TMI Blog2020 (10) TMI 425X X X X Extracts X X X X X X X X Extracts X X X X ..... uld 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 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 27.10.2015 admitting a total income of ₹ 2,58,110/-. The return was processed under Section 143(1) of the Act. Subsequently, the case was selected under Computer Aided Scrutiny Selection [for brevity 'CASS'] 'Limited Scrutiny' with regard to a purchase of a property by the assessee. The assessing officer after hearing the assessee, verifying the source of funds completed the assessment by order dated 28.12.2016 under Section 143(3) of the Act and made an addition of ₹ 8,00,000/-. 4. The Principal Commissioner of Income Tax, Madurai [for brevity 'PCIT'] invoked his power under Section 263 of the Act, issued show cause notice dated 26.10.2018 to the assessee for the reason that the assessee had purchased the immovable property by a sale deed registered as document no.7165 of 2013 on the file of Sub-Registrar, Thirumangalam for a consideration of ₹ 41,50,000/-, whereas, the guideline value fixed by the State Government was ₹ 77,19,000/- and there is a difference of ₹ 35,69,000/- which was not properly enquired into by the assessing officer and not considered during the course of assessment. For such reason, the assessing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther held that though the assessing officer verified the source of funds, he failed to apply the said provision, namely, Section 56(2)(vii)(b)(ii) of the Act. Thus, the PCIT rejected the explanation given by the assessee and set aside the assessment and referred back the same to the assessing officer to redo the assessment. The assessee challenged the said order dated 18.03.2019 passed under Section 263 of the Act by filing an appeal before the Tribunal. The Tribunal held that the value adopted for stamp duty purposes is taken as 'deemed consideration' under Section 56(2)(vii)b of the Act and this is only a deeming provision and there is no occasion for the assessee to explain the source for deemed consideration. Further, the Tribunal held that since the assessment was under limited scrutiny, it would be beyond the powers of the assessing officer to look into any other issue, which has come to his notice clearing the course of assessment and also faulted the PCIT for invoking his power under Section 263 of the Act. Challenging the said order, the Revenue is before us by way of this appeal. 9. We have heard Mr.M.Swaminathan, learned senior standing counsel assisted by Ms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . During the course of assessment proceedings in 'Limited Scrutiny' cases, if it comes to the notice of the Assessing Officer that there is potential escapement of income exceeding Rs. Five lakhs (for metro charges, the monetary limit shall be Rs.Ten lakhs) requiring substantial verification on any other issue(s), then, the case may be taken up for 'complete Scrutiny' with the approval of the Pr.CIT/CIT concerned. However, such an approval shall be accorded by the Pr.CIT/CIT in writing after being satisfied about merits of the issue(s) necessitating 'Complete Scrutiny' in that particula case. Such cases shall be monitored by the Range Head concerned. The procedure indicated at points (a), (b) and (c) above shall no longer remain binding in such cases. (For the present purpose, 'Metro Charges' would mean Delhi, Mumbai, Chennai, Kolkata, Bengaluru, Hyderabad and Ahmedabad).' 11. It is further submitted that the Tribunal in a subsequent decision, authored by the very same Hon'ble Member took note of the circular and decided the case against the assessee in ITA No.1498/Chny/2019 in the case of M/s Sahayamatha Salterns Private L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not clear as to what in the opinion of the PCIT is 'proper enquiry'. By using such expression, it presupposes that the assessing officer did conduct an enquiry. However, in the opinion of the 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 under Section 263 of the Act was not justified. 16. The 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. The 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. Therefore, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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