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2022 (6) TMI 958

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..... as held that law contained in Section 56(2)(vii)(b) as stood on the date of allotment letter (on 11.11.2009), falling in assessment year 2010-11, did not contemplate the situation of a receipt of property by the buyer with inadequate construction. The learned ITAT has held categorically that the amended provisions of Section 56(2)(vii)(b)(ii) could not be applied and they have relied upon the judgment of Bajranghlal Naredi Vs. ITO [ 2020 (1) TMI 1359 - ITAT, RANCHI] . It is held time and again by the Apex Court qua the admission of appeal on substantial questions of law, more specifically in the case of Commissioner of Customs-I Vs. Aasu Exim Pvt. Ltd. [ 2017 (12) TMI 107 - SUPREME COURT] and Steel Authority of India Ltd. [ 2017 (4) TMI .....

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..... in law the Tribunal was justified in holding that there was no lack of enquiry by the Assessing Officer but the PCIT had considered the order erroneous and prejudicial to the interest of revenue without assigning any reasons. The learned counsel for the Revenue has challenged the findings arrived at by the learned ITAT and submitted that the order passed under Section 263 of the Act was valid and justified. He submits that the order passed by the learned ITAT needs interference as the same was meeting out prerequisites of Section 263 of the Act which can be invoked when the assessment order is erroneous and prejudicial to the interest of Revenue. We have considered the order impugned relied upon by Revenue counsel dated 14.09.2021 p .....

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..... tion of the parties and not to go by the nomenclature. Thus, there being offer and acceptance by the competent parties for a lawful purpose with their free consent, we find that all the attributes of a lawful agreement are available as per provisions of the Indian Contract Act, 1872. We also find that such agreement was acted upon by the parties and pursuant to the allotment letter, the assessee paid a substantial amount of consideration of Rs. 45,26,233/-, as early as in the year 2008 itself. We do not find merit in the contention of the ld. CIT that it was a mere provisional attachment which was subject to further changes because of the unexpected happening which may be instructed by the approving authority, resulting into increase or dec .....

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..... lowed. We also draw strength from the decision of the Hon ble Delhi High Court in the case of CIT vs. Kuldeep Singh (2014) 270 CTR 561 (Del) , whereinthe Hon ble Delhi High Court held that: Section 54 of the Income-tax Act, 1961 - Capital gains - Profit on sale of property used for residential house (Purchase) - Whether where assessee having sold residential property, entered into an agreement with a builder within prescribed period of two years for purchase of flat payment of which was linked to stage of construction, assessee's claim for deduction under section 54 was to be allowed - Held, yes [In favour of assessee] In the lights of the above decision and on the appreciation of the facts and the evidences available on ma .....

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..... s a valid and lawful agreement entered by the parties long back in A.Y. 2010-11 only, when the subject perty was transferred and substantial obligations were discharged. The law contained in S. 56(2)(vii)(b) as stood at that point of time, did not contemplate a situation of a receipt of property by the buyer with for inadequate construction. Hence, we are of the considered view that the 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 on the fulfillment of the conditions, the amended provision of S. 56(2)(vii)(b)(ii) could not be applied. Our view finds support from the decision in the case of Bajranglal Naredi vs. ITO (2020) 203 TTJ 925 (Ranchi) .....

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..... of the Act, then in that eventuality, the other grounds raised by the assessee become infructuous and needs no adjudication. On consideration of the above, it is noted that, the view taken by the learned ITAT is based on logical findings. While rendering the judgment, the learned ITAT has relied upon various judgments of different High Courts and considered the provisions of 56(2)(vii) pre-amendment and post-amendment. Learned ITAT has held that law contained in Section 56(2)(vii)(b) as stood on the date of allotment letter (on 11.11.2009), falling in assessment year 2010-11, did not contemplate the situation of a receipt of property by the buyer with inadequate construction. The learned ITAT has held categorically that the amended pro .....

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