TMI Blog2020 (8) TMI 597X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration, the stamp duty value of such property required to be considered as the consideration paid and the said amount to be taxed u/s 56(2)(vii)(b) of the Act. In the instant case, as discussed earlier the assessee has paid the consideration and there was no evidence from the department to show that the assessee has paid the excess consideration over and above the sale deed. With effect from 01.04.2014, the Act has been amended and the new sub clause(ii) has been introduced to section 56(2)(vii)(b)in the statute. As per the provisions the Act from the A.Y.2014-15 sub clause (ii) has been introduced so as to enable the AO to tax the difference consideration if the consideration paid is less than the stamp duty value. The AO is not permitted to invoke the provisions of section 56(2)(vii)(b)(ii) in the absence of sub clause (ii) in the Act as on the date of agreement. The department has not brought any evidence to show that there was extra consideration paid by the assessee over and above the sale agreement or sale deed. No other case law of any high court supporting the contention of the department was brought to our notice by the Ld.DR. Therefore, we hold that the Ld.CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) viewed that the decision is squarely applicable in the assessee s case, since the agreement for sale was entered into by the assessee for the purpose of purchase of the property in August, 2012 related to the Financial Year 2012-13, relevant to the Assessment Year 2013-14, which is prior to insertion of section 56(2)(vii)(b) of the Act. The provisions of section 56(2)(vii)(b) was introduced in the Finance Act, 2013 w.e.f. A.Y.2014-15. Hence, the Ld.CIT(A) held that section 56(2)(vii)(b) has no application in the assessee s case and accordingly deleted the addition made by the AO and allowed the appeal of the assessee. 4. Against the order of the Ld.CIT(A) the revenue has filed appeal before us and raised grounds mostly on application of section 50C and section 56(2)(vii)(b) of the Act. The contention of the revenue is that section 50C and section 56(2)(vii)(b) are independent provisions related to different situations and the case law decided for application of section 50C cannot be applied for deciding the issue relating to the provisions of section 56(2)(vii)(b) of the Act. The Ld.DR further submitted that the issue involved in this case is the applicability of section 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that the Ld.CIT(A) has rightly allowed the appeal of the assessee and no interference is called for, and requested to uphold the order of the Ld.CIT(A). The assessee also relied on the decision of this Tribunal in the case of D.S.N.Malleswara Rao in I.T.A. No.538/Viz/2018 dated 30.08.2019, Venkateswara Vara Prasad Rao Karipineni in I.T.A.No.178/Viz/2019 dated 15.11.2019and argued that the case of the assessee is squarely covered by the decisions of M.Siva Parvathi, D.S.N.Malleswara Rao and Venkateswara Vara Prasad Rao Karipineni(supra) of this Tribunal. 5.1. Responding to the argument of the Ld.AR, the Ld.DR submitted that proviso to section 56(2)(vii)(b) is applicable in the instant case, hence requested to restore the assessment order. 6. We have heard both the parties and perused the material placed on record. The question to be decided in the instant case is whether in the facts and circumstances of the case, provisions of section 56(2)(vii)(b)(ii) are applicable or not. The provisions of section 56(2)(vii)(b)(ii) came into statute by Finance Act 2013 w.e.f. 01.04.2014 i.e., A.Y.2014-15. In the instant case, the assessee had entered into agreement for purchase of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions7iive fallen in the transition phase of law, La, the sale agreement was entered before the introduction of s. 50C and the registration was completed after the introduction of said section. As pointed out by Hon'ble apex Court in the case of K.P. Varghese (supra), the assessees have only fulfilled the contractual obligation imposed upon them by virtue of the sale agreement The ratio of the decisions in the cases of. Nirmal Textiles (supra) and Laxman Singh (supra) is that the character of the transaction vis-a-vis IT Act should be determined on the basis of the law that prevailed on the date the transaction was initially entered into. However actual computation of income and income-tax would be made as per the law existing on the 1st April of the relevant assessment year. If we look at the impugned transactions from the point of view of this legal proposition, we notice that the provisions of s. 50C cannot be applied to the sale agreement as the said section was not available in the statute book at that time. Even otherwise, as stated earlier, there is no suppression of actual consideration. Consequently, since the final registration of the sale is only in fulfilment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for deciding the taxable income. The provisions u/s 56(2)(vii)(b) which are applicable for the A.Y. 2013-14 reads as under : (vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009 but before the 1st day of April, 2017,- (a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum; (b) any immovable property,- (i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; 6.2. For the period from 01.10.2009 to 01.04.2014 i.e. up to A.Y. 2014-15, the above provisions are applicable. Thus where any individual or Hindu Undivided Family receives any immovable property without consideration, the stamp duty value of such property required to be considered as the consideration paid and the said amount to be taxed u/s 56(2)(vii)(b) of the Act. In the instant case, as discussed earlier the assessee has paid the consideration and there was no evidence from the department to show that the assessee has paid the excess consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as rightly applied the decision of this Tribunal in the assessee s case and deleted the addition. Hence, we do not find any infirmity in the order of the Ld.CIT(A) and the same is upheld. 7. Ground No.(vi), (vii) and (viii) are related to the adoption of fair market value as certified by the registered valuer for the purpose of section 56(2)(vii)(b) of the Act. Since, we have decided the appeal on the issue with regard to application of provision of section 56(2)(vii)(b) in favour of the assessee and against the revenue, we consider, it is not necessary to adjudicate the ground Nos.(vi), (vii) and (viii), though the Ld.AR argued that the assessee s case is covered by the decision of this Tribunal in the case of Venkateswara Vara Prasad Rao Karipineni in I.T.A.No.178/Viz/2019 dated 15.11.2019. Accordingly, the appeal of the revenue is dismissed. 8. The assessee filed cross objections supporting the order of the Ld.CIT(A). Since, we have dismissed the appeal of the revenue, the cross objections of the assessee stands dismissed. 9. In the result, appeal of the revenue as well as the cross objections of the assessee are dismissed. Order pronounced in the open court on 17th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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