Case Law Details
Smt. Selvi Chittiraja Vs ITO (ITAT Chennai)
The next issue that came up for our consideration is additions of Rs.28,40,000/- made u/s.56(2)(vii) of the Income Tax Act, 1961. The facts with regard to impugned dispute are that the assessee has purchased property by entering into sale agreement on 25.07.2012 and paid advance amounting to Rs.7,50,000/- by cheque bearing no.874436 dated 25.07.2012 drawn on Indian Bank in favour of seller. The property has been registered in favour of the assessee on 02.04.2013. At the time of registration of sale deed, guideline value of the property was more than amount of consideration paid by the assessee for purchase of property. The Assessing Officer has invoked provisions of section 56(2)(vii) of the Act and made additions of Rs.28,40,000/- by considering guideline value of the property as on date of registration of sale deed on 02.04.2013. It was explanation of the assessee that as per first and second proviso of section 50C of the Act, where date of agreement fixing amount of consideration and date of registration for transfer of capital asset are not the same, value adopted or assessable by Stamp Valuation Authority on the date of agreement may be taken for the purpose of computing full value of consideration for such transfer, if amount of consideration or part thereof has been received by way of account payee cheque or bank draft or by use of electronic clearance system through a bank account. In this case, there is no dispute with regard to fact that the assessee had paid consideration through proper banking channel and further, guideline value of the property as on date of agreement itself is less than amount of consideration paid for purchase of property. If guideline value of the property as on date of agreement of sale is considered, then there is no difference between consideration paid by the assessee for purpose of purchase of property and value assessed by stamp duty valuation authority and thus, provisions of section 56(2)(vii) of the Act, cannot be invoked. Since, the assessee has satisfied conditions prescribed therein under 1st and 2nd proviso to section 50C of the Income Tax Act, 1961, the Assessing Officer has erred in invoking provisions of section 56(2)(vii) of the Act, and made additions towards difference between guideline value of the property and sale consideration. Hence, we direct the Assessing Officer to delete additions made towards difference in value of the property u/s. 56(2)(vii) of the Income Tax Act, 1961.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal filed by the assessee is directed against order of the learned Commissioner of Income Tax (Appeals)-7, Chennai, dated 27.09.2018 and pertains to assessment year 2014-15.
2. The assessee has raised following grounds of appeal:-
Please become a Premium member. If you are already a Premium member, login here to access the full content.
