By Jagdish D. Shah | Jagdish T. Punjabi
Chartered Accountants
15. Ranjana Construction Pvt. Ltd. vs. PCIT George George K. (J.M.) and B.R. Baskaran (A.M.) ITA No. 4308/Mum/2019 A.Y.: 2014-15 Date of order: 11th January, 2021 Counsel for Assessee / Revenue: N.R. Agrawal / Bharat Andhle
Sections 43CA and 263 – In a case where the A.O. has taken a possible view after inquiring into the matter and appreciating the facts and documents filed by the assessee, the PCIT has no jurisdiction to set aside the assessment
FACTS
The assessee e-filed its return of income for A.Y. 2014-15 declaring a total income of Rs. 1,60,260.
Vide an allotment letter dated 12th June, 2010, the assessee agreed to sell to Mr. Vasant Kumar Pujari, the buyer, Flat No. A-302 in Kailash Heights for a consideration of Rs. 36,65,000. He (the assessee) received an account payee cheque for Rs. 2,50,000 dated 22nd June, 2010 as token advance. Thereafter, he received Rs. 18,32,500 up to 20th December, 2012. The sale agreement was registered on 26th June, 2013. On the date of registration, the stamp duty value of the said flat was Rs. 57,48,160 which was reflected in the AIR on the Department website. In the course of assessment proceedings, a notice was issued u/s 142(1) asking the assessee to furnish the date of property purchased / sold details. (These were contained in the AIR information generated by the Department from the ITES.)
The assessment of total income of the assessee was completed u/s 143(3) and an order dated 8th September, 2016 was passed u/s 143(3) accepting the returned income.
Subsequently, the PCIT, after issuing a show cause notice to the assessee and rejecting its contentions, set aside the order passed u/s 263 and directed the A.O. to examine the issue after giving sufficient opportunity of being heard to the assessee. The PCIT held that:
i) the agreement does not mention allotment of the flat vide allotment letter dated 12th June, 2010;
ii) allotment letter is not forming part of the registered agreement;
iii) the assessee has not filed any evidence of having filed the allotment letter with the Stamp Duty Authority;
iv) the agreement does not mention about booking amount claimed to have been paid by the assessee vide the allotment letter;
v) the agreement mentions that the purchaser has perused the commencement certificate, plans and other documents and has approached the promoters for allotment of the flat. The allotment letter is dated 12th June, 2010 and the commencement certificate is dated 28th June, 2010 which contradicts the clauses in the agreement.
Aggrieved, the assessee preferred an appeal to the Tribunal.
HELD
The Tribunal observed that according to the learned PCIT, the business income should have been computed by taking the deemed consideration as on the date of registration and not on the date of agreement to sell as per the observations in the revisionary order. Besides, the Tribunal also found that this issue has been specifically raised by the A.O. in the notice issued u/s 142(1) wherein a copy of the AIR as generated by the ITES was attached and the assessee was called upon to reconcile the entries appearing therein. The assessee had duly filed reconciliation vide letter dated 24th August, 2016 submitting a copy of the sale agreement and also the necessary details of the said deal. The A.O., after examining such details, accepted the business income of the assessee based on the stamp value as on the date of the agreement to sell.
The Tribunal held that the A.O. has taken a possible view after inquiring into the matter and appreciating the facts and documents filed by the assessee. Since the A.O. took a possible view, the PCIT has no jurisdiction to set aside the assessment. The Tribunal found itself inclined to quash the revisionary proceeding on this count alone.
On merits, the Tribunal held that the assessee has a fool-proof case as the income has been assessed pursuant to sections 43CA(3) and (4) which clearly provide that if the date of agreement and the date of registration are not the same, the stamp value as on the date of agreement shall be taken for the purpose of computing the income of the assessee and not the date of registration.
The Tribunal allowed the appeal of the assessee by setting aside the order of the PCIT.
