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TMI Blog2023 (4) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... s that Ld. AO did conduct an enquiry. However, in the opinion of Ld. Pr. CIT, the enquiry was not proper for which nothing is stated in clear terms as to how and why the enquiry was not proper. Further, we note that reference has been made to two separate clauses to Explanation (2) to Section 263 which dealt with two different situations. It leads us to believe about the indecisiveness on the part of the Ld. Pr. CIT. Applicability of Section 56(2)(vii)(b)(ii) - As in this case, there was a valid and lawful agreement entered by the parties long back in A.Y. 2008-09 only, when the subject property was transferred and substantial obligations were discharged. The law contained in Section 56(2)(vii)(b) as stood at that point of time, did not contemplate a situation of a receipt of property by the buyer without inadequate consideration. Hence, we are of considered view that ld. Pr.CIT erred in applying the said provision. Because of the mere fact that the flat was registered in the year 2014 falling in A.Y. 2015-16, the amended provision of Section 56(2)(vii)(b)(ii) cannot be applied. Hence, we are not in agreement with the view taken by the ld. Pr.CIT holding the applicability o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that during the year under consideration, assessee had purchased a residential property jointly with Shri Ajit Kumar Jain (spouse of the assessee) from Geeta Promoters Ltd. for a consideration of Rs.31,24,430/- whose market value was assessed at Rs.1,04,85,500/-. According to Ld. Pr. CIT, AO has not assessed the differential amount of Rs.73,61,070/- (Rs.1,04,85,500 Rs.31,24,430/-) u/s. 56(2)(vii)(b) of the Act. Since the assessee had purchased the property jointly having 50% share, Rs.36,80,535/- i.e. 50% of Rs.73,61,070/-, according to ld. Pr. CIT should have been added back to the income of the assessee as income from other sources u/s. 56(2)(vii)(b) of the Act. Assessee furnished her detailed reply explaining the facts of the case and the position of law in respect of applicability of section 56(2)(vii)(b) of the Act vide her reply dated 16.12.2019 which has been reproduced in the impugned order. 4.2. We note that assessee had furnished a detailed explanation on her transaction of purchase of property even before the Ld. Pr. CIT vide letter dated 21.11.2019 dealing with the facts of the transaction as well as the position of law applicable on the said transaction. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here are twofold contentions which have been dealt with, first being in respect of Ld. AO has failed to make adequate and proper enquiries to ascertain the true nature and period of transfer for purchase of property and the second one relating to applicability of Section 56(2)(vii)(b) of the Act when the agreement to purchase the property was executed in the FY 2007-08 though the registry of the conveyance deed was executed in FY 2014-15. 6.1. On the first fold of contentions, we note that in para 4.2, Ld. Pr. CIT has referred to clause (a) to (d) of Explanation (2) to Section 263 and concluded that this case clearly falls under clause (b) to Explanation (2) to section 263 of the Act. However, in subsequent paragraphs 7 and 8, Ld. Pr. CIT refers to clause (a) of Explanation (2) to Section 263 of the Act and held that Ld. AO had failed to conduct adequate and proper enquiry in this respect. On going through the two clauses i.e. clause (a) and (b) of Explanation (2) to Section 263 of the Act, we note that clause (a) refers to a situation where order is passed without making enquiry or verification which should have been made and clause (b) refers to a situation where order is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stamp duty value of such property as exceeds such consideration: Provided that where the date of the agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of the agreement may be taken for the purposes of this sub-clause: Provided further that the said proviso shall apply only in a case where the amount of consideration referred to therein, or a part thereof has been paid by any mode other than cash on or before the date of the agreement for the transfer of such immovable property. 7.2. From the above, we note that section 56(2)(vii) was originally introduced in the statute book w.e.f. 01.10.2009 which was not in existence when the impugned agreement to purchase the property was executed i.e. on 30.01.2008. Thus, Section 56(2)(vii) came into existence after the execution of agreement to purchase of property. The purchase consideration of Rs.31,24,430/- was fixed by this agreement for purchase and part payment had already been made on the dates stated above. Accordingly, at the relevant point in time, when the agreement for purchase was executed, there was no su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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