TMI Blog2020 (2) TMI 1177X X X X Extracts X X X X X X X X Extracts X X X X ..... otment letter by the DDA; that aspect has to be examined on merits and it is to be seen whether the terms of the scheme of allotment and construction of flats/houses by the cooperative societies or institutions are similar to those mentioned in para 2 of Board Circular No. 471 as is stipulated in CBDT circular No. 672. Para 2 of the CBDT circular no. 471. Clearly, no exercise was carried out to even examine this aspect of the matter. This inertia on the part of the Assessing Officer renders the order erroneous and prejudicial to the interests of the revenue. Similar is the case with respect to the loan of ₹ 3.30 crores. No efforts were made to examine genuineness of the loan at all, and the mere fact that it has been paid back would not take the matter outside the ambit of scrutiny by the Assessing Officer. AO thus clearly remained passive on the facts which clearly called for some basic inquiries. As a matter of fact, so far as application of section 56(2)(vii)(b) AO did not examine the matter as all, and there was no occasion to examine whether the proviso to Section 56(2)(vii)(b) would come into play. The evidences being produced by the assessee now were never exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee had entered into purchase assessments, on 21.12.2003, at the stated price of ₹ 2,13,75,000/- and ₹ 1,42,00,000/- whereas stamp duty valuation for these properties was ₹ 3,58,76,190 and ₹ 2,42,33,000/- respectively. The PCIT also that, in terms of the provisions of Section 56(2) (vii) (b), such a difference between the stamp duty valuation and stated consideration was liable to be taxed, in the hands of the assessee, as income from other sources. It was also noticed that the assessee has taken loan of ₹ 3,30,00,000/- from one M/s. Ankur Orbit Enterprises but the Assessing Officer did not examine capacity of the firm to advance such loan or genuineness of transaction. On these facts the PCIT called upon the assessee to show as to why jurisdiction under Section 263 not be assumed. While doing so, he observed as follows:- ''On verification of the records, it is noticed that during the previous year, the assesses had purchased 02 premises i.e. 301 , 302 in YastuPrecent at Oshiwara, Mumbai for ₹ 2,13,75,000/- ₹ 1,44,37,500/- respectively as per agreement dated 21.12.2013. However, the market value for the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sonally or through your authorized representative to represent in the matter before the undersigned on 22.02.2019 at the address given above. In the alternative, you may represent through written submissions in the matter and the same shall be considered before finalization of the / proceedings. 4. In response to the aforesaid show cause notice, it was contended that since the purchase of property was made on 31.08.2009, and it was only registration that was done on 21.12.2013 the provisions of Section 56(vii)(b) did not come into play. It was contended that since initial payment was made on 31.08.2009 and since allotment letter by the builder was issued on 31.08.2009, it is market value as on 31.08.2009 which is material in the present context, and the PCIT has erroneously referred to stamp duty valuation as at the time of registration of documents, i.e. on 21.12.2013. As regards the loan of ₹ 3,30,00,000/- given by Ankur Orbit Enterprises, no adverse inference can be drawn in the course of proceedings under section 263. None of these, and other, erudite legal and factual submissions impressed the PCIT. He rejected the submissions so made by, inter alia, observin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of property on any such prior date reduced by actual consideration paid is chargeable to tax. 7.1 The AO has not verified the claim of purchase of property on prior date of registration of agreement along with payment details. Even the claim of purchase of property prior to the date of registration of agreement is verified, still the stamp duty value of property as on date of purchase agreement is required to be verified and reckoned for computation of Income as per mandate of the said provisions of the Act and difference amount is taxable under the head Income from other sources. 7.2 The AO has not taken on record the creditworthiness of the amount of ₹ 3,30,00,000/- taken from Ankur Orbit Enterprise w.r.to applicability of provisions of section 68 of the Income Tax Act, 1961. Upon query during the section 263 proceedings before the undersigned the assessee vide submission dtd 22/02/2019 has submitted that - the assessee had given advance of ₹ 3,30,00,000/- to the said Ankur Orbit Enterprises. We have paid ₹ 2,75,00,000/- on 04/06/2007 to the said Ankur Orbit Enterprises by Bankers cheque no. 167803 of SBI, Pali Market ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication which should have been made . It was in this backdrop that the learned PCIT invoked his powers under section 263 and held as follows:- In view of the findings mentioned hereinabove and in terms of provisions of section 263 read with Explanation 2, it is clear that the Assessment Order passed u/s 143(3) dated 29.08.2016 in the instant case for A.Y.2014-15 is passed without conducting proper inquiries or verification and without proper application of mind and hence, is an erroneous order which is prejudicial to the interest of revenue within the provisions of Sec. 263 of the Income-tax Act, on the above discussed issue. I, therefore, invoke the provisions of section 263 and set aside the impugned assessment order to be made after conducting inquiry into the limited issues as stated above and allowing reasonable opportunity to the assessee. 6. The assessee is aggrieved and is in appeal before us. 7. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the legal position. 8. Learned counsel s basic submission has three main planks (a) all the necessary facts were before the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing wrong with the order if all the facts stated therein are assumed to be correct. 9. On the facts of this case, we find that there is no material whatsoever to indicate, leave aside establish, that the Assessing Officer had examined the application of Section 56(2)(vii)(b) at all. Learned counsel s plea that this provision to section 56(2)(vii)(b) comes into play, overlooks the fact that application of proviso is entirely a factual matter which has not been examined at all, and, in any event, it is a highly contentious issue whether an allotment letter issued by a private builder, even if that allotment be bonafide, can be equated with DDA allotments referred to in CBDT Circular no 471 dated 15.10.1986. It is not each and every allotment by a builder which can be equated with the allotment letter by the DDA; that aspect has to be examined on merits and it is to be seen whether the terms of the scheme of allotment and construction of flats/houses by the cooperative societies or institutions are similar to those mentioned in para 2 of Board Circular No. 471 as is stipulated in CBDT circular No. 672. Para 2 of the CBDT circular no. 471, for ready reference, is set out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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