TMI Blog2022 (12) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... the only aspect open for adjudication is if the agreement dtd.29/3/2011 qualifies to be an agreement referred to in the proviso to section 56(2)(vii)(b). Though no issue in its respect stands raised before us, inasmuch as the assessee s return was selected for limited scrutiny, clarify that it is in our view within the competence of the ld. Pr. CIT to, as the revisionary authority, extend the scope of enquiry, requiring the assessing authority to enquire into areas impinging on matters at hand, or which comes to the notice of the AO in the course of his examination, and warrant further verification, as in the instant case. Reference for the purpose may be made to the decisions by the Jabalpur Bench of the Appellate Tribunal in Alankar Anr. [ 2022 (8) TMI 1312 - ITAT JABALPUR] and Nitin Sharma [ 2020 (10) TMI 75 - ITAT JABALPUR] - Assessee appeal dismissed. - I.T.A. No. 19/JAB/2021 - - - Dated:- 29-11-2022 - Shri Sanjay Arora, Hon ble Accountant Member Shri Manomohan Das, Hon'ble Judicial Member For the Appellant : Shri Rahul Bardia, FCA For the Respondent : Shri Sanjay Kumar, CIT-DR ORDER PER SANJAY ARORA, AM: This is an Appeal by the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt for sale of property was submitted before the AO, which was verified accepted. Hence provision of section 56(2)(vii)(b) is not applicable. Ld. Pr.CIT only opinion is that the agreement submitted is neither registered nor notarised. After verification and detailed scrutiny, the ld.AO framed the assessment and as such the same cannot be treated as erroneous and prejudicial and as such action u/s. 263 is bad in law. (4) The order passed by the ld. PCIT be quashed. 3.1 Before us, Shri Bardia, the ld. counsel for the assessee, was at pains the emphasize that the matter was examined by the AO during the assessment proceedings, even as he had admittedly omitted to make any reference thereto in his order. Toward the same, Shri Bardia would refer to the order-sheet entries dated 08/10/2017 11/10/2017 (PB pg.13); copy of agreement dated 29/3/2011 (PB pgs.16-20); copy of the bank statement exhibiting the clearing of the cheques prior to the date of the Agreement (PB pg.27); copy of the stamp valuation during f.y. 2010-11 (PB pg.71). All these documents, he explained, form part of the AO s record, even as certified below the paper-book, being in fact obtained from the AO s file th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the assessee s preliminary objections. Toward this, we may firstly reproduce section 56(2)(vii)(b), which reads as under:- Income from other sources. 56. (1) Income of every kind which is not to be excluded from the total income under this Act shall be chargeable to income-tax under the head Income from other sources , if it is not chargeable to income-tax under any of the heads specified in section 14, items A to E. (2) In particular, and without prejudice to the generality of the provisions of subsection (1), the following incomes, shall be chargeable to income-tax under the head Income from other sources , namely :- (i) to (vi) xxxxxxxxxxx (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) xxxxxxx (b) any immovable property,- ( i ) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; ( 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake sale value as Rs. 16,00,00,000/- for calculation of capital gain. Therefore, the appeal on this ground is allowed. Again, as apparent, the same has been on the basis that the transfer u/s. 2(47) took-place during the previous year relevant to AY 1996-97, i.e., prior to the amendment to s. 50C w.e.f. AY 2003-04. How, one wonders, could the same be of any assistance in the instant case (or in the case of SM), whereby the transfer took place on 14/08/2014 in pursuance of an agreement dated 29/3/2011 ? Though the said finding by the first appellate authority in the case of seller (vendor) is de hors the submissions before him, and which submissions correspond to the facts of the instant case, the finding afore-referred on which the assessment in the case of SM is based, being not relevant and, further, without any independent finding by the assessing authority, would be of no consequence. The decision in the case of co-owner and the seller, thus, would be of no assistance to the assessee s case and, in fact, considering the findings therein, reliance thereon is itself unfortunate and, rather, misleading. 5. The second preliminary objection before us is legal in nature. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year, even though the property was received in a later year, is a contradiction in terms. The date of the agreement is relevant only from the stand point of valuation, according recognition to the fact that contract for purchase stands entered into prior to the date of receipt. Apart therefrom this date is per se of no relevance except of course where the same itself marks the receipt of the property making the provision applicable with reference thereto. It is in the instant case undisputed that the transfer or the receipt of the property under reference took place in f.y. 2014- 15, i.e., on the substantial compliance of the agreement dated 29/3/2011. Para 3 of the said agreement, in fact, makes it abundantly clear that the vacant possession thereof shall be given by the vendor only at the time of execution and registration of sale deed. Para 5 of the Agreement obliges the seller (vendor) to bear all the dues in relation to the subject property, viz. taxes, ground rent, land revenue, etc., till the completion of the sale deed. Also, the entire payment of the sale consideration has also been during f.y. 2014-15, i.e., the previous year relevant to the current assessment year (AY 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... qua the applicability of s. 56(2)(vii)(b) and, consequently, non-recording of satisfaction in its respect. We, accordingly, while approving his order in principle, modify it to that extent. This would also meet the assessee s reliance on the decision in CIT vs. Padmavathi (in Tax Case Appeal No. 350/2020, dated 06/10/2020) by the Hon'ble Madras High Court (PB pgs. 139-147). Again, we are in agreement with the ld. Pr. CIT that the agreement referred to in s. 56(2)(vii)(b) is to be a valid agreement in law (for which reference is made to the decisions in ITO v. Vinod Kumar Chate (in ITA No. 60/JAB/2017 and 134/JAB/2018, dated 01/04/2022), rendered in the context of the analogous provision of s.50C, and Naina Saraf (supra), to cite two. We, as afore-stated, agree that the only question that survives is the applicability of the section 56(2)(vii)(b), in view of the provisos thereto, in the instant case. It is open for the revisionary authority to examine the same himself proceedings or direct the assessing authority to do so. However, once he adopts the latter course, it is not for us to interfere with the exercise of his discretionary power. We have clarified that the on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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