9911796707
TMI Blog2022 (12) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... alue (FMV) (guideline value under Stamp Act) of the property was at Rs. 6 cr., as against the FMV of Rs. 12.09 cr. as on the date of sale (14/8/2014), which fell within the stipulated period of 48 months within which the conveyance of the property was envisaged to be made under the agreement. The assessee's return was selected for scrutiny for verification of the source of funds for purchase. The same was explained by the assessee as financed through bank borrowings (at Rs. 2.75 cr.) and the balance Rs. 94 lacs through banking channel, i.e., by way of two cheques for Rs. 50 lacs and Rs. 44 lacs passed on 01/10/2014 and 19/12/2014 respectively. The assessment was accordingly completed accepting the returned income of Rs. 8,50,370. The ld. Pr. CIT was, on a review of the assessment order, of the view that the Assessing Officer (AO) had failed to examine the applicability of sec. 56(2)(vii)(b) of the Act, in which case, the purchase consideration is deemed at Rs. 1208.61 lacs, i.e., at the market value as on the date of purchase. He, accordingly, set aside the assessment for a de novo consideration. Aggrieved, the assessee is in appeal, raising the following grounds:- (1) The order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y him to it's conveyance deed, executed, again, on 14/8/2014 at the agreed consideration of Rs. 10 cr. in favour of SM. He could not though explain the absence of any reference to the Agreement dated 29/3/2011 in either of the conveyance deeds. Further, he would continue, in the case of SM, the co-owner, though no appeal was preferred against the sec. 263 order, similarly passed, he was successful in the ensuing set-aside assessment, wherein the income assessed earlier u/s. 143(3) was adopted vide order dated 30/3/2022 (PB pgs.128-137). Even in the case of the seller-vendor, Shri Surendra Singh (SS), in whose case also the corresponding provision of s. 50C was applied by the Revenue, he was successful in first appeal (PB pgs.99-127). It is, thus, only in the assessee's case that the matter survives, and which needs therefore to be put closure to. We were, accordingly, urged by him to set aside the impugned order (IO) or, in the alternative, direct the ld. Pr. CIT to make verification and satisfy himself with regard to the satisfaction of the conditions of s. 56(2)(vii)(b) in the instant case. 3.2 The ld. CIT-DR, on the other hand, pleaded for no interference with the IO inasmuch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilable on record, it is found that the submission of the assessee on the issue of provisions of section 56(2)(vii)(b) as the order of the ld. CIT(A) in the case of seller Sh. Surendra Singh was decided on this issue and it was mentioned in the para 4 of the order and sale value was taken as Rs. 16,00,00,000/-. Thus, after perusal of all the relevant facts of the case and submissions of the assessee in above paras, income as assessed u/s. 143(3) at Rs. 19,33,350/- is hereby accepted. The assessee also confirms the same and it was mentioned in the reply which was reproduced in para 3 above.' The acceptance of the assessee's case in SM is, as apparent, based on the order by the first appellate authority in the case of seller-SS (PB pgs. 99 - 127), the relevant part of which reads as under:- '4.1.6 As per provision section 2(47) of the Income Tax Act read with section 53A of the Transfer of Property Act, the ownership of the plot was transferred from the appellant during the previous year relevant to the Asst. Year 1996-97. The provision of section 50C of the Income Tax Act comes in the statute w.e.f. 01/01/2003 i.e. from the Asst. Year 2003-04. However, in this case, the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide with the date of registration of the same in favour of assessee-purchaser/recipient. This, in fact, is also apparent from a mere browse of the said decisions, which were read out by Shri Bardia during hearing, the relevant part of which we reproduce for ready reference:- "In the present case a valid and lawful agreement was entered by the parties long back in asst. yr. 2010-11 only, when subject property was transferred and substantial obligation were discharged." "Thus, it is apparently clear that the transfer of the property took place in the year 2013 when the provision of sub-cl.(ii) in s. 56(2)(vii)(b) was not in existence." We could not agree more. The taxable event u/s. 56(2)(vii) is the 'receipt' of the subject property. The Apex Court in Keshav Mills Ltd. v. CIT [1953] 23 ITR 230 (SC), explained the concept of receipt in terms of gaining control over the subject property. The payment of full consideration is in fact not a condition even for sale under the Transfer of Property Act, 1982 (s.54). In fact, a part of the price, as Rs. 94 lakhs by the assessee, stood paid even after the registration of the conveyance deed on 14/8/2014. It is again trite law that the law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration has been paid on or before such agreement. Satisfaction of the provision with reference to the agreement dated 29/3/2011 forms the substance of the assessee's case. 6. We, next, consider the assessee's case on merits, i.e., of the set aside by the ld. Pr. CIT to the AO for a de novo consideration. His principal objection, however, is with regard to the failure on the part of the AO to conduct proper enquiry/investigation with regard to the applicability of s. 56(2)(vii)(b) (para 8 of the IO). We cannot, again, agree more. There is nothing on record to exhibit any enquiry by the AO in the matter (for which we have also gone through the notice u/s. 142(1)/143(2)/PB pgs.55-60), the order sheet entries (PB pgs. 13-14), as well as the assessee's replies in its respect in the assessment proceedings. Even if, therefore, the assessee has submitted the copy of the agreement and bank statement/s before the AO, it does not mean that he was seized of the matter and had applied his mind thereto. There is, accordingly, no whisper of sec. 56(2)(vii)(b) in his order, much less any enquiry in its respect and, consequently, any finding by him in the matter. The reference to the assessee's c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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