TaxTMI 
TaxTMI 
2026 (7) TMI 1324
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.... are that the assessee is an individual who filed his return of income for the Assessment Year 2018-19 on 25.08.2018 declaring a total income of Rs.12,47,170/-. During the course of assessment proceedings, the Assessing Officer observed that the assessee had entered into two registered agreements dated 12.12.2017, which were registered on 13.12.2017, with respect to premises Nos. C-1 and C-50 having stamp duty values of Rs.54,79,000/- and Rs.83,91,000/- respectively. The Assessing Officer observed that the total stamp duty value of the two premises was Rs.1,38,70,000/- and the Assessing Officer was of the view that the assessee had received these immovable properties without consideration during the relevant previous year. Accordingly, the ....
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....ment of tenancy rights. The CIT(Appeals) held that by executing and registering the redevelopment agreements, the assessee had acquired absolute ownership rights over the alternate premises which could not thereafter be altered without his consent. Therefore, the property was deemed to have been received during the relevant assessment year notwithstanding the fact that physical possession had not been handed over. The Ld. CIT(Appeals) also held that the Assessing Officer had rightly invoked section 56(2)(x) of the Act as the assessee had acquired valuable property without paying adequate monetary consideration and accordingly upheld the addition of Rs.1,38,70,000/-. 4. The assessee is in appeal before us against the order passed by CIT(A....
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....t clear that the charging provision is attracted only where an assessee "receives" an immovable property during the relevant previous year. Therefore, the existence of an actual receipt of immovable property is a fact which needs to be, ascertained before the deeming fiction contained in section 56(2)(x) of the Act can be invoked. 9. In the present case, there is no dispute that the assessee was occupying the existing premises as a tenant and, under the redevelopment scheme, agreed to surrender his tenancy rights in exchange for permanent alternate accommodation. Also, there is no dispute that the redevelopment project has not been completed till date. The learned counsel has placed on record the status of the project as reflected on the....
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....f the Act. 12. Our view is supported by the recent decision of the Coordinate Bench of the Mumbai Tribunal in Snehalata Heramb Dhayagude v. Jurisdictional AO, Ward 16(3)(1), ITA No.258/Mum/2026, order dated 21.04.2026, wherein, while interpreting section 56(2)(x) of the Act, the Tribunal held as under: "A plain reading of section 56(2)(x) makes it abundantly clear that the sine qua non for its applicability is the 'receipt' of immovable property during the relevant previous year." 13. The Tribunal further observed: "The agreement itself clearly stipulates that the surrender of tenancy rights would take effect only upon the assessee being placed in possession of the new premises. Thus, till such possession is handed o....
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....rein, after following the decision in Anil Dattaram Pitale (supra), it was held: "The assessee received a new residential flat in lieu of surrender of old flat. Therefore, the case of the assessee is squarely covered by the decision in Anil Dattaram Pitale... it was not a case of receipt of immovable property for inadequate consideration that would fall within the purview of section 56(2)(x). Hence, the Assessing Officer was directed to delete the entire addition." 16. The ratio laid down in the aforesaid decisions squarely applies to the facts before us. The expression "receives" occurring in section 56(2)(x) cannot be interpreted in an artificial or notional manner so as to tax an assessee merely because a redevelopment agreem....