Tribunal upholds Income Tax Act addition of Rs. 1,00,14,951, CIT(A)-3 order confirmed. Appeal dismissed.

The Tribunal upheld the addition of Rs. 1,00,14,951/- under section 56(2)(vii)(b) of the Income Tax Act, 1961, confirming the validity and legality of the order dated 09.08.2018 by CIT(A)-3, Thane. The appeal was dismissed, and the order pronounced on 10/06/2019.

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Issues Involved:
1. Validity of the order dated 09.08.2018 by the CIT(A)-3, Thane.
2. Legality of the addition of Rs. 1,00,14,951/- under section 56(2)(vii)(b) of the Income Tax Act, 1961.

Detailed Analysis:

1. Validity of the Order Dated 09.08.2018 by the CIT(A)-3, Thane:
The assessee argued that the order by CIT(A)-3, Thane was arbitrary, against natural justice, unlawful, and invalid. The Tribunal, however, upheld the order of the CIT(A), dismissing the appeal filed by the assessee. The Tribunal found that the CIT(A) had correctly analyzed the facts and applied the relevant legal provisions, including section 56(2)(vii)(b) of the Income Tax Act, 1961.

2. Legality of the Addition of Rs. 1,00,14,951/- Under Section 56(2)(vii)(b):
The core issue was whether the addition of Rs. 1,00,14,951/- made by the Assessing Officer (AO) under section 56(2)(vii)(b) was justified. The AO noted that the government value for stamp duty purposes of the immovable property was higher than the actual purchase price, leading to the addition under the head "Income from Other Sources."

- Assessee’s Argument:
The assessee contended that the property was booked on 27.04.2012, with an advance payment of Rs. 3,00,000/-, and the relevant date for the transaction should be considered as 27.04.2012. The assessee argued that section 56(2)(vii)(b) was introduced by the Finance Act, 2013, effective from 01.04.2014, and thus not applicable to the assessment year 2015-16.

- CIT(A)’s Findings:
The CIT(A) rejected the assessee's argument, stating that the payment on 27.04.2012 was merely an earnest money deposit. The actual execution of the purchase was on 10.09.2014, as per the registered deed. The CIT(A) emphasized that the transaction must be registered to be enforceable under section 53A of the Transfer of Property Act.

- Tribunal’s Analysis:
The Tribunal examined various case laws and the facts presented. It concluded that the “Letter of Allotment” dated 27.04.2012 could not be considered the date of execution of the agreement. The “Agreement for Sale” dated 10.09.2014 was deemed to be the relevant date for the transaction. The Tribunal cited the Supreme Court's decisions in Alapati Venkataramiah v. CIT and CIT v. Podar Cements Pvt. Ltd., which held that the transfer occurs on the date of execution of the registered document, not the date of registration or possession.

The Tribunal also referred to section 56(2)(viii)(b)(ii), which stipulates that if immovable property is received for a consideration less than the stamp duty value by an amount exceeding Rs. 50,000/-, the excess amount is chargeable to tax as income from other sources. This provision was applicable from the assessment year 2014-15.

- Conclusion:
The Tribunal upheld the addition made by the AO, agreeing with the CIT(A)’s reasoning and findings. The appeal by the assessee was dismissed, and the order of the CIT(A) was confirmed.

Final Judgment:
The appeal was dismissed, and the order pronounced in the open Court on 10/06/2019. The Tribunal upheld the addition of Rs. 1,00,14,951/- under section 56(2)(vii)(b) of the Income Tax Act, 1961, confirming the validity and legality of the order dated 09.08.2018 by CIT(A)-3, Thane.

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