| Question And Answer | |
|---|---|
| Subject: | section 56(2)(X)(b) |
| Category: | Income-Tax |
| Querist: | Ankur Agrawal |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | Booking of flat, income from other sources, section 56(2)(x)(b) |
| Date: | September 17, 2022 |
Mr. G booked a flat in FY 2010-11 and made the payment of booking amount through banking channels. Total consideration to be paid for the flat was Rs.30 Lacs.
The builder issued ‘Earnest Money Receipt’ for the same in FY 2010-11. Unregistered agreement was also entered into by the builder and Mr. G in F.Y. 2010-11.
In F.Y. 2010-2011Mr. H real brother of Mr. G also transferred some amount from his bank account to Mr. G bank account for making the payment to the builder.
Subsequently sum of the installments were paid from joint account of Mr. G and Mr. H.
In the agreement for sale executed before the sub registrar on payment of stamp duty of registration the name of Mr. G & Mr. H as the allottees/purchasers are mentioned.
The value taken by registrar for stamp duty is Rs.45Lacs in the yaer 2019.
The guideline value of the said flat in the year of booking i.e. F.Y. 2010-11 was less than Rs. 30 Lacs.
In limited scrutiny in the case of G & H for investment in immovable property after considering the above details & documents the AO of Mr. G accepted the returned income u/s 143(3).
In the case of Mr. H on the basis of same information the AO has issued a show cause notice for proposed variation proposing to tax 50% of difference between 45Lacs and 30 Lacs i.e. Rs.7.5 Lacs as income from other sources.
On the following issues:
- No agreement by Mr. H with builder in FY 2010-11.
- No payment to builder by Mr. H in FY 2010-11 directly from his bank account.
QUERY:
- Whether different treatment be given to Mr. H regarding the aforesaid addition when in the case of Mr. G (the co-owner in the same property ) returned income has already been accepted ?
- Whether in sec. 56(2)(x)(b) proviso 1&2 is qua all the co-purchasers or qua immovable property.
Please give detailed reply along with case laws and oblige.
Thanks and Regards
Tax Professional
Ankur Agrawal
It can be contested that the reassessment is on the basis of change of opinion. In the erstwhile reassessment regime, it was well settled that reassessment cannot be made on the basis of a change of opinion.
It is a settled position in law that no authority has the power to review its own order. Therefore, the concept of “Change of Opinion” should continue to hold good in the new reassessment regime as well.
Therefore, where the initial assessment was done under section 143(3) of the Income-tax Act, 1961 (Act) and a question on the said “information” was put to the Assessee, the Assessee responded to the same, irrespective of the fact that the observations of the Ld. Assessing Officer pertaining to the issue is contained in the Order under section 143(3) of the Act or not; Reassessment on the same issue would amount to “change of opinion” i.e., a review of its own order.
The Hon’ble Supreme Court in the case of Lily Thomas v. UOI & Ors. (2000) 6 SCC 224 observed that the dictionary meaning of the word “review” is “the act of looking; offer something again with a view to correction or improvement. It cannot be denied that the review is the creation of a statute. The power of review is not an inherent power. It must be conferred by law either specifically or by necessary implication.
Addition under section 56(2) (x) of the Act is qua recipient and not qua immovable property.