AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (5) TMI 1665
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.... 2. erred in confirming the action of the AO in making the addition of Rs 2,88,85.600 in the hands of the Assessee instead of treating the same as exempt in the hands Ashwini Barabde the daughter of the Assessee." 3. Brief facts of the case are that, assessee filed his return of income on 15.08.2018 reporting total income at Rs. 61,34,820/-. Case of the assessee was selected for limited scrutiny for the reason of purchase value of property less than the value as per stamp authority. Ld. AO noted that assessee had purchase a property at flat no.1103, Akarava Majala Buildings, Rudraksh Block, Chembur, Mumbai 400071. According, to him consideration paid for this purchase of property is NIL and the stamp duty value is Rs. 2,88,85,600/-. Purchase of this property was registered on 21.09.2017. The Ld. AO issued show cause notice on the assessee to explain the said transaction, proposing to make the addition of Rs. 2,88,85,600/- being the stamp duty value for which no consideration was paid, by applying section 56(2)(x)(b)(B). Since, nothing came up from the assessee, he completed the assessment by making the addition of aforesaid amount u/s. 56(2)(x)(b)(B). Aggrieved, assessee went in....
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....nd the specifications in respect of the area of the aforesaid Flat and the floor thereof shall be ascertained and confirmed vides an Agreement for Permanent Alternate Accommodation to be executed by us in your favor after receipt of Commencement Certificate and other requisite approvals, permissions and sanctions in respect of the New Building." 5. Against this allotment letter, assessee received the residential flat no. 1103 in the new building developed by the developer with the stamp duty value of Rs. 2,88,85,600/- under the registered agreement for Permanent Alternate Accommodation dated 21.09.2017 which is against the surrender of tenancy rights. In this agreement, the first name of the tenants is noted that of the assessee and second name is that of the daughter of the assessee. Since, the first name appears that of the assessee as tenants, ld. AO took the assessee as the first holder/owner of the impugned property for the purpose of making addition in his hands. Against this, assessee strongly contented that since the tenancy right was surrendered by the daughter of the assessee, the ownership of new flat given by the developer in lieu of surrender of tenancy right always....
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....vely. Thus, she was a major during both the stated events. It was also submitted that even if the contention of the Ld. AO is accepted that agreement for PAA is made between Sandu Developers and the assessee and not the daughter, then also, the capital gain so computed will be exempted in the hands of the assessee, since he has invested the full value of consideration (that is, the stamp duty value) in the PAA residential flat no.1103. 5.4. After considering the submissions made by the assessee and the remand report along with rejoinder, Ld. CIT(A) observed that assessee is not able to substantiate his claim that his name in the agreement for the flat has been incorporated only for security purposes. According to him, assessee is trying to create story to avoid tax liability and has not proven that ownership of the new flat is covered for exemption u/s. 54F of the Act. He further noted that, such a claim has not been made either by the assessee or by the daughter of the assessee in their returns. He thus, sustained the addition made by the Ld. AO and dismissed the appeal of the assessee. Aggrieved, assessee is in appeal before the Tribunal. 6. Before us, Ld. Counsel for the a....
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....f, hand over peaceful possession of the said Existing Area to the Developers for demolition. B. In consideration of having consented to the redevelopment of the said Land and handing over vacant and peace-- Possession of the said Existing Area for redevelopment, and in lieu of the said Existing Area to which the Tenants entitled to by virtue of having been in occupation and possession, the Developers agree and undertake to provide/allot to the Tenants, without any further consideration, permanent alternate accommodation as is specifically mentioned herein below. C. The Developers had agreed to execute a written Agreement in respect of the Permanent Alternate Accommodation in favor of the Tenants being in fact these presents and also to register this presents under the Registration Act, 1908. D. The parties hereto are desirous of recording the terms and conditions agreed between the parties more particularly with reference to the entitlement of the tenants in the new building in the manner appearing hereinafter. 6.1 In para 2 of this agreement which relates to PAA, developer has agreed and undertaken to allot to the tenants without any additional consid....
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....the Act. It is only the capital gain which is subject to deduction u/s. 54F, is to be dealt with either in the hands of the assessee or in the hands of the daughter of the assessee but would have no bearing on the taxability in either hands. 7.1. Ld. AO has resorted to provisions of Section 56(2)(x)(b)(B) for the purpose of making addition in the hands of the assessee which is bad in law as it falls under the head "income from other sources". When income derived from different sources falling under a specific head has to be computed for the purpose of taxation in the manner provided by the appropriate section and no other. If the income from another source falls within a specific head, fact that it may indirectly be covered by another head will not make the income taxable under the later head. Section 56 provides for chargeability of income of every kind which is not chargeable to income-tax under any of the heads specified in section 14 items A,C,D and E. Therefore, if the income is included in any one of the heads i.e. under capital gain in the present case, it cannot be brought to tax under the residuary provisions of section 56 i.e. under the head income from other sources. ....