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TMI Blog2021 (4) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... s erred in law and on facts in assuming jurisdiction in passing the order u/s 263, more so when the assessment order passed under section 143(3) r.w.s. 147 dated 29.10.2015 is neither erroneous nor prejudicial to the interest of Revenue. 3. That having regard to the facts and circumstances of the case, Pr. CIT has erred in setting aside the assessment order passed under section 143(3) of the Act by the Assessing Officer on the ground that the enquiries and verification which should have been made has not been conducted in terms of Explanation -2 to Sec. 263 and that the assessment order doesn't become erroneous. 4. That Pr. CIT has erred on fact and in law in not appreciating that the reply in specific reference to the claim of consideration value of the capital asset at Rs. 32,00,0007- was in accordance with the Circle Rate (Stamp Duty value) prevailing on the date of Agreement for Sale and that part consideration was received by Account Payee Cheques much prior to effecting the sale/ conveyance on 21.04.2011, was inquired during the assessment proceeding and that such explanation has been considered to be in accordance with law and that the same was allowed. 5. That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereas stamp value of the land on the date of transfer i.e. 21-04-2011 was at Rs. 77,96,000/- only. Thus the AO erred in not making addition of difference in the value of the property viz a viz stamp value as provided under section 50C of Act which is causing prejudice to the interest of revenue. Accordingly the PCIT issued notice under section 263 of the Act. 4.2 The assessee in response to the notice submitted that he has transferred residential property vide sale deed dated 21-04-2011 for Rs. 32 lakh. But the consideration was decided 3 month before the execution of sale deed which is evident from para 3 page 3 of the sale deed. Accordingly the assessee contended that as per amended proviso to section 50C of the Act, the stamp value for the purpose of capital gain should be taken from the date of agreement to sale. Thus in his case, the stamp value should be the sale consideration as applicable in the month of Jan 2011. The assessee further filed certificate of stamp value issued by Deputy Collector showing value at Rs. 6800 per square meter. Thus the assessee claimed that the value of the property in question is measured at Rs. 421.40 square meter, aggregating to stamp value o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00,001 25-01-2011 4,00,000 14-03-2011 4,50,000 15-03-2011 4,50,000 17-03-2011 4,50,000 17-03-2011 4,50,000 28-03-2011 4,50,000 28-03-2011 32,00,001 9.1 Accordingly, the assessee contended before the AO that the sale price of Rs. 32 lakh should be taken as sale consideration for working out the capital gain in pursuance to the provisions of section 50C of the Act as the Jantari value of land was of Rs. 28,65,520/- only in the month of January 2011. The contention of the assessee was duly accepted by the AO in the assessment framed under section 143(3) r.w.s. 147 of the Act vide order dated 29-10-2015. 9.2 However, the learned PCIT was of the view that the value of the property determined for the purpose of Stamp duty at the time of registration should be taken as the sale consideration in pursuance to the provisions of section 50C of the Act. Accordingly he held that the order passed by the AO is erroneous insofar prejudicial to the interest of revenue as discussed in the preceding paragraph. The provisions of section 50C of the Act has a direct bearing on the issue on hand which reads as under: 50C. (1) Where the consideration received or accruing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it can be inferred that the value of the property as determined by the assessee with the buyer of the property for transferring the property at the time of agreement shall be taken as the full value of consideration for the purpose of computing the capital gain under the provisions of section 48 of the Act. 9.6 A question arises whether the amendment brought in the proviso to section 50C of the Act as applicable with effect from 1 April 2017 can be applied for the year under consideration i.e. assessment year 2012-13. In this regard we find that this ITAT in the case of Dharamshibhai Sonani vs. ACIT in ITA No 1237/Ahd/2013 reported in 75 taxmann.com 141 has held that such amendment being clarificatory in nature is applicable retrospectively. The relevant finding of the ITAT reads as under: So far as section 50C is concerned, the Finance Act, 2016, with effect from 1-4-2017, inserted the provisos to section 50C. [Para 5] There cannot be any dispute that this amendment in the scheme of section 50C has been made to remove an incongruity, resulting in undue hardship to the assessee. Once it is not in dispute that a statutory amendment is being made to remove an undue hardship ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. The reasons recorded for reopening the assessment under section 147 of the Act are extracted below: " As per the AIR information, the assessee has sold immovable property for Rs. 32,00,001/- on 21st April 2021. Jantri value of the said property as per the stamp duty paid by the assessee is Rs. 77.96 lacs. The capital gain offered by the assessee in the return of income for A.Y. 2012-13 is therefore, much less than what he should have actually been offered as per the provision of the section 50C of the Act. Therefore I have reason to believe that the income chargeable to tax has escaped assessment within the meaning of section 147 of the Income tax Act." 9.10 The assessee during the assessment proceedings has made a reply vide letter dated NIL which is extracted below: I would like to state that I have attached the copy of letter given by the purchase of the said property stating that he received the possession of the sold property in the month of March 2011. So, in light of the above discussion, would like to state to your honour that the jantri value adopted by the stamp value authority of the sold property should not be considered which was prevailing in the mont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it is prejudicial to the interest of the revenue. However, exercise of such deemed powers conferred on the revisional authority as per Explanation 2 have to construed by strictly confining and subject to satisfaction of the conditions contemplated therein. We are of the considered view that to the extent making of inquiries and verification which in the opinion of the CIT the A.O should have made, as contemplated in Clause (a) of Explanation 2, though gives an edge to the opinion of the CIT as regards the inquiries and verifications which the A.O should have made, but then, such inquiries and verifications are not only required to be relevant for adjudication of the issue, but also should point out as to how the view arrived at by the A.O by not taking recourse to such inquiries and verification, can be faulted with and held to be wrong." 9.12 In view of the above and after considering the facts in totality we are of the view that the revision proceedings initiated by the learned PCIT under section 263 of the Act are not sustainable in the given facts and circumstances. Hence we quash the same. Thus the ground of appeal of the assessee is allowed. 10. In the result, the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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