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TMI Blog2023 (4) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. 2. Assessee has taken five grounds of appeal, challenging the invocation of revisionary proceeding u/s. 263 of the Act and order passed thereafter. In the course of appellate proceeding, additional ground has also been raised contending that exercise of power u/s. 263 of the Act by the Ld. Pr. CIT is without looking into the provisions of section 56(2)(vii)(b) of the Act which was beyond the purview of the Ld. AO as the case was selected for limited scrutiny only with the reason being 'purchase of property'. 3. From the perusal of the additional ground taken by the assessee, we note that it is more in the nature of peripheral argument on the ground taken by the assessee in the Memo of Appeal. Thus, we do not find appropriate to give a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explaining the facts of the case and the position of law in respect of applicability of section 56(2)(vii)(b) of the Act vide her reply dated 16.12.2019 which has been reproduced in the impugned order. 4.2. We note that assessee had furnished a detailed explanation on her transaction of purchase of property even before the Ld. Pr. CIT vide letter dated 21.11.2019 dealing with the facts of the transaction as well as the position of law applicable on the said transaction. The same is extracted below : 4.3. Ld. Pr. CIT did not find favour with the assessee on the submissions made before him and drew his consideration that the assessment order passed u/s. 143(3) of the Act by Ld. AO dated 07.07.2017 is erroneous insofar as it is prejudicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee is a partner. According to the assessee, these payments were made prior to the date of agreement for sale which was entered into between the developer and the assessee on 30.01.2008. It was submitted that although registry of the conveyance deed for the property was executed in the FY 2014-15 but the agreement to purchase the said property was executed in FY 2007-08 for which a part payment was made by cheque as stated above, therefore, provisions of section 56(2)(vii)(b) of the Act are not applicable in the present case of the assessee. 6. From the decision drawn by Ld. Pr. CIT, we note that there are twofold contentions which have been dealt with, first being in respect of Ld. AO has failed to make adequate and proper enquirie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make proper enquiry. It is not clear as to what in the opinion of Ld. Pr. CIT is "proper enquiry". By using such expression, it principally suggests that Ld. AO did conduct an enquiry. However, in the opinion of Ld. Pr. CIT, the enquiry was not proper for which nothing is stated in clear terms as to how and why the enquiry was not proper. Further, we note that reference has been made to two separate clauses to Explanation (2) to Section 263 which dealt with two different situations. It leads us to believe about the indecisiveness on the part of the Ld. Pr. CIT. 7. On the second fold of the contentions, let us first understand the position of law from the relevant provisions of Section 56(2)(vii) which are reproduced as under. The pre-amend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of this sub-clause: Provided further that the said proviso shall apply only in a case where the amount of consideration referred to therein, or a part thereof has been paid by any mode other than cash on or before the date of the agreement for the transfer of such immovable property." 7.2. From the above, we note that section 56(2)(vii) was originally introduced in the statute book w.e.f. 01.10.2009 which was not in existence when the impugned agreement to purchase the property was executed i.e. on 30.01.2008. Thus, Section 56(2)(vii) came into existence after the execution of agreement to purchase of property. The purchase consideration of Rs.31,24,430/- was fixed by this agreement for purchase and part payment had already been mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sec. 56(2)(vii)(b) but not before that. Hence, applicability of the said provision in such cases, could not be insisted in the assessment years prior to a A.Y. 2014-15. Having said this, in this case, there was a valid and lawful agreement entered by the parties long back in A.Y. 2008-09 only, when the subject property was transferred and substantial obligations were discharged. The law contained in Section 56(2)(vii)(b) as stood at that point of time, did not contemplate a situation of a receipt of property by the buyer without inadequate consideration. Hence, we are of considered view that ld. Pr.CIT erred in applying the said provision. Because of the mere fact that the flat was registered in the year 2014 falling in A.Y. 2015-16, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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