TaxTMI 
TaxTMI 
2026 (3) TMI 629
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....ory notices under section 143(2) and section 142(1) of the Act were issued and served on the assessee. On the basis of the Statement of Financial Transaction details available with the Department, it was observed that the assessee purchased two flats, namely Flat Nos. 5002 and 5003, Orchid Enclave, Wing-A, Mumbai Central, Mumbai, for a sale consideration of Rs. 2,04,50,000/- per flat. It was further observed that the Sub-Registrar assessed the value of the property on the date of registration of the sale deed for the purpose of stamp duty and registration at Rs. 2,27,01,500/- per flat. As there was a difference of Rs. 22,51,500/- between the sale consideration and the value determined by the Stamp Valuation Authority in respect of each property, the assessee was asked to show cause as to why the total difference amounting to Rs. 45,03,000/- between the sale consideration of the two flats and the stamp duty value, be not considered for addition as per the provisions of section 56(2)(x) of the Act. In response, the assessee submitted that both the flats were booked in the year 2007, and the price of the flats was also agreed between the parties in the year 2007. Thereafter, instalmen....
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.... duty value on the date of agreement may be taken for the purposes of this sub-clause : Provided further that the provisions of the first proviso shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by way of an account payee cheque or an account payee bank draft or by use of electronic clearing system through a bank account, on or before the date of agreement for transfer of such immovable property: Provided also that where the stamp duty value of immovable property is disputed by the assessee on grounds mentioned in sub-section (2) of section 50C, the Assessing Officer may refer the valuation of such property to a Valuation Officer, and the provisions of section 50C and sub-section (15) of section 155 shall, as far as may be, apply in relation to the stamp duty value of such property for the purpose of this sub-clause as they apply for valuation of capital asset under those sections;" 8. Therefore, as per the provisions of section 56(2)(x)(b) of the Act, where any person receives any immovable property from any person or persons on or after 01.04.2017 either without consideration or for considerati....
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....o an agreement for the sale of these flats to the assessee. From the perusal of these agreements for sale, forming part of the paper book from pages 6-85, we find that the agreements duly record the payment made by the assessee from 04.04.2007 till 21.12.2016 in respect of each of these flats. It is evident from the perusal of these agreements that there was no change either in terms of the allotted flats or in the carpet area of these flats, which was initially agreed between the parties in respect of which the allotment letters were issued on 08.05.2010. 12. In the present case, from the perusal of the record, it is thus evident that the terms as agreed vide allotment letter dated 08.05.2010 were complied with by both parties and payment as per the schedule was also made to the builder. Thus, the allotment letter was not only duly accepted by the parties, but other conditions were also complied with. We find that the Coordinate Bench of the Tribunal in Salochana Saijan Modi vs ITO, reported in [2023] 152 taxmann.com 56 (Mumbai -Trib.), held that the allotment letter can be considered as an agreement to sell. The relevant findings of the Coordinate Bench, in the aforementioned ....
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....ot 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 6-10-2021. 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 about the property. This agreement between assessee and developer clearly confirms the amoun....
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.... Date of registration irrelevant for Sec 56(2)(vii)(b) as substantial obligation discharged 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 purchased a property and made part payment of sa....
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....e 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 consideration with the stamp duty va....
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.... consideration for the purpose of section 56(2)(x)(b) of the Act. On the other hand, as per the Revenue, the value of the property assessed by the Sub-Registrar on the date of registration of the sale deed, i.e. on 20.03.2018, for the purpose of stamp duty and registration, should be considered for the purpose of section 56(2)(x) of the Act. 14. We find that, while deciding a similar issue, the Coordinate Bench of the Tribunal in Radha Kishan Kungwani v. ITO, reported in (2020) 120 taxmann.com 216 (Jaipur - Trib.), observed as follows: - "Thus, as per clause (b) of sub-section (2)(vii), if the assessee has received immovable property for a consideration which is less than the stamp duty value, the value of such property as exceeds such consideration shall be chargeable to income tax under the head income from other sources. However, the first and second proviso carve out the exception for taking stamp duty value on the date of agreement prior to the date of registration if an amount of consideration or part thereof has been paid by any mode other than the cash before the date of agreement for transfer of such immovable property. Therefore, if there is an agreement betwe....