TaxTMI 
TaxTMI 
2023 (5) TMI 1099
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....decision relates to Income from Capital Gain and the case of the appellant falls under Income from Other Sources. * In the said decision, the mentioned argument is at best an obiter dicta and not a ratio decidendi, therefore, not enforceable. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the addition of Rs.28,92,650 w/s 56(2)(x) completely disregarding the following facts: * The appellant is a joint owner and the contention of the appellant's co-owner in regards to the same addition has been accepted and no addition has been made by the Assessing Officer. * The Appellant has submitted the allotment letter and the copy of the cheque during the course of assessment proceedings which reflects that the payment was made before the agreement date. Thus, satisfying both the conditions under the proviso to section 56(2)(x)(b) of the Act. The provision does not prescribe quantum of payment to be made." 3. Briefly stated facts are that the assessee, an individual, filed its return of income on 13.06.2018 declaring total income of Rs.3,54,980/-. The case was selected for limited scrutiny for exami....
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....he property. In fact, the property is jointly purchased by the assessee with her son. It doesn't matter that who has contributed how much. 2. The assessee failed to furnish the copy of notarized agreement with M/s. JP Infra and merely furnished the copy of allotment letter dated 22.11.2010 vide her submission dated 31.12.2020 and after being asked for notarized copy of agreement, furnished the same letter simply getting attested from a Notary on 16.02.2021. 3. Another condition of second proviso to the section 56(2)(x)(b) that payment of sale consideration or part thereof on or before the date of agreement is also not satisfied as the first payment has been made only on 23.11.2020 this doesn't mean that the assessing officer is accepting the allotment letter as an agreement among the buyers and seller of the property. 4. The assessee was specifically requested to furnish the copies of receipts of payments made to M/s. JP Infra during the FY 2010-11 and thereafter but she failed to provide the same, 5. Further, on perusal of the bank passbook of the assessee it is noticed that the following payment were made to M/s. JP Infra during the year 2015 by....
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.... Ld. Counsel for the assessee accordingly, submitted that the assessee fulfills the requirement of provision to section 56(2)(x)(b) of the Act as part of the consideration has already been paid by account payee cheuqe at the time of entering to purchase agreement. Further, Ld. Counsel for the assessee submitted that the decision of Hon'ble Supreme Court in the case of CIT vsBalbir Singh Maini & Ors. 398 ITR 531 [2017] (SC) is not applicable over the facts of the instant case, as in the said case, Hon'ble Apex Court held that "there cannot be transfer of immovable property without registration of sale agreement whereas in the instant case, the letter of allotment/agreement is the document which shows intention of the party to transfer at a future date which has been duly acted upon by way of Sale Deed which is registered." 9. On the contrary, Ld.Sr. DR relied upon the order of the lower authorities. 10. We have heard the rival contentions on the issue in dispute and perused the material available on record. In the case, the assessee is claiming, stamp duty valuation of the flat as on the date of the agreement as deemed sale consideration for the purpose of section 56(2)(x)(b) ....
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....y per cent" had been substituted]." 11. Thus, the section prescribe that when the property has been purchased for inadequate consideration, as compared to the stamp duty value, same is liable to be addition for income under the head "income from other sources". However, under the proviso if prior to registration of the property , the assessee has entered into purchase agreement fixing the amount of consideration and also partly paid the amount of consideration by way of account payee cheque/draft etc, then for the purpose of section 56(2)(x) of the Act, the stamp duty value as on the date of the agreement may be taken for the purpose of the working out deemed sale consideration. In the instant case, the son of the assessee, Shri Ashish Modi has been allotted the concerned flat on 22.11.2010 and the assessee has become co-owner of the said property. The assessee has filed copy of the registered Deed which indicates that a cheque of Rs.2,00,000/- was paid in respect of the allotment of the property on 11.11.2010. The assessee has also filed a copy of bank statement of Shri Ashish Modi from which it is seen that the said payment of Rs.2,00,000/- has been withdrawn from his bank acc....
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....rescribed in sec.56(2)(x) of the Act. The Ld A.R further submitted that the Tribunal did not consider the effect of second proviso to sec.56(2)(x) of the Act in the above said case. We agree with the submissions of Ld A.R with regard to the distinguishing features pointed out in the decision rendered by the co-ordinate bench in the case of Sujauddian Kasimsab (supra). Hence, we are of the view that the above said decision could not lend support to the case of the revenue. 9. On the contrary, we are of the view that the decision rendered by another co-ordinate bench in the case of Mr Sajjanraj Mehta (supra) is applicable to the facts of the present case. The decision rendered in the case of Mr Sajjanraj Mehta by the co-ordinate bench is extracted below, for the sake of convenience:- "10. We have gone through the order of the A.O, Ld. CIT(A) and various submissions of assessee dated 06-10-2021. Vide pg no-23 to 27 of paperbook we have observed the payment made by the assessee to the developer on 17-102011 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 ab....
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.... Ward-1(3)(1)ITA No. 1886/M/2019 dtd. 28/10/2020, (Mum.) (Trib.): Date of registration irrelevant for Sec 56(2)(vii)(b) as substantial obligation ndischarged on date of agreement. b) Radha Kishan Kungwani vs. ITO Ward - 1(2) ITA No. 1106/JP/2018dtd. 19/08/2020, [185 ITD 433 (Jaipur - Trib.)] Where assessee entered into agreement for purchase of flat and had made certain payment at time of booking of flat, stamp duty valuation or fair market value of immovable property was to be considered as on date of payment made by assessee towards booking of flat c) Sanjay Dattatraya Dapodikar v/s ITO Ward - 6(2), Pune ITA No.1747/PN/2018 dtd. 30/04/2019(Pune) (Trib) Where date of agreement for fixing amount of consideration for purchase of a plot of land and date of registration of sale deed were different but assessee, prior to date of agreement, had paid a part of consideration by cheque, provisos to section 56(2)(vii)(b) being fulfilled, stamp value as on date of agreement 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 p....
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....he purposes of sec.56(2)(x) of the Act. Since the assessee has paid the parts of consideration as per the terms and conditions of allotment through banking channels prior to the execution of Sale agreement, we are of the view that the provisos to sec.56(2)(x) shall apply to the facts of the present case. Accordingly, the stamp duty valuation as on the date of respective Allotment letters should be considered for the purposes of sec.56(2)(x) of the Act. Hence the AO was not justified in considering the stamp duty valuation as on the date of execution of agreement to sell. 11. On a perusal of record, we notice that the details of stamp duty value as on the date of respective allotment letters was not brought on record. Since we have held that the stamp duty valuation as on the date of respective allotment letters should be considered for the purpose of sec.56(2)(x) of the Act, it is imperative on the part of the assessee to show that the actual consideration was equal or less than the stamp duty valuation as on the date of issue of respective allotment letters. Accordingly, we are restoring this issue to the file of AO for the limited purpose of comparing the actual sale con....