30.11.2016 objected to the adoption by the A.O of the value taken by the Stamp Valuation Authority as the FMV of the property under consideration a/w reasons in support of raising such objection i.e the property was situated in a slum area. However, we find that the A.O instead of referring the valua ..... X X X X Extracts X X X X X X X X Extracts X X X X
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