AI Drafter 
TaxTMI 
TaxTMI 
2026 (5) TMI 1452
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..... Without prejudice to the generality to the above, in the facts and the circumstances of the case, and in law, the order is bad in law as: i. The same is passed without granting proper, sufficient and adequate opportunity of being heard to the Appellant and ii. The order is passed without application of mind to the facts and the submissions brought on record. 3. The Hon'ble CIT (DRP-3) erred in confirming the action of the AO in making the addition of Rs. 1,16,142/- in respect of the difference between the market value (as per Index-2) and the agreement value of the property purchased, under the provisions of Section 56(2)(vii)(b) of the Income Tax Act, 1961 (the Act). 4. The Hon'ble CIT (DRP-3) erred in confirming the action of the AO in making the addition of Rs. 2,42,982/- by incorrectly applying indexation to the installments paid towards the property, rather than allowing indexation on the total cost of acquisition from the year of allotment and registration of the agreement. 5. The Hon'ble CIT (DRP-3) erred in confirming the action of the AO in making the addition of Rs. 4,99,944/- under Section 69 of the Income Tax Act, 1961, on ....
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..... In this connection, reliance could be placed on the landmark decision of Hon'ble Supreme Court which inter alia held in Collector, Land Acquisition v Mst. Katiji And Others- 167 ITR 471 (SC) that "ordinarily, a litigant does not stand to benefit by lodging an appeal late........Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated....Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.... A litigant does not stand to benefit by resorting to delay. In fact, he runs serious risk." We therefore condone the delay and proceed to adjudicate the grounds on merits. 5. Brief facts of the case are that the assessee is a Non-resident individual who purchased a flat for Rs. 22,00,000/- from "Bhoomi Evora Builders" during F.Y. 2001-02 vide agreement dated 21.03.2002.In this case, a draft order u/s. 144C(1) of the Act was passed ....
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....IT (ITA No.2351/KOL/2017 dated 9.8.2019). However, the DRP observed that the case under consideration was for AY 2015-16. The tolerance band of 5% was introduced w.e.f 2019-20 and the tolerance band of 10% was introduced only from AY 2021-22. Therefore, as per the prevailing position of the law in AY 2015-16, the benefit of the tolerance band of 5% also could not be given to the assessee. The addition of Rs. 1,16,142/- proposed by the AO u/s 56(2)(vii)(b) of the Act was thus upheld. 7. Before us, the ld.AR has reiterated the same contentions as made before the lower authorities that he purchased a flat from one Mrs. Palvinder Kaur Kaler vide agreement dated 12.05.2014 for Rs. 50,78,858/-. The stamp duty value of the flat was Rs. 51,95,000/-. Evidently, the difference between the agreement value and stamp duty value was only 2.3% of the consideration. The Ld. DRP as well as the AO failed to appreciate that the amendment in section 56 by Finance Act, 2017 which provided a tolerance band of 5%, which was later increased to 10% by Finance Act. 2020, is not just benevolent but also curative in nature. The same has been consistently held by courts to be retrospective in its nature. Th....
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....o delete the addition made u/s. 56(2)(vii) of the Act, thus allowing the grounds in this regard. 9. In so far as the ground pertaining to the issue of indexation of cost is concerned, on perusal of assessee's submission, it was observed by the AO that he had claimed index cost of acquisition for F.Y. 2001-02 in its computation of income to the tune of Rs. 22,00,000/-. However, it was seen from the details provided by the assessee that the property was under construction on the date of agreement. In this regard, it was submitted by the assessee that purchase of flat in 2002 was 22 years old and it could not produce the bank statement. The AO further stated that as per the agreement for sale of property dated 21.03.2002, amount of Rs. 51,000/- was mentioned as received before execution of agreement and balance amount of Rs. 21,49,000/- was to be received in instalment as per work plan mentioned in agreement. It was submitted that as per agreement, it was 24 years old and considering that the purchase registered agreement itself was a good proof towards the purchase of flat. The assessee had submitted proof of loan taken in 2002. As per said certificate, loan was sanctioned on 11.1....
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....clear that it refers only to cost of acquisition and not actual payments made by the assessee, hence, there is no merit in the alternate contention of the revenue that the benefit of indexation should be given on the basis of dates of actual payments made by the assessee. Reliance was also placed on Lata G. Rohra vs. DCIT, 21 SOT 541(Mum), Divine Holdings Pvt. Ltd., ITA No.6423/Mum/2008,M/s. Pooja Exports, ITA No.2222/Mum/2010 and Mr. Ramprakash Bubna, ITA No. 6578/Mum/2010. The DRP however, rejected the objection with the observations that the assessee had himself admitted in his submissions that the bank loan of Rs. 18,00,000/- for purchase of the property was disbursed only in FY 2002-03. The AO has also worked out the indexed cost of acquisition keeping this fact into account. Thus, the action of the AO in proposing an addition of Rs. 2,42,982/- was upheld. 11. The ld. DR on the other hand, strongly relied on the order of the authorities below. He submitted that there was no asset held by the assessee on the date of agreement which is only on performance of certain conditions. No title, either tangible or intangible, had passed on to the assessee. 12. We have carefully co....
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....ight in the said property more than three years before its transfer made on 1st November, 1983. The capital gains derived by the assessee has, therefore, rightly been treated by the CIT(A) as a long-term capital gain." 12.1 Similarly, the Lucknow Bench of the Tribunal in the case of Sharad Thandani (supra) has held that legal possession in the form of agreement of allotment of flat and not actual physical possession is relevant for deciding whether capital gain is long-term or short-term. 12.2 Similarly, we find the Hon'ble Bombay High Court in the case of Vimal Lalchand Mutha (supra) has held as under : "Held that the assessee had entered into an agreement for the purchase of a flat in November, 1977, and had executed a formal agreement in December, 1978. She transferred her right, title and interest in the flat by an agreement to C in April, 1983. The Tribunal was, therefore, right in holding that the rights under the said two agreements of November, 1977/December, 1978, had been held for more than 36 months and that the gains arising from the transfer of her rights under the agreement in April, 1983, constituted long-term capital gains. No question....
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.... the tune of Rs. 45,78,914/- only while the balance the payment of Rs. 15,50,000/- was claimed to have been only made by his father-in-law. The AO observed that the assessee did not furnish relevant details of investment to the extent of Rs. 4,99,944/- which was treated as Unexplained investment u/s 69 of the Act. 14. Before the DRP, the assessee claimed that he had submitted bank statements as documentary evidence for the source of such investment. However, due to bank statements older than 10 years and banks refused to share the documents as it was more than 10 years, shortage of time and time barring issue, the assessee was not able to submit bank statement for the source of investment to a tune of Rs. 4,99,944/-. The assessee was able to locate the bank statement showing the amount received from his father-in-law as loan and paid to the buyer for purchase of flat. The bank statement was attached with a request to delete the addition. The assessee prayed to the appellate authority to admit such additional evidences now been filed which could not be filed during the course of assessment. 15. During the course of the DRP proceedings, the assessee furnished the copy of the ba....