TMI Blog2021 (9) TMI 766X X X X Extracts X X X X X X X X Extracts X X X X ..... act Act, 1872. We also find that such agreement was acted upon by the parties and pursuant to the allotment letter, the assessee paid a substantial amount of consideration of ₹ 45,26,233/-, as early as in the year 2008 itself. We do not find merit in the contention of the ld. CIT that it was a mere provisional attachment which was subject to further changes because of the unexpected happening which may be instructed by the approving authority, resulting into increase or decrease in the area and so on because it is a standard practice so as to save the seller (builder) from the unintended consequences - we are convinced that the parties had already entered into an agreement by way of the allotment letter in on 11.11.2009 falling in A.Y. 2010-11. There was a valid and lawful agreement entered by the parties long back in A.Y. 2010-11 only, when the subject property was transferred and substantial obligations were discharged. The law contained in S. 56(2)(vii)(b) as stood at that point of time, did not contemplate a situation of a receipt of property by the buyer with for inadequate construction. Hence, we are of the considered view that the ld. Pr.CIT erred in applying the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assumption of jurisdiction u/s 263 is not permissible. The impugned order dt. 28.02.2020 therefore, lacks valid jurisdiction u/s 263 of the Act and hence, the same kindly be quashed. Alternatively and without prejudice to the above 3.1 The ld. Pr. CIT 2, JAIPUR erred in law as well on the facts of the case in applying the provisions of sec. 56(2)(vii)(b)(ii), which is completely contrary to the provisions of the law and the facts available on the record, hence the impugned finding that the assessment order passed u/s 143(3) 21.12.2017 was erroneous and prejudicial to the interest of the revenue to the extent of short assessment of ₹ 16,42,994/-, deserves to be completely quashed and set-aside. 3.2 The Id. Pr. CIT 2, JAIPUR further erred in law as well on the facts of the case in denying the benefit of the First Proviso to Sec.56(2)(vii)(b)(ii) and completely ignoring the facts already available on record that there was a difference between the date of agreement and the date of the registration of the property. Therefore, the stamp duty valuation must have been computed w.r.t the former date only. Hence the appellant kindly be declared as entitled to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue by observing as under: 5. I have gone through the submissions filed by the AR, the assessment order and the case records in this case. It is seen that the return of income for A.Y. 2015-16 was e-filed at a total income of ₹ 27,38,450/- on 26.08.2015. The case was selected for limited scrutiny through CASS on the reasons of Purchase of property . The assessment was completed on 21.12.2017 accepting the returned income. Assesse in the year under reference had purchased an immovable property, jointly with her share as 50%, for a consideration of ₹ 70,26,233/-. It is further seen that the sale deed/conveyance deed in respect of this property was entered into on 09.12.2014 and the sale deed was also got registered on 09.12.2014. It's value for stamp duty purposes was taken at ₹ 1,03,12,220/-. Thus, there was a difference of ₹ 32,85,987/- and 50% thereof comes to ₹ 16,42,994/-. It is seen that the assesse applied for the flat on 23.09.2006. In response thereto, the assesse was issued allotment letter dated 06.03.2009. It is mentioned in the allotment letter that flat no. 201-Ruby was provisionally allotted which was subject to further chan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned order passed by the ld. PCIT on the grounds mentioned above. The ld AR appearing on behalf of the assessee has reiterated the same arguments as were raised before the ld. Pr.CIT and has also relied upon the written submissions filed by the assessee before us and the contents of the same are reproduced below: 1. Legal Position on Sec.263 Judicial Guideline: Before proceeding, we may submit as regards the judicial guideline, in the light of which, the facts of this case are to be appreciated. 1.1 The pre-requisites to the exercise of jurisdiction by the Commissioner u/s 263, is that the order of the Assessing Officer is established to be erroneous in so far as it is prejudicial to the interest of the Revenue. The Commissioner has to be satisfied of twin conditions, namely (i) The order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If any one of them is absent i.e. if the assessment order is not erroneous but it is prejudicial to the Revenue, Sec.263 cannot be invoked. This provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B 8-14). On 11.11.2009, the assesse agreed to purchase the property measuring 2150 Sq. ft at the rate of 3,050/- per Sq. ft. for a sum of ₹ 65,57,500/-(₹ 70,26,233/- including registration, stamp and maintenance) as per terms and condition mentioned in the allotment letter dated 06.03.2009. (PB 8-14). 2.3 Pertinently, the assesse paid ₹ 45,26,233/- through various cheques as mentioned in the registered sale deed before 05.04.2008 (PB 23). Thus, the maximum purchase consideration was paid at the time of agreement to purchase itself in F.Y. 2009-10 (A.Y. 2010-11) and the purchase was de facto completed except for the formality of registration only. The balance amount of ₹ 20,31,267/- (out of total purchase consideration of ₹ 65,57,500/) was kept pending because of security and for registration purpose only. 2.4 The facts of this case clearly suggest that the purchase transaction effectively took place in A.Y. 2010-11 itself only and not in A.Y. 2014-15 when actual registration took place. In absence of clause (ii) in S.56(2)(vii)(b), the AO could not have covered the transactions of inadequate consideration. Therefore, the case of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 009. 4.1 Allotment Letter not provisional : The ld. Pr. CIT however, alleged that such allotment letter dated 06.03.2009 was a provisional allotment and was subjected to further changes but a perusal of relevant clauses at Pg-1 (PB 9) shows that the provisional nature of allotment was only because of some unexpected happenings like some changes which may be by the Authority or by the Architect or by the Builder which may result into increase and decrease in the area or where there is absolute deletion of the apartment from the sanction plan. But for all intended and practical purposes it was a complete agreement between the parties which was even duly acted upon by both of them. Kindly refer Hansmukh N. Gala (infra). He relied on the following case laws: i. Shikha Birla Vs. Ambience Developers Pvt. Ltd., MANU/DE/2524/2008 (DPB 36-44) ii. In another case before Maharashtra RERA Appellate Tribunal, Dilip M. Muni and Ors. Vs. Monarch Qureshi Builders, MANU/NULL/0062/2019, (DPB 28-35). 5. Another aspect, having an important bearing over the issue in hand is that the provision uses the word receives in the context of the assesse buyer but does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble ITAT in the case of Sanjay Kumar Gupta vs. ACIT, Jaipur. The AR has pleaded that the order passed by DCIT, Circle - 6, Jaipur was not erroneous and prejudicial to interests of revenue. 5.2 Therefore, the SDV as on date of agreement (06.03.2009 / 11.11.2009) must have been taken for the purpose of invoking S.56(2)(vii)(b). The SDV on the date of agreement of was almost the same (agreed consideration). Since there is no difference between the SDV and the purchase consideration. There was no scope of making any addition. The ld. AR relied on the following case laws: i. Bajranglal Naredi vs. ITO (2020) 203 TTJ 925 (Ranchi) ii. ACIT vs. Anala Anjibabu (2020) 207 TTJ 239 (Visakha) iii. Sanjay Kumar Gupta vs. JCIT in ITA no. 227/JP/2018 order dated 05.10.2018 iv. Hansmukh N. Gala vs. ITO (2015) 173 TTJ 537 (DPB 23-27), v. CIT vs. Kuldeep Singh (2014) 270 CTR (Del) 561. 6. No understatement established by the revenue: There is no allegation nor there is any evidence to show that the assessee has actually paid extra amount over and above the agreed purchase consideration of ₹ 70,26,233/, which is the basic purpose and the u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O decided not to invoke S.56 (2)(vii)(b) of the Act. Thus, the AO did form an opinion and it was nothing but a case of substitution of opinion by the ld. Pr. CIT. From the factual and legal submission made hereinabove, it is evident that the AO has taken a possible view. Merely because the order is brief and cryptic, that does not render it to be erroneous and prejudicial to the interests of revenue. The ld. Pr. CIT has no jurisdiction u/s 263 to revise the order of the AO simply because he has not made elaborate discussion in the order with regard to the reason mentioned in the CASS. He relied on the decision in the case of Ved Prakash Contractors vs. CIT (2016) 175 TTJ_UO 19 (Chd. Hence, there was no error committed by the AO therefore, the subjected assessment was beyond the scope of S.263 and deserves to be quashed. 5. On the other hand, the ld CIT-DR has relied on the order passed by the ld. Pr.CIT. 6. We have heard the ld. Counsels of both the parties and have perused the material placed on record. We have also deliberated upon the decisions cited in the orders passed by the authorities below as well as cited before us and we have also gone through t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns all the substantive terms and conditions which create the respective rights and obligations of the parties i.e. the buyer (assessee) and the seller (the builder) and bind the respective parties. The allotment letter provided detailed specification of the property, its identification and terms of the payment, providing possession of the subjected property in the stipulated period and many more. Evidently the seller (builder) has agreed to sale and the allottee buyer (assessee) has agreed to purchase the flat for an agreed price mentioned in the allotment letter. What is important is to gather the intention of the parties and not to go by the nomenclature. Thus, there being offer and acceptance by the competent parties for a lawful purpose with their free consent, we find that all the attributes of a lawful agreement are available as per provisions of the Indian Contract Act, 1872. We also find that such agreement was acted upon by the parties and pursuant to the allotment letter, the assessee paid a substantial amount of consideration of ₹ 45,26,233/-, as early as in the year 2008 itself. We do not find merit in the contention of the ld. CIT that it was a mere provisional a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidences available on material, we are convinced that the parties had already entered into an agreement by way of the allotment letter in on 11.11.2009 falling in A.Y. 2010-11. 8. Now we come to the provisions of S. 56(2)(vii), which stood prior to the amendment. ((b) any immovable property,- (i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; The Finance Act, 2013 inserted clause (ii) in S. 56(2)(vii)(b) reading as under: (ii) for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration The pre amended law evidently did not cover a situation where an immovable property was received by an individual or HUF for a consideration, whether adequate or inadequate, whether consideration was less than the stamp duty valuation by an amount exceeding ₹ 50,000/-. In other words, the pre amended law which was applicable up to A.Y. 2013-14 never contemplated such a situation and it was only in the amended law, specifically made applicable for and f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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