TaxTMI 
TaxTMI 
2022 (11) TMI 174
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....cr.) which should have been brought to tax as "Income from other source". 3 The appellant craves leave to amend or alter any ground or add a new ground which may be necessary." 2. Both these grounds of appeal are based on similar facts, therefore, the same are adjudicated together. 3. The fact in brief is that assessee filed return of income on 04.08.2016 declaring a total income at Rs.1,11,640/-. The case was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued on 29.07.2017. During the course of assessment the A.O noticed that assessee had executed purchase agreement in respect of flat No.A3- 3405 for agreement value of Rs.5,62,28,500/- which had stamp duty value of Rs.8,05,06,000/-. The assessee was show caused to explain why the difference between agreement value and stamp duty value should not be added to the total income as income from other sources as per Sec. 56 of the I.T. Act. The assessee explained that above referred Flat A3 - 3405 of India Bull Sky Forest was acquired in lieu of Flat No. 3907 in India Bull Sky Suites. Flat No. 3907 was accepted by the assessee in lieu of original flat No. 4707 which was originally booked by the asse....
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....4F of the Act. 6. Heard both the side and perused the material on record. During the F.Y. 2010-11 the assessee had made a booking for purchase of residential premises to be constructed by India Bull Sky Forest in the project India Bull Sky Suites against Flat No.4707 admeasuring 3302 sq.ft. and amount of Rs.72,11,834/- was paid by the assessee by way of booking amount. Thereafter the assessee had also made payments on 21.10.2010 of Rs.4,23,18,166/- and on 22.11.2011 of rs.12,75,398/- totaling to Rs.5,08,05,398/-. Subsequently, vide letter dated 14.11.2013 the developer has informed the assessee that flat no. 4707 cannot be constructed due to various reasons, therefore, in lieu of that flat builder has undertaken to provide the assessee flat No. 3907 admeasuring 3341 sq. ft. and the assessee had paid an additional sum of Rs.8,46,232/- on 26.05.2014. Even after this the developer informed the assessee of its inability to construct and provide the alternative residential premises Unit No. 3907 admeasuring 3341 sq.ft. Under such circumstances the assessee had threatened the developer for specific performance to provide the residential premises or assessee will initiate criminal proc....
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....at to the buyers. The assessee when booked the flat the property was not in existence it was a property which was to be constructed in future time. Therefore, the property is at the most considered contingent property. 6.6 When the developer failed to construct the said property it has offered another flat in building which was also to be constructed and delivered to assessee on a future date. Therefore the second property also at the time of registration was a future property. The agreement entered between assessee and developer was an agreement for purchase of a flat (to be constructed in future) and the same cannot be treated as an agreement for sale of property. 6.7 Section 2(47) of the Income Tax Act provides that exchanges of asset has to be treated as transfer. However, whether the same route apply on a future contingent asset is the main question. In my opinion, in any contract of this type the price payable by the buyer is consideration and the flat which is offered by developer is the counter consideration. 6.8 In some such situation when the developer fails to deliver the counter consideration (the flat promised by him) the buyer has very limit....
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....perty is a future property and there will be uncertainty in the mind of buyer. Therefore, in my opinion, the valuation of existing property would be much more than the value of a future property. Therefore, normally, when a person books a flat the price is paid in installments over the period of construction. However, if someone pays entire price in advance he usually gets a very heavy discount. 6.13 The assessee booked the flat in 2010 which was shifted to another flat in 2014 and the possession of second flat was to be obtained in 2018. Therefore, if we give the benefit of indexation on the price paid in advance and also give benefit of discount for paying entire money in advance for second flat, there will be hardly any difference in the price paid by assessee and the registered value of the property. This can be understood with the example. If a person pays says Rs. 100 in first year the value of this 100 rupees after 4 years would be roughly 132 (assuming rate of interest @ 8 % per annum). On the other hand if an assessee pays Rs. 100 in first year of booking where as the property was to be received after 2 years he is likely to get discount of at le....