| The Tax Publishers2020 TaxPub(DT) 4451 (Jab-Trib) INCOME TAX ACT, 1961
Section 56(2)(viib)(ii)
No doubt, the word employed in section 56(2)(vii) is 'receives', however, It is only a de facto transfer, which stands recognized under section 2(47)(vi), that would result in a de facto ownership, fulfilling the requirement of 'receipt' under section 56(2)(vii) inasmuch as it enables one to exercise, for all practical purposes, rights in and over the property 'received'.
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Income from other sources - Applicability of section 56(2)(viib)(ii) - Receipt of property for consideration less than stamp duty value - De facto transfer leading to de facto ownership stood completed on 30-3-2013--Dejure ownership completed on 24-4-2013
Assessee, purchased a piece of land vide sale deed dated 30-3-2013 for a consideration of Rs. 50 lakhs, i.e., as against the stamp valuation of Rs.2 crores. The same was presented for registration with office of the Sub-Registrar, Jabalpur on 30-3-2013 itself (at 6:45 PM), and duly registered on 24-4-2013. As per AO, transfer, took place on 24-4-2013, attracting section 56(2)(vii)(b)(ii). Held: No doubt, the word employed in section 56(2)(vii) is 'receives'. The same, again, could only mean receipt in his own right, assuming effective control over and right on the usufruct of property, implying a de facto ownership. It is only a de facto transfer, which stands recognized under section 2(47)(vi), that would result in a de facto ownership, fulfilling the requirement of 'receipt' under section 56(2)(vii) inasmuch as it enables one to exercise, for all practical purposes, rights in and over the property 'received'. While the sale, resulting in a de jure ownership, was complete only on 24-4-2013, the de facto transfer, leading to a de facto ownership, got completed earlier on 30-3-2013 on execution of instrument of sale, with each party having fulfilled his part of the contract to transfer. Accordingly, there was receipt of subject land by assessee on 30-3-2013, i.e., during the previous year relevant to assessment year 2013-14, the immediately preceding year. The taxable event under section 56(2)(vii)(b) thus took place during said year, and not the concerned year. For that year, the law did not bring short consideration to tax, but only where subject property was received without consideration, invocation of section 56(2)(vii)(b)(ii) for the concerned year was thus not sustainable in law.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2014-15
IN THE ITAT, JABALPUR BENCH
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