If provisions to tax was not available in the statute as on the date of entering into the agreement, the same cannot be made applicable subsequently
There are various cases wherein addition is done in the hands of the Assessee U/s 56(2)(x) [Earlier, Section 56(2)(vii)(b)] for purchase of property below its stamp duty valuation i.e., ready reckoner value. One may note that the provision of section 56(2)(vii)(b) was introduced in the Income Tax Act-1961 by the FA-2013 w.e.f. financial year commencing from 1st April 2013. The question arises as to whether the addition is permissible Here is a landmark ruling by ITAT Visakhapatnam in the case of ACIT Vs Sri Anala Anjibabu [I.T.A. No. 415/Viz/2019] which has held that the provision of provisions of section 56(2)(vii)(b)(ii) were not available in the statute as on the date of entering into the agreement, the same cannot be made applicable to the assessee.
In this case, ITAT observed as under:
“The issue under consideration is whether provisions of section 56(2)(vii)(b)(ii) are applicable on difference between consideration paid for purchase of property and SRO value as on date of agreement?”
The department has not made out any case of application of 56(2)(vii)(b) and since the provisions of section 56(2)(vii)(b)(ii) were not available in the statute as on the date of entering into the agreement, following the reasoning given in the case of M.Siva Parvathi & Others (supra), the same cannot be made applicable to the assessee. The department has not brought any evidence to show that there was extra consideration paid by the assessee over and above the sale agreement or sale deed. No other case law of any high court supporting the contention of the department was brought to our notice by the Ld. DR. Therefore, ITAT hold that the Ld.CIT(A) has rightly applied the decision of this Tribunal in the assessee’s case and deleted the addition. Hence, ITAT do not find any infirmity in the order of the Ld.CIT(A) and the same is upheld.
The copy of the order is as under:
1597647509-I.T.A.NO.415-VIZ-2019 AND CO NO.10-VIZ-2020 ANALA ANJIBABU, VISAKHAPATNAM_compressed
