Shashi Jain. (Smt.) v. PCIT (2023) 201 ITD 33/225 TTJ 577 (Kol.)(Trib.)

S. 263 : Commissioner-Revision of orders prejudicial to revenue-Limited scrutiny-Purchase of residential property was entered by parties in AY 2008-09 even for consideration lower than market price, provisions of section 56(2)(vii)(b) would not be applicable as it came into existence from 1-10-2009-Revision order is quashed.[S. 56(2)(vii)(b)]

Assessee had entered into an agreement for sale with Developer on 30-1-2008 for purchase of residential property. Assessee’s return was selected for limited scrutiny in respect of purchase transaction of such property. Same was explained by assessee by furnishing sources of investment.  Assessing Officer accepted return of income of assessee for relevant assessment year.   Commissioner passed the Revision order alleging that  the  Assessing Officer had failed to make adequate and proper enquiries to ascertain true nature and period of transfer for purchase of property as well as failed to examine applicability of section 56(2)(vii)(b) since market price was much higher than consideration paid for said purchase. On appeal the Assessee contended that section 56(2)(vii)(b) was not applicable at time of booking of flat on 18-7-2006. Tribunal held tha section 56(2)(vii)(b) came into existence from 1-10-2009 and at that relevant point of time, said provision dealt with only those situations where transaction in immovable property was without consideration. Therefore, application of said provision could not be insisted in assessment years prior to assessment year 2014-15 where transaction in immovable property was with consideration, whether adequate or inadequate since such a situation was specifically made applicable for and from assessment year 2014-15. There was a valid and lawful agreement entered by parties in assessment year 2008-09 when subject property was transferred, mere fact that flat was registered in 2014 falling in assessment year 2015-16 did not contemplate application of provisions of section 56(2)(vii)(b) during year under consideration and, hence, assessment order was not erroneous and prejudicial to interest of revenue.  (AY. 2015-16)

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