Asstt. CIT v. Sri Anala Anjibabu [ITA No. 415/Viz/2019, Cross Objection No. 10/Viz/2020 (Arising out of ITA No. 415/Viz/2019), dt. 17-8-2020] : 2020 TaxPub(DT) 3193 (Vizag.-Trib.)

Addition under section 56(2)(vii)(b)(ii) for difference in stamp value vs. actual consideration of purchased immovable property

Facts:

Assessee in August, 2012 (Assessment Year 2013-14) purchased a property for INR 5 crores the stamp value of which was Rs. 12.67 crores. The registration however took place only on 28-10-2013 (Assessment Year 2014-15). The difference was added as income by assessing officer under section 56(2)(vii)(b)(ii) in assessment year 2014-15 which did not exist in the statute for assessment year 2013-14 but was introduced vide Finance Act, 2013 with effect from 1-4-2014 (Assessment Year 2014-15). Commissioner (Appeals) citing judicial precedence under section 50C allowed the appeal of the assessee that the said section did not exist in the assessment year of purchase but only in the next assessment year so addition cannot be fastened. An aggrieved department went in higher appeal to ITAT claiming that the said section did exist in the year of registration of the agreement and the judicial precedence under section 50C is for seller while section 56(2)(vii)(b) is for buyer thus divergent provisions so the citation cannot be applied.

Held in favour of the assessee/against the department by the ITAT holding that --

Section 56(2)(vii)(b)(ii) did not exist in the year of purchase. Date of registration is only a procedure and post registration the document dates back to the actual date of purchase/transfer so the addition could not be sustained.