TMI Blog2018 (7) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... been paid by account payee cheque by the assessee to the vendor, therefore, the addition was not sustainable. Hence, the Ld. CIT(A) has rightly allowed the appeal of the assessee - dismiss the revenue’s appeal. - I.T.A. No. 1483/Kol/2017 - - - Dated:- 29-6-2018 - Shri A. T. Varkey, JM And Shri M.Balaganesh, AM For The Appellant : Shri A. Bhattacharjee, Addl. CIT For The Respondent : Shri M. D. Shah, AR ORDER Per Shri A.T.Varkey, JM This appeal preferred by the Revenue is against the order of the Ld. CIT(A)-9, Kolkata dated 31.03.2017 for assessment year 2013-14 . 2. The sole issue involved in this appeal of revenue is against the action of Ld. CIT(A) in deleting the addition of ₹ 1,69,81,700/- m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A). Before the First Appellate Authority, the assessee submitted that the AO has erred in making the addition on the ground that the property was acquired without consideration. It was urged by the assessee before the Ld. CIT(A) that as per the conveyance deed, the sale was for a consideration of ₹ 30,00,000/- hence, in such a scenario, the provisions of section 56(2)(vii)(b) of the Act had no application since it applies to cases where there is no consideration and, that the entire sale consideration was paid by account payee cheque to the vendor before 17.05.2016 and, therefore, no addition could be made on this account. Assessee also submitted that the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r a sum of ₹ 2,00,000 on 21-05-2014 and ₹ 28,00,000 was paid by 4 cheques from 10-05-2016 to 17-05-2016. I find that the AO has held that the registration of the flat was done without any consideration is factually incorrect. On reading of the entire deed of conveyance I find that the assessee purchased the flat along with one car park for Rs .30,00,000; however this amount was unpaid purchase price and the Vendor had provided the credit to the appellant to purchase the flat. The AO himself has recorded in the assessment order that the appellant and the Vendor are closely associated (para 4.7). I therefore find that due to the close relationship of the parties the grant of credit to purchase the flat was not unusual. The Vendor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Y 2013-14. I find that the said provisions of Section 56(2)(vii)(b)(ii) of the Act are not retrospective and would apply prospectively from AY 2014-15. This is endorsed by the decision of the larger bench of the Apex Court in the case of Vatika Township Pvt. Ltd. (2014) 49 taxmann.com 249. Therefore, the amendment and inserting of provisions of Section 56(2)(vii)(b)(ii) of the Act is prospective and will apply from AY 2014-15 and will not cover the transaction of the appellant as the same was concluded in AY 2013-14. 4. Aggrieved by the aforesaid order of the Ld CIT(A), the revenue is before us. 5. We have heard rival submissions and gone through the facts and circumstances of the case. We note that the assessee had produced the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. in the books of S. Adhikary F 25-25 Money receipt Bank Statement of Ritman and Balance confirmation statement of Ritman on 18.05.16. F 26-28 7. We also note that the AO has made the addition based on the provisions of the Finance Act 2013 in respect of sec. 56(2)(vii) of the act. The objective of the amendment is discernible from the explanatory note to the Finance Act, 2013 which is as follows: 14. Taxability of immovable property received for inadequate consideration 14.1 Sub clause (b) of clause (vii) of sub-section (2) of section 56 of the Income-tax Act, before its amendment by the Act, inter alia, provided that where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement fixing the amount of consideration for the transfer of such immovable property. 14.4 Applicability: - This amendment takes effect from 1st April, 2014 and accordingly, applies in relation to the assessment year 2014-15 and subsequent assessment years. 8. We note that since the conveyance deed has been executed on 26.03.2013, the sale transaction has happened in the AY 2013-14, sec. 56(2)(vii)(b)(ii) of the Act was not applicable because for inadequate consideration the amended provision is applicable with effect from 01.04.2014 that means the said provision is applicable from AY 2014-15. Since the consideration for purchase of property was agreed upon by the vendor and the assessee at ₹ 30 lakhs, no addition was po ..... X X X X Extracts X X X X X X X X Extracts X X X X
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