TaxTMI 
TaxTMI 
2025 (2) TMI 1809
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.... Ld. AO and Ld.CIT(A) erred in considering the cost of the flat at Rs. 69,28,000/- instead of Rs. 91,48,462/- as actually incurred by the appellant and her wife. 4. For that the Ld. AO erred in considering the stamp duty on the date of registration of the property instead of the date on which the property was booked by the assessee and agreement for purchase was entered into. 5. For that the Ld. AO erred in making addition u/s.56(2)(vii) directly on the basis of value adopted by the registering authority without referring the matter to the DVO. 6. For that under the facts and circumstances of the case, the addition of Rs. 25,73,800/- u/s.56(2)(vii)(b)/56(2)(x) are liable to be deleted of the Act. 7. For that even otherwise, the addition made by the Ld.AO is arbitrary and excessive. 8. For that the appellant craves leave to add, alter or withdraw any ground(s) of appeal on or before hearing of the appeal." 3. The grievance of the assessee is two fold, firstly, that provisions of section 56(2)(vii) of the Act are not applicable on the transaction in question during the year and secondly, the addition of Rs. 25,73,800/- is uncalled for b....
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....re in ITA No.202/Mum/2023 dated 29.05.2023. 8. On the other hand, ld. Departmental Representative vehemently argued relying on the orders of the lower authorities. 9. I have heard the rival submissions made by the parties and perused the record placed before me. I will first take the legal issue raised by the assessee that section 56(2)(vii) of the Act is not applicable in the case of assessee and the impugned addition deserves to be deleted on this account itself. Section 56(2)(vii) of the Act which was inserted by the Finance Act, 2013 w.e.f. 01.04.2014 reads as under : "(vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009 but before the 1st day of April, 2017,- (a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum; (b) any immovable property,- (i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; (ii) for a consideration which is less than the stamp duty value of ....
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....ion 12AB; or (h) by way of transaction not regarded as transfer under clause (vicb) or clause (vid) or clause (vii) of section 47. Explanation.-For the purposes of this clause,- (a) "assessable" shall have the meaning assigned to it in the Explanation 2 to subsection (2) of section 50C; (b) "fair market value" of a property, other than an immovable property, means the value determined in accordance with the method as may be prescribed; (c) "jewellery" shall have the meaning assigned to it in the Explanation to subclause (ii) of clause (14) of section 2; (d) "property" means the following capital asset of the assessee, namely:- (i) immovable property being land or building or both; (ii) shares and securities; (iii) jewellery; (iv) archaeological collections; (v) drawings; (vi) paintings; (vii) sculptures; (viii) any work of art; or (ix) bullion; (e) "relative" means,- (i) in case of an individual- (A) spouse of the individual; (B) brother or sister of the individual; (C) brother or sister of the spouse of ....
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.... 8. So it remains an undisputed fact that Agreement for purchase of property in question was made during the F.Y. 2012-13 itself. Therefore, firstly section 56(2)(vii) of the Act will have no application since it has been brought into the statute from 01.04.2014 and secondly the stamp value if any to be considered is to be on the date of entering the Agreement, i.e. 19.06.2012 and thirdly the addition in the hands of assessee if any could have been made only after referring it to the District Valuation Officer. 13. My view that section 56(2)(vii) of the Act is not applicable on the facts of the instant case is further supported by the decision of Coordinate Bench of the Tribunal in the case of ITA No.202/Mum/2023, dated 29.05.2023 wherein on identical facts the Tribunal held as under : "6. We heard the rival submissions and perused the material on record. The sole crux of the disputed issue envisaged by the Ld.AR that, the CIT(A) has erred in sustaining addition to the extent of 50% of difference in stamp duty value of the flat as per SRO and purchase consideration as per agreement overlooking the various facts and the evidences. We find that the purchase agreement is d....
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....ances, submissions, ratio of the judicial decisions set-aside the order of the CIT(A) and direct the Assessing officer to delete the addition and allow the grounds of appeal in favour of the assessee. 8. In the result, the appeal filed by the assessee is allowed." 14. Before concluding, I also notice that ld. AO erred in treating cost of flat incurred by the assessee at Rs. 69,28,000/- because the assessee has furnished the details which clearly prove that the assessee has incurred the cost of Rs. 91,48,462/-. Therefore, the very basis adopted by the AO invoking provision of section 56(2)(vii) of the Act are on incorrect facts. Finding of ld.CIT(A) are set-aside. Effective Grounds of appeal raised by the assessee are allowed and impugned addition stands deleted. 15. In the result, the appeal of the assessee is allowed. Order pronounced on this 03rd day of February, 2025. ============= Document 1 Dilip Kumar Agrawal In the matter of : ACWP9714D P. A. No. : 2017-18 Assessment Year : : CIT(A), Kolkata - 10/10212/2019-20 Appeal No. ix. The assessee made the following payments :- (a) Bimla Devi Bothra Date Bank Amount Bank St....