2019 (6) TMI 1445

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.... made by the Assessing Officer u/s 56(2)(vii)(b) of the Income Tax Act, 1961 under the head 'Income from Other Sources'. 3. Briefly stated, the facts of the case are that the Assessing Officer (AO) on perusal of the purchase deed dated 10.09.2014 filed by the assessee noticed that the Government value for stamp duty purpose of the immovable property was more than the actual value as per the deed. The AO issued a show cause notice dated 10.11.2017 to the assessee stating that as per the purchase deed dated 10.09.2014, the assessee had purchased flat No. 2901 on 29th Floor, C-Wing, in the building named as Metropolis, Andheri (West), Mumbai admeasuring area of 123.36 sq. mtrs (carpet area) for a consideration of Rs. 88,30,008/- (excluding stamp duty and registration/other charges), whereas the Government value for stamp duty purpose is at Rs. 1,88,44,959/-. Therefore, the AO asked the assessee to explain why the difference of Rs. 1,00,14,951/- shall not be treated as income from other sources u/s 56(2)(vii)(b) of the Act.  The assessee filed a reply before the AO. However, the AO was not convinced with the said reply for the reason that the assessee had himself paid ....

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....ch the assessee has invested money had not commenced on 27.04.2012, but it commenced vide registered agreement dated 10.09.2014.  On the basis of the above facts, the Ld. CIT(A) further observed that in any purchase or sale agreement deed of immovable property to be covered u/s 53A of the Transfer of Property Act, is required to be a registered instrument for enforcing civil law rights, therefore, in absence of registration, the transaction will not fall u/s 2(47)(v) of the Act. The Ld. CIT(A) also referred to the order of the ITAT in Saamag Developers Pvt. Ltd. [TS-26-ITAT-2018(DEL) order dated 12.01.2018] wherein it is held that registration u/s 17(1A) of the Registration Act, 1908 is a prerequisite to give effective section 53A on the Transfer of Property Act.  Further reliance was placed by him on the decision in Anil D. Lohana [TS-466-ITAT-2017(MUM) order dated 25.09.2017], wherein it is held that the holding period of the property is to be reckoned from the date on which the assessee got right over the property by virtue of sale agreement.  The Ld. CIT(A) finally noted that the assessee has never doubted the valuation of stamp duty, as he has never sou....

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....ate of allotment.  In view of the above submissions, it is stated by the Ld. counsel that the assessee had received the immovable property as on 27.04.2012 (date of execution of agreement) and not on 10.09.2014 (date of registration). It is stated that as provisions of section 56(2)(vii)(b) were not applicable for the AY 2013-14, the addition made by the AO during AY 2015-16 is to be deleted. 5.1 The Ld. counsel of the assessee files a copy of the order of the of the Tribunal in the case of Babulal Shambhubhai Rakholia v. ACIT (ITA No. 338/Rjt/2017 for AY 2014-15), Sanjay Kumar Gupta v. ACIT (ITA No. 227/JP/2018 for AY 2014-15), Anita D. Kanjani v. ACIT (2017) 79 taxmann.com 67 (Mumbai-Trib), DCIT v. Deepak Shashi Bhusan Roy (2018) 96 taxmann.com 648 (Mumbai-Trib).  Further, the Ld. Counsel files a copy of the decision in Pr. CIT v. Vembu Vaidyanathan (2019) 101 taxmann.com 436(Bombay HC) and ACIT v. Shri Keyur Hemant Shah (ITA No. 6710/Mum/2017 for A.Y. 201314 dated 02.04.2019)(Mumbai ITAT). During the course of clarification, the decision in the case of CIT v. Balbir Singh Maini 86 taxmann.com 94 (SC) was brought to the notice of the Ld. counsel. In response....

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....ssee.  In the instant case, the dispute is in respect of receipt of the immoveable property i.e. between '' Letter of Allotment" dated 27.04.2012 issued by HDIL and "Agreement for Sale' between the assessee and HDIL dated 10.09.2014. That being so, the finding in the above case is not applicable here.  In Sanjay Kumar Gupta (supra), as recorded by the Tribunal the assessee had claimed to have purchased the property in question vide agreement dated 28.03.2013. Though the said agreement is not registered but only attested by the Notary, however, the payment of part sale consideration on 28.03.2013 is duly mentioned in the sale deed dated 26.04.2013. The AO considered the date of transaction as the sale deed dated 26.04.2013. Accordingly, the AO made the addition as per section 56(2)(vii)(b) of the Act by adopting the stamp duty value of the property as purchase consideration and the difference was assessed to tax. The Tribunal held that in the facts and circumstances of the case, when the agreement to sell dated 28.03.2013 has not been held to be bogus then the transaction would be treated to have been completed on 28.03.2013 and consequently the same would not fall i....

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....ould be the date on which the purchaser of a residential unit can be stated to have acquired the property. There is nothing on record to suggest that the allotment in construction scheme promised by the builder in the present case was materially different from the terms of allotment and construction by DDA. In that view of the matter, CIT(A) and Tribunal correctly held that the assessee had acquired the property in question on 31.12.2004 on which the allotment letter was issued."  In the instant appeal, the issue is not the allotment in construction scheme promised by the builder which is materially same as the terms of allotment and construction by DDA. Thus the case of the assessee in the instant case is distinguishable from the decision in Vembu Vaidyanathan (supra) relied on by the Ld. counsel. In the case of Shri Keyur Hemant Shah(supra), the assessee had acquired the rights in a duplex flat on 12th & 13th floor front facing the road admeasuring 1961.75 sq.ft and terrace measuring 881.5 sq.ft. as per the attached layout plan along with 4 car parking in building known as Tapovan vide allotment letter dated 26.02.2008 issued by DSD Builders & Developers Pvt. Ltd for t....

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....  The 'Agreement for Sale" dated 10.09.2014 stipulates at para 4 the following:  "4. The Purchaser/s hereby agree/s to purchase from the Developer and the Developer hereby agrees to sell FLAT No. 2901 admeasuring 123.36 Sq.Mtrs., (Carpet Area) (Which is inclusive of carpet area of Balconies and internal passage) on 29th Floor of C Wing, (hereafter called the "Said Flat") together with open stilt /stack/under stilt Parking space no. _____ (hereinafter called the "said parking Space") in the Building/Complex known as "Metropolis" under construction on the said property, and the said Flat and the Said Parking Space is hereinafter collectively referred to as the "Said Premises" for the price of Rs. 8830008/- (Rupees Eighty Eight Lakhs Thirty Thousand Eight Only), which prices shall be paid by the purchaser/s to the Developers as under: - (a) Rs. 300000/- (Rupees three lakhs Only) as earnest money deposit paid before the execution of these presents and Rs. 1466001 (Rupees Fourteen Lakhs Sixty six thousand and one only ) at the time of execution of these presents, making arrangement of Rs. 1766001/- (Rupees Seventeen lakhs sixty six thous....