TaxTMI 
TaxTMI 
2025 (2) TMI 39
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee has purchased property at PurbaJadabpur, Corporation Kolkata, Municipal Corporation, Road barakhola, Premises 401, Ward No. 109, Flat No..2C 1107, Floor, No.11, in respect of which the verification unit reported that assessee has purchased this property. The ld. AO noted that as per the said report the market value of the said property was Rs. 63,78,336/-, whereas the purchase price was Rs. 19 lacs. The ld. AO further noted as per the information available in departmental portal, circle rate value of the property was 59,24,736/-. The lower authorities thereafter observed that assessee has not admitted that she has purchased the said property and did not disclose the correct facts and therefore, the source of the investment of Rs. 19 lacs in the property remained unexplained. Accordingly, the addition made u/s 69 of the Act to the income of the assessee. 05. In the appellate proceedings, the ld. CIT (A) dismissed the appeal by observing that the assessee is required to explain the source of investment in the immovable property which he has failed to explain and therefore, the ld. AO has rightly confirmed the addition. 06. After hearing the rival contentions and perusin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rchase consideration and the value as per stamp valuation authority then the difference is liable to be added u/s 56(2)(x)(b) of the Act and thus, the ld. AO has rightly made the addition. 010. After hearing the rival contentions and perusing the materials available on record, we find that there is a difference between the purchase price of the flat and the value as per Stamp Valuation Authority. However, as a matter of fact the property was purchased in the earlier year as observed by us hereinabove in view of the payments being made in entirety in the earlier financial year and the details of payments have already extracted hereinabove. We note that the first payment of the flat was made on 12th June, 2012 and all the payments were completed till the F.Y. 2018-19. So far as the observation of the ld. AO is concerned that the difference between the purchase consideration and the value as per stamp valuation authority is to be taxed at 56(2)(x) of the Act, we note that the provisions of clause (x) of sub section (2)of sub section 56 were inserted by Finance Act 2017, with effect from 01.04.2017 and was not applicable because this flat was brought prior to that. Moreover, as per ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dering the market value on the date of sale and the agreement vale by applying the provisions of section 56(2)(x)(b) of the Act. Before proceeding further we will look at the provisions of the said section as extracted below - (2) In particular, and without prejudice to the generality of the provisions of subsection (1), the following incomes, shall be chargeable to income-tax under the head "Income from other sources", namely :- **** (x) where any person receives, in any previous year, from any person or persons on or after the 1st day of April, 2017,- (a) *** (b) any immovable property,- (A) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; (B) for a consideration, the stamp duty value of such property as exceeds such consideration, if the amount of such excess is more than the higher of the following amounts, namely:- (i) the amount of fifty thousand rupees; and (ii) the amount equal to ten per cent of the consideration: Provided that where the date of agreement fixing the amount of consideration for the transfer of im....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessee's case. However the dispute is whether the exception under the first proviso is applicable since the same mentions the date of agreement to be considered and that in assessee's case whether the letter of allotment is the agreement to sell in order to consider the stamp duty value on that date and not the date of sale. In this regard we notice that the coordinate bench in the case of Parth Dashrath Gandhi vs ACIT (ITA No.1990/Mum/2022 dated 31.01.2023) has considered a similar issue where it is held that - 6. We heard the parties and perused the record. We notice that the AO has considered the stamp duty value as on the date of registration of the agreement to sell for the purpose of determining the applicability of sec.56(2)(x) of the Act. However, the facts that the assessee had been allotted both the properties by way of allotment letters and further, the assessee has also paid instalments as per that letter are not disputed. Hence, the question that arises is whether the allotment letter can be considered as "agreement to sale" within the meaning of the provisos to sec. 56(2)(x) of the Act, which states that the stamp duty valuation as on the sale of sa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t 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 further Rs 34.5 lacs till financial year 2012-13. Assessee also paid Rs 1,00,285/- as VAT, Rs 1,35,187/- as service tax, Rs 5,02,000/- as stamp duty and Rs 30,000/- as registration charges. 12. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rty 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/M/2017dtd. 06/11/2020, 186 ITD 407 (Mumbai - Trib.)] Where Assessing Officer mechanically applied provisions of section 56(2) to difference between stamp duty value and actual sale consideration paid by assessee and made add....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tamp duty valuation as on the date of respective allotment letters. In the limited set aside, the AO shall take appropriate decision in accordance with law after affording adequate opportunity of being heard. 9. In assessee's case the advance payment is made through account payee check and the allotment letter with the terms of balance payment and other conditions of delivery of flat etc is issued. Therefore in our considered view, the above decision of the Hon'ble Tribunal is applicable to assessee's case also. Accordingly respectfully following the above case, we hold that the addition made by the AO is not sustainable and be deleted. 10. In the result, the appeal of the assessee is allowed." 011. Considering the facts of the case in the light of decision of the coordinate Bench, we are inclined to set aside the order of ld. CIT (A) and direct the ld. AO to delete the addition. 012. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 29.01.2025. ============= Document 1 MEMO OF CONSIDERATION A-Flat Received consideration money of Rs. 1,500,000.00/- (Rupees Fifteen Lakh Only) after allowing a re....