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2024 (11) TMI 1062
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....he learned CIT(A) erred in comparing agreement value with the value on the date of registration of agreement on which stamp duty is paid as against total consideration paid for the said premises with the value on which stamp duty would have been payable on the date of letter of allotment. 3. The Ld. CIT(A) erred in not applying amended provisions of 1 and 2nd proviso to section 56(2)(x) stating that it is not applicable to the assessment year under consideration. 4. The learned CIT(A) erred in not considering the fact that the provisions of section 56(2)(x) applies only to "immovable property being land or building or both" and not the right to acquire immovable property. 5. The learned CIT(A) erred in not considering the fact that the difference between consideration as per letter of allotment and as per registered agreement is due to the passing of GST benefit to the appellant as per provisions of section 171 of the Central Goods and Services Act. 2017. 6. The learned CIT(A) erred in not considering the fact that the value adopted for determining stamp duty on the date of registration of agreement is rate for the building which are ready to occ....
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....are meter and the total stamp duty value as on the date of allotment was Rs. 5,67,18,369/-. Thus, the assessee contended that the cost of the immovable property as on the date of booking being 22/06/2016 would be Rs. 5,67,18,369/-, whereas, the agreement value was Rs. 5,30,87,707/-. It was thus submitted that the difference was within the 10% tolerance limit applicable as per the amendment to section 56(2)(X)(b)(ii) brought into the statute w.e.f. 1.04.2021. 2.4. It was submitted by the assessee that, the said property was ultimately purchased by his wife Smt. Padma Bhandary and assessee was only a joined owner. It was also submitted that if any addition is to be made u/s. 56(2) (vii) (b), should be made in the hands of his wife Mrs. Padma Bhandary and not the assessee. 2.5. The Ld.AO however considering the submissions of the assessee rejected the same by observing as under: i. "The assessee in his reply dated 26.03.2021 has claimed that stamp valuation of Rs. 5,30,87,707/- as on the date of booking i.e 20.06.2016 would be considered for the purpose of section 56(2)(vii)(b) of the Income Tax Act instead of taking the stamp duty valuation as per agreement of Rs. 6,01,17....
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....rovisions of section 56(2)(X)(b) of the act and the same is added to the returned income of the assessee." 2.6. The Ld.AO thus proposed disallowance of Rs. 26,98,035/- in the hands of the assessee vide order dated 07/07/2021 alongwith the draft assessment order, which was issued to the assessee. As there was no compliance on behalf of the assessee in respect of the same, addition as proposed in the draft assessment order was made by the Ld.AO. Aggrieved by the order of the Ld.AO, assessee preferred appeal before the Ld.CIT(A). 3. The Ld.CIT(A) after considering the submissions of the assessee observed and held as under:- "6.2 Ground no. 3: This ground of appeal pertains to the claim that AO erred in not considering the reply of show cause notice submitted by appellant on 2nd August, 2021, again on 4th August, 2021 due to technical issues on income tax portal 2.0. 6.2.1. It is noted that the AO had issued show-cause notice on 07/07/2021 compliance date of which was 02/08/2021 but the appellant filed the same on 04/08/2021. In submissions dated 26/12/2023, the appellant has himself admitted in para 5.4 therein that the acknowledgement, of such submissions date....
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....that, initially the letter of allotment was in the name of the assessee as first name. However, subsequently, vide letter dated 27/06/2016 placed at page 58 of the paper book, a request was made to change the first name to assessee's wife. The Ld.AR submitted that, the allotment letter by Oberoi Construction Limited was subsequently issued as per the request of assessee on 28/11/2016 placed at page 59 of the paper book, wherein the first name was of assessee's wife along with assessee with all other terms and conditions being unaltered. The Ld.AR submitted that, the Agreement of sale was entered into and registered on 28/09/2017 for Rs. 5,30,87,707/-, however, while paying stamp duty, market value of the property as on that date was determined to be at Rs. 6,01,17,500/-. The Ld.AR relied upon Index 2 issued by the Registrar of stamp Andheri placed at page 67 of the paper book. 5.4. The Ld.AR submitted that, whatever was shortfall in the total purchase cost agreed with builder, was recouped by the assessee. He submitted that the assessee cannot be treated as a Co-owner of the immovable property even to that extent, as entire TDS that was deducted towards the total purchase by ....
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....nding loan payable to her husband of the said amount. 5.7. The Ld.AR thus submitted that assessee cannot be treated as a co-owner of the said immovable property to the extent of the payment he has made on behalf of his wife to the builder amounting to Rs. 53,08,717/- (being the difference between agreement value and the stamp duty valuation as on the date of registration). 5.8. On the contrary the Ld.DR relied on the orders passed by the authorities below. He submitted that, the allotment letter issued clearly indicates that the property was to be jointly held by the assessee alongwith his spouse, and therefore the argument of the Ld.AR that it is solely in the name of his wife cannot be accepted. He submitted that, the sequence of names appearing will not be the decisive factor in so far as ownership in an immovable property is concerned. The Ld.DR also emphasized that, the agreement for sale also reflects the names of both assessee alongwith his wife and therefore the assessee cannot be treated separately. He submitted that in any circumstances to remove the name of assessee from the joint ownership of the immovable property, can be done only through a process of law, and t....
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....in the name of his legal heirs. We therefore do not find any merit in the argument of the Ld.AR. This issue regarding ownership of the assessee is kept open to be considered in an appropriate circumstances. 7. Ground No. 2(b), 3 & 4-6 are regarding applicability of provision of section 56(2)(X) of the Act. 7.1. The Ld.AR submitted that, the assessee entered into an agreement by way of letter of allotment on 22/06/2016 wherein the first booking amount was paid to the builder amounting to Rs. 56,69,238/-. Thereafter the assessee and his wife made payments on multiple dates, the details of which are as under: Date Event Rs. 22/06/2016 First booking amount paid by the appellant directly to 56,69,238 the builder/developer 56,69,238 23/06/2016 Allotment letter issued by the builder /developer, Oberoi Constructions Ltd, in the name of the appellant as first holder and his wife, Padma Bhandary as second holder 22/07/2016 Second installment of booking amount paid by the wife of the appellant directly to the builder/developer 56,69,238 22/08/2016 Third installment paid by the appellant directly to the builder/developer 1,13,38,476 ....
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....ation of income u/s. 56(2)(X)b of the Act. The Ld.AR also emphasized that as on the date of first payment the stamp duty valuation was Rs. 5,67,18,369/- as against the agreement value of Rs. 5,30,87,707/-. He submitted that by way of amendment w.e.f. 01.04.2021 the tolerance level was increased to 10% u/s. 56(2)(X)(b)(ii). It is submitted by the Ld.AR that, the authorities duly did not consider these documents including the allotment letter and receipt of the first booking amount. 7.4. He submitted that the said amendment was held to be applicable retrospectively by various decisions of coordinate bench of this Tribunal as under:- i. Maria Fernandes Cheryl vs. Income Tax Officer- Mumbai ITAT ii. Aaeshka Riddhi Realty, Mumbai vs. CIT(A)- NFAC - ITO - 19(1)- Mumbai ITAT iii. Chandra Prakash Jhunjhunwala vs. DCIT ITA- Kolkata ITAT 7.5. He also place reliance on following decisions in support of his arguments:- i. Sulochana Saijan Modi vs. ITO, Mumbi- Mumbai ITAT ii. Gurukrupa Developers D N Nagar vs. Pr. CIT- 32, Mumbai- Mumbai ITAT iii. Ms. Shilpa Gautam vs. The Income Tax Officer- Mumbai ITAT 7.6. On the contrary the Ld.....
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....e date of agreement, the amount of consideration is fixed for the transfer of immovable property and the date of registration is not the same, then the Stamp duty Value on the date of agreement is to be taken. The section further provides that the value as on date of agreement can be taken only when, the amount of consideration in the agreement was paid by account payee cheque or through electronic clearing system through a bank account on or before the date of registration of such immovable property. In the present facts of the case there is no dispute regarding the payments made by any of the mode other than through banking channels. Thus, the aforesaid proviso carves out exception by taking the stamp duty value as on the date of agreement when the payments have been made through banking channels. The Ld. AO has stated that allotment letter is not a registered agreement, therefore, the value of the property has to be taken as on the date of sale registration. First of all, when builder gives an allotment letter with terms and conditions and all the rights and the value of purchase is agreed upon which was accepted by the assessee and acted upon then it is clearly covered under af....