AI Drafter 
TaxTMI 
TaxTMI 
2022 (9) TMI 1464
X X X X Extracts X X X X
X X X X Extracts X X X X
....t)of Rs 30,28,500/- by holding that the letter of allotment is merely a letter of intent and not an agreement for sale of flat, without appreciating the fact pattern of the instant case. 3. Without prejudice to Ground No. 2, on the facts and circumstances of the case and law applicable thereto, the Ld. CIT(A) erred in upholding the allegation made by the AO that the case of the Appellant did not fall within the purview of the proviso to Section 56(2)(vii)(b)(ii) of the Act. Rs.9,58,704/- 4. On the facts and circumstances of the case and law applicable thereto, the Ld. CIT(A) erred in upholding the disallowance made by the AO of Rs 3,36,870/- on account of interest expenses incurred by the Appellant. 5. On the facts and circumstances of the case and law applicable thereto, the Ld. CIT(A) erred in upholding the action of the AO in levying interest under Section 234B and Section 234D of the Act, and recovering interest u/s 244A of the Act. Rs.3,00,806/- 6. On the facts and circumstances of the case and law applicable thereto, the Ld. CIT(A) erred in upholding the action of the AO in initiating penalty proceedings under Section 271(1)(c....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... not accepted by the A.O. who held that there is no agreement fixing the amount of consideration for transfer of immovable property in this case produced by the assessee. The letter dated 17/10/2011 issued by Sai Sadgure Developers is merely a letter of intent.Para2 mentions the intention of the assessee to acquire the said flat. Para 9 says that this writing is merely a letter of intent and is not and does not purport to be an agreement for sale /purchase which shall be executed upon final confirmation. Surprisingly, this letter of intent issued by Said Sadguru Developers to the assessee Shri Sajjnraj.M. Mehta is not even accepted and confirmed by the assessee. Here, only agreement available with regard to this transfer is dated 23rd July 2013. In the said agreement, purchase price of the property is fixed at Rs. 70,00,000/- vide para 10 thereof . Hence, first proviso to section 56(2)(vii)(b)(ii) would not apply. Accordingly, the difference between the stamp duty value and consideration (agreement value) i.e Rs. 30,28,500/- was added to the total income of the assessee as 'Income from other sources". 7. Aggrieved, the appellant has filed appeal. During the appellate proceed....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gard to transfer of the said flat which got registration on 23/07/2013. In this agreement, the purchase price of the property is fixed at Rs. 70,00,000/- vide para 10 thereof. Further, on perusal of the purchase agreement shows that the assessee started making payments to the Developers from 17.11.2011 and till 29.01.2013. Therefore, this allotment letter dated 17/10/2011 issued to the assessee cannot be treated as additional evidence. This is just a letter of intent. Further, vide para 9 of the said letter stated that "Upon final confirmation an agreement for sale shall be executed between us for purchase of the said flat by you". Thus, this writing is merely a letter of intent and is not and does not purport to be an agreement for sale/purchase of the said flat. The right and obligations shall become effective only on payment of entire consideration and execution of agreement of sale. c) Moreover, it is pertinent to mention here that the assessee has never furnished any details/documentary evidence which an show the stamp duty value or market value of the said property at the time of allotment of the said property i.e. 17/10/2011. In fact, the assessee had never raised t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 17-10- 2011 amounting to Rs 14 lacs vide cheque no 906740, Bank of Maharashtra to enter into an agreement cum acknowledgement of payment made and other terms and conditions about the property. This agreement between assessee and developer clearly confirms the amount of consideration along with other terms and conditions relating to levy of stamp duty, service tax and other charges to be paid by the assessee. 11. The finding of the A.O vide pg no-4, para-2.6 wherein he observed that assessee has deposited Rs 14 lacs with the developer to year mark the said premises for Rs 70 lacs. Even if for the time being it is assumed that this agreement is merely a letter of intent, still amount mentioned in this so called letter of intent can't be changed by either of the party .At the max the parties involved may opt for exit from the transaction but amount of consideration can't be changed. This transaction of the assessee has to be analysed in commercial parlance, without finalisation of consideration nobody will deposit 20% of the final consideration. The vitality of the agreement further found force from the behaviour of the assessee as confirmed by the A.O also that assessee paid furt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent should be applied for purpose of said section d) Ashutosh Jhavs. ITO Ward-2(5), Ranchi ITA No. 188/Ranchi/2019 dtd. 30/04/2021, [190 ITD 450 (Kolkata - Trib.).] Where assessee purchased a property and made part payment of sale consideration by cheque on very next day of execution of purchase agreement and registry was done after a year, since such part payment made by cheque on very next day of execution of agreement was towards fulfilment of terms of purchase contract itself and there was no mala fide or false claim on part of assessee, no addition could be made on account of difference between amount of sale consideration for property shown in purchase agreement and stamp duty value of said property on date of registry by invoking section 56(2)(vii)(b) e) Dy. CIT-5(3)(1) vs. Deepak Shashi Bhusan Roy ITA No. 3204 & 3316/M/2016 dtd. 30/07/2018(Mum.) (Trib.) In order to determine taxability of capital gain arising from sale of property, it is date of allotment of property which is relevant for purpose of computing holding period and not date of registration of conveyance deed f) Mohd. Ilyas Ansari v. ITO-23(2)(3),Mumbai [ITA No. 6174/....