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TMI Blog2019 (9) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has purchased the immovable property from Sri Balanagu Prasanna Kumar vide Doc.No.1465/2013 of Amaravathi SRO on 31.10.2013 for a consideration of Rs. 50,00,000/-, but the market value of the said property was Rs. 1,12,02,000/- as per SRO Amaravathi. Therefore, the Assessing Officer (AO) was of the view that the transaction attracts provisions of section 56(2)(vii)(b) of the Act since the purchase price of the property was less than the stamp duty value, hence, issued show cause notice to the assessee as to why the said difference amount of Rs. 62.02 lakhs should not be treated as income from other sources. In response to the notice, the assessee filed objection stating that the property in question was purchased as per the agreement entered into by the assessee on 19.03.2007 and the part payment was made in 2009 by cheque. The Ld.AR further stated that though the assessee had entered into purchase agreement and paid the consideration partly through cheque and cash, the seller was not ready to register the document and therefore, the assessee was forced to file civil suit in the District Judge Court. Subsequently, the matter was settled by arbitration and by compromise agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for the purpose of considering the date of possession is incorrect on the part of the AO appears to be correct having regard to the facts of this case. In the present case ample evidences were filed by the appellant to state that the impugned property was held in his possession by paying amounts since 2006- 07. In view of the above discussion though the appellant held in possession of the said property since 2006-07, treatment given by the AO considering the registered document and invoking the provisions of sec. 56(2)(vii)(b) of the Act is correct and require confirmation. Hence the grounds raised by the appellant are dismissed." 5. During the appeal hearing, the Ld.AR submitted that the assessee has entered into an agreement for purchasing the property in 2006-07 precisely on 19.03.2007. The assessee made agreement with the seller of the property and made payments partly in cheque and partly in cash. The vendor of the property was not ready to register the property and honour the commitment, even after making the payments, hence the entire issue has gone to litigation. The assessee furnished the copy of MoU dated 15.12.2006 entered into between Sri Balanagu Prasanna Kumar an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 214 dated 08.05.2009 through Sri Venkateswara Poultry A/c No.571007 and the remaining amount of Rs. 1,11,377.50 was paid later on. The amount was partly paid by cheque and partly by cash and the same is evidenced in the suit, filed by the assessee before the District Judge Court, Guntur. The assessee also paid a sum of Rs. 17,26,622/- through cheque dated 08.05.2009 to the vendor. Therefore, argued that the assessee's case is squarely covered by the proviso to section 56(2)(vii)(b) of the Act and there is no requirement make any addition. Accordingly, requested to set aside the order of the Ld.CIT(A) and allow the appeal of the assessee. The assessee also relied on the decision of Appana Hari Naga Venkat Rao Vs. ITO -1(4), vide ITA No.222/Viz/2017 dated 06.02.2019 of ITAT, Vizag. In the case law relied upon by the assessee, the issue is with regard to application of 50C for the purpose of computing capital gains. The coordinate bench of ITAT held that it is not mandatory to hold that the application of 50C for sale transactions, when there is an evidence to establish that the assessee had entered into genuine agreement before the amendment came into force and held that the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had complied with the terms and conditions of the agreement, the vendor has not registered the land as per the MOU. Hence the assessee filed civil suit before the District Judge, Guntur as per the details mentioned in the plaintiff filed before the District Judge Guntur. The assessee has furnished the complete details of the payments made to the vendor as per which a sum of Rs. 5,62,000/- was paid on 19.03.2007 and Rs. 7,00,000 was paid on 15.10.2007 aggregating to Rs. 12,62,000/- in cash. The sum of Rs. 17,26,622/- was paid into Union Bank of India account through cheque on 08.05.2009 to clear the Union Bank of India loan as per the terms and conditions of the agreement dated 15.12.2006. Ultimately, the dispute was settled by compromise and arbitration and the District Additional Judge Guntur has ordered for registration of the land to the assessee vide order dated 31.10.2013. Consequent to the order of the District Judge, Guntur, the vendor has registered the land on 31.10.2013. From the above facts, it is clear that the assessee had entered into genuine agreement for purchase of land prior to insertion of proviso u/s 56(2)(vii)(b) of the Act and the provision has come into fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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