Case Law Details
Asha Vijay Vs ITO (ITAT Kolkata)
This case analysis focuses on the ITAT Kolkata order in the case of Asha Vijay Vs ITO. The main issue in this case is whether a sum of Rs. 9,74,950/- should be added to the assessee’s income under Section 56(2)(vii)(b) of the Income Tax Act. The ITAT examines whether the difference between the valuation for stamp duty purposes and the purchase cost disclosed by the assessee in the deed should be deemed as income. The key contention revolves around the applicability of Section 56(2)(vii)(b) to transfers that occurred before the accounting year 2014-15.
Analysis: The assessee, Asha Vijay, filed her return of income for AY 2015-16, disclosing a total income of Rs. 5,48,510/-. The Assessing Officer (AO) initiated scrutiny assessment and determined that the difference between the sale value disclosed in the sale deed and the value determined by the Stamp Duty Valuation Authority should be treated as deemed gift under Section 56(2)(vii) of the Act.
The appeal to the Commissioner of Income Tax (Appeals) did not provide relief to the assessee. However, before the ITAT, the assessee argued that the possession of the property was taken prior to the accounting year 2014-15, and therefore, the provisions of Section 56(2)(vii)(b) should not be applicable.
The ITAT referred to a judgment of the Allahabad High Court in the case of CIT vs. Shimbhu Mehra, which held that possession of a property constitutes transfer for the purposes of the Income Tax Act. In the present case, the assessee had taken possession of the property on 09.01.2013, which was prior to the accounting year 2014-15. Therefore, if the transfer was deemed to have taken place before 2014-15, no income could be deemed on account of the lower purchase price.
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