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TMI Blog2021 (2) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... Act with complete disregard to the fact that the said transfer of asset did not fall within the ambit of Section 50C and 56(2)(vii)(b) of the Act. - Rs. 13,90,191/-. 4. The Respondent erred in upholding the impugned assessment of Rs. 44,99,000/- as income of the Appellant with complete disregard to the Agreement to Sell dated 20th September, 2011 subsisted between the Appellant HUF and its Kartha and a Coparcener, the Vendor. - Rs. 13,90,191/-. 5. The Respondent erred in upholding the impugned assessment of Rs. 44,99,000/- as income of the Appellant with complete disregard to the Agreement to Sell dated 20th September, 2011 subsisted between the Appellant and its Kartha and a Coparcener, the Vendor merely out of her suspicion, surmise and conjecture stating that "The date of sale agreement being one day before the notification revising guidance value was issued also raise a question mark over its credibility". - Rs. 13,90,191/-. 6. The Respondent erred in upholding the impugned assessment of Rs. 44,99,000/- as income of the Appellant with complete disregard to the fact that the Vendor and the Purchaser are the same and the said transfer is a transfer of asset between the rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the Appellant is not liable to the same." Rs. 3,744/-. Brief facts of the case are as under : 2. Assessee is an HUF and filed its return of income on 18/07/2014 declaring total income of Rs. 17,45,460/-. The case was selected for scrutiny and notice under section 143(2) and 142(1) of the Act was issued to assessee. In response to statutory notices, representative of assessee appeared before Ld. AO and filed relevant details as called for. 3. Ld. AO noted that assessee during relevant financial year had purchased a site at measuring 315.0 ft.2 at 5th Main Road Jayamala Extension Bangalore from Sri. M.N. Belliappa along with 3 more persons for sum of Rs. 53,16,000/- and M/s. Gagan Constructions and Apartments. Assessee in his individual capacity, held GPA of the 3 individuals who had jointly sold the property to assessee. Ld. AO noted that the value of site as per the ITS details was Rs. 97,95,360/- and one half registration fee was charged by the sub registrar amounting to Rs. 98,150/-. Ld. AO was of the opinion that the fair market value of the site was therefore Rs. 98,15,000/-. 4. Ld. AO called upon assessee to explain the difference in the value. Assessee submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le deed have been perused. Section 56(2)(vii)(b) as amended w.e.f. 01/04/2014 is reproduced below: (vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or person or persons on or after the 1" day of October, 2009 (but before the 1 day of April, 2017), (a) Any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of/lie aggregate value u/such sum: (1) Any immovable property: (i) Without consideration, the stamp duly value of which exceeds fifty thousand rupees, the stamp duty value of such proper: (ii) For a consideration which is less than the stamp duly value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration: Provided that where the date of the agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp ditty value on the date of the agreement may be taken for the purposes of this sub-clause: Provided further that the said proviso shall apply only in a case where the amount of consideration referred to therei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is much less than the actual amount transferred to the developers M/s. Gagan Constructions. It is also pertinent that the Kartha, Shri M.N. Belliappa held the GPA for the original vendors of the site. The kartha has signed the sale agreement and the sale deed in three capacities i.e. GPA holder of the vendors, proprietor of the developers M/s. Gagan Construction and Apartments and also as the purchaser. The date of sale agreement being one day before the notification revising guidance value was issued also raise a question mark over its credibility The sale deed, as noted by the AO, was based on oral sale agreement between the appellant and the original vendors for acquiring the share of land on mutually agreed terms and conditions for a consideration of Rs. 53,16,000/-. It is mentioned in the sale deed that an advance of Rs. 40,00,000/- was transferred by the appellant to the developers i.e. M/s. Gagan Construction and Apartments and the vendors have also confirmed the receipt of the receipt of the same. However the dates of fund transfer of Rs. 40,00,000 are not mentioned in the sale deed. 5.2.4 It is apparent from the foregoing discussion that the sale agreement not being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... @5.6% of Rs. 98,12,500/- and registration fee of Rs. 98,150/-. He thus submitted that, Ld. AO made addition in the hands of assessee on presumption that, the guidance value as on the date of registration was higher than the agreement value because of which the difference was added in the hands of assessee. 11. Ld. AR submitted that there were 2 notifications that were issued by the Central valuation committee being: * Notification dated 17/04/2007 bearing No. CVC/BUD/5/2006-07 w.e.f. 19/04/2007; and * Notification dated 21/09/2011 bearing No. CVC-192010-11 w.e.f. 26 sector No. 2011 12. He submitted that as per the notifications the guidance value of the said property was purchased by assessee was as per the guidance value applicable at relevant time.: Per Notification dated Site in BBMP Per Sq. Ft Construction Rate Per Sq. Ft. For First Floor Composite Rate for Apartments Per Sq. Ft. 17.04.2007 wef 19.4.2007 3,000/- 520/- 2,640/- 21.09.2011 wef 26.9.2011 4,200/- 850/- 3,860/- 13. It was submitted that the sale agreement was entered on 20/09/2011 and the guidance value as on the date prescribed by the Central valuation committee that prevailed du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... member of HUF) in respect of the subject property that is less than the stamp duty valuation. It has been contended by the Ld. AR that, the transaction is exempt from tax as the transferor and transferee are "relative" as defined in Clause (e)(ii) to 3rd proviso to section 56(2)(vii) of the Act. 20. By Finance Act, 2012, the definition of "relative" also include any sum or property received by a Hindu undivided family from its members. This contention of the Ld. AR that HUF can receive property without attracting tax liability from its members deserves to be upheld. Admittedly the transferor and the transferee in the present facts of the case is the Karta, his individual capacity and the HUF itself. Therefore, the argument that, property received by HUF from its members, is not chargeable to tax. 20. We note that CIT(A) relied on provisions of section 50C to consider the value adopted by stamp duty authority on the date of agreement. This provision is applicable in case of recipient of sale consideration. Present case, assessee is the purchaser. We therefore reject applicability of Section 50 C to present facts. The Revenue is therefore debarred to hold the transaction under se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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