Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2020 (10) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (10) TMI 425 - HC - Income TaxRevision u/s 263 - Scope of limited scrutiny - AO did not invoke Section 56(2)(vii)b(ii) - HELD THAT:- AO has noted that the sale consideration paid by the assessee was ₹ 41,50,000/- and she has paid stamp duty and other expenses of ₹ 5,75,000/-. The source of funds was verified and the assessing officer was satisfied with the same. PCIT while invoking his power u/s 263 faults the assessing officer on the ground that he did not make proper enquiry. It is not clear as to what in the opinion of the PCIT is 'proper enquiry'. By using such expression, it presupposes that the AO did conduct an enquiry. PCIT, the enquiry was not proper in absence of not clearly stating as to why in the opinion of PCIT, the enquiry was not proper, we have to necessarily hold that the invocation of the power u/s 263 was not justified. Only reason for setting aside the scrutiny assessment was on the ground that the guide line value of the property, at the relevant time, was higher than the sale consideration reflected in the registered document. Question would be as to what is the effect of the guideline value fixed by the State Government. There are long line of decisions of the Hon'ble Supreme Court holding that guideline value is only an indicator and the same is fixed by the State Government for the purposes of calculating stamp duty on a deal of conveyance. Merely because the guideline was higher than the sale consideration shown in the deed of conveyance, cannot be the sole reason for holding that the assessment is erroneous and prejudicial to the interest of revenue. AO in his limited scrutiny, has verified the source of funds, noted the sale consideration paid, the expenses incurred for stamp duty and other charges - assessee in their reply dated 11.01.2019 to the show cause notice dated 26.10.2018 issued by the PCIT has specifically stated that the assessment was getting time barred, assessing officer took upon himself the role of a valuation officer u/s 50(C)(2) and found that the guideline value was not actual fair market value of the property and the actual consideration paid was the fair market value and therefore, he did not choose to make any addition under Section 50(C) of the Act. PCIT, has not dealt with this specific objection, but, would fault the assessing officer for not invoking Section 56(2)(vii)(b)(ii) merely on the ground that the market value was higher. As point out earlier, the guideline value is only an indicator and that will always not represent the fair market value of the property and therefore, the invocation of the power under Section 263 by the PCIT is not sustainable in law. - Decided against the revenue.
|