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TMI Blog2024 (9) TMI 1048X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time to time, the Assessing Officer completed the assessment u/s 143(3) of the Act on 13.08.2021 accepting the returned income of Rs. 23,09,450/-. 3. The Ld. PCIT examined the record and noted that the order passed by the Assessing Officer u/s 143(3) of the Act is prima facie erroneous and prejudicial to the interest of Revenue on account of the issues which he had reproduced at paras 3 to 6 which read as under: 03. On perusal of the assessment records it is seen the assessee had offered total sales at Rs. 4.67 crores. The assessee had also provided break up of sales of residential Units owned by the assessee forming stock in trade. The assessee had violated the provisions of section 43CA of the Act in below mentioned instances- S.No. Flat No. Name of the flat holder Sale consideration Stamp duty valuation (Rs.) Difference (Rs.) 1 A-401 Mrs Urmila Bhosale 78,60,000/- 83,18,955/- 4,58,955/- 2 B-704 Mrs Rutuja Shinde 38,50,500/- 38,50,500/- 0 3 B-1105 Namo Landmark LLP 65,72,000/- 67,25,217/- 1,53,217/- 4 B-401 Mr Ritesh Neheta 81,93,404/- 85,18,110/- 3,24,706/- 5 B-205 Mr Sameer Kotkar 60,39,200/- 78,43,443/- 18,04,243/- Total 3,25,15,104/- 3,52,56,225/- 27,41,121/- 3.1 Further, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the employer. In this case, the assessee has made all the payments for every month deposited late which is evident from the Form 3CD. 3.3 Further, the above issue under consideration has been settled in favour of the Revenue vide decision of Hon'ble Apex Court's in the case of case of Checkmate Services (P) Ltd vs. Commissioner of Income Tax-1, 143 taxmann.com 178(2022) (SC). In the decision of Checkmate Services (P.) Ltd, the Hon'ble Apex Court decided the issue of due date of payments u/s 36(1)(va) of the Act as the due date of respective statues and not the due date of filling return of income after detailed discussion of applicability of the provisions of section 43B of the Act for the sums mentioned in the provisions of section 36(1) (va) of the Act. However, this issue was not considered during the assessment proceedings for the year under consideration. 3.4 Further on perusal of assessment records, following details of amount of loan or deposit taken or accepted and amount of repayment were found Sr. No. Name PAN of the lender or depositor Amount of loan or deposit taken or accepted (in Rs. ) Whether the loan or deposit was taken or accepted by cheque or bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of the above issues, therefore, he held the assessment order to be erroneous and prejudicial to the interest of Revenue. He accordingly, set aside the order to the file of the Assessing Officer for examining the above issues in detail and pass a fresh assessment order after giving due opportunity of being heard to the assessee. 5. Aggrieved with such order of the PCIT, the assessee is in appeal before the Tribunal by raising the following grounds of appeal: 1. Pr. Commissioner of Income Tax has erred in initiating proceedings u/s. 263 and passing the order without proper jurisdiction. Appellant prays to declare proceedings and order Bad in Law. 2. Pr. Commissioner of Income Tax has erred in passing the Order u/s. 263 without providing as to what enquiries and with whom were made before issue of notice. Appellant therefore prays to cancel the Order being violating Principles of Natural Justice. 3. Pr. Commissioner has erred in setting aside the issue of Section 43CA in respect of Flat No. A 401, В 1105 and B 401, Project Eva, Bavdhan, Pune which is accepted by Assessing Officer after full application of mind. Therefore, appellant prays to cancel the Pr. CIT (Central)&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess than 10%. So far as the sale of flats where the difference is more than 10% is concerned, the Ld. Counsel for the assessee referring to the notice dated 17.05.2021 of the Assessing Officer, copy of which is placed at pages 62 to 65 of the paper book, drew the attention of the Bench to question No.10 where the Assessing Officer had asked the following queries: 10. In the details of sales filed it is seen that a flat has been sold to Mr Sameer Kotkar admeasuring 1316 sq ft for a consideration of Rs. 60,39,200 when the stamp duty value is Rs. 78,43,433/- and difference is 29.88%. Kindly explain why the provisions of section 43CA of the Income Tax Act are not applicable in this case. 8. Referring to the reply of the assessee dated 14.06.2022 to the Assessing Officer, copy of which is placed at pages 66 to 84 of the paper book, the Ld. Counsel for the assessee drew the attention of the Bench to the following submissions, details of which are placed at pages 80 and 81 of the paper book: 10. IN THE DETAILS OF SALES FILED IT IS SEEN THAT A FLAT HAS BEEN SOLD TO SAMEER KOTHAR ADMEASURING 131650 FT FOR A CONSIDERATION OF Rs. 60,39,000/- WHEN THE STAMP DUTY VALUE IS Rs. 78,43,433 AND THE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or assessed or assessable under sub-section (1). The provisions of sub section 2 of Section 50C reads as follows Without prejudice to the provisions of sub-section (1), where (a) The assesses claims before any Assessing Officer that the value adopted or assessed or assessable by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer, (b) the value so adopted or assessed or assessable by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court, the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clause (i) of sub-section (1) and sub-sections (6) and (7) of section 234, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of section 269SS of the Act is concerned, he submitted that the PCIT observed from the tax audit report that the assessee has accepted the loan / deposit otherwise than by an account payee cheque / bank draft from Mr Anil Kharadkar and Mr Dnyandeo Aade. He submitted that the assessee in reply to the notice u/s 263 of the Act vide letter dated 13.02.2024 filed complete details explaining the non-applicability of section 269SS of the Act. It was explained that the amount of Rs. 8,10,000/- was towards interest provided of Rs. 9 lacs after TDS of Rs. 90,000/-. The provision for interest in the Ledger account after TDS is accounted for by journal voucher and the assessee has not accepted any loan during the year under appeal, therefore, the provisions of section 269SS of the Act are not applicable on account of loan / deposit shown to have been taken from Mr. Anil Kharadkar at Rs. 8,10,000/-. So far as the amount of Rs. 5 lacs received from Mr. Dnyandeo Ade is concerned, he submitted that the assessee during the year has received an amount of Rs. 5 lacs from Mrs. Shobha Jatte of Buldhana who is assessed to income tax, for booking of flat No.D 604 in project EVA, Bavdhan, Pune vide ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, the twin conditions viz. (i) the order is erroneous and (ii) that order is prejudicial to the interest of Revenue must be fulfilled. However, in the instant case, since the Assessing Officer has accepted the submissions made by the assessee after due application of mind on the first two issues, there is no error in the order of the Assessing Officer on this issue. 13. So far as the third and fourth issues i.e. applicability of sections 269SS and 269T are concerned, he submitted that there is no violation of the provisions of section 269SS and 269T which was duly explained before the PCIT and therefore, the order is neither erroneous nor prejudicial to the interest of the Revenue. He accordingly submitted that the order passed by the PCIT be set aside and the grounds raised by the assessee should be allowed. He also relied on the following decisions: i) Maria Fernandes Cherly vs. ITO, 123 taxmann.com 252 ii) Sai Bhargavanath Infra vs ACIT, 144 taxmann.com 168 iii) Bajaj Housing Finance Ltd. vs. PCIT, 161 Taxmann.com 213 iv) Malabar Industrial Co Ltd. vs. CIT, 109 Taxmann 66 v) PCIT vs. Clix Finance India P Ltd., 160 taxmann.com 357 vi) PCIT vs. SPPL Property Management (P) Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned, it is the submission of the Ld. Counsel for the assessee that there is absolutely no violation of the above provisions since the assessee has neither accepted nor repaid any loan in cash and the acceptance or repayment of loan are through journal entries or through RTGS / banking channels. 16. Thus, it is his submission that the order passed by the Assessing Officer is not at all erroneous and therefore on account of non-fulfillment of the twin conditions i.e. order must be erroneous and the order must be prejudicial to the interest of the Revenue, the PCIT is not justified in invoking the provisions of section 263 of the Act. 17. We find merit in the above arguments of the Ld. Counsel for the assessee. A perusal of the questions raised by the Assessing Officer and the submissions made by the assessee from time to time shows that the Assessing Officer 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. The assessee has replied before the Assessing Officer that when the difference between the sale consideration received and the valuation a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act by relying on the decision of the Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. vs. CIT (supra), which came subsequent to the order passed by the Assessing Officer. We, therefore, are of the considered opinion that the 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. 19. 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/-. 20. So far as the amount of Rs. 5 lacs is concerned, 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 appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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