TaxTMI 
TaxTMI 
2026 (8) TMI 459
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.... is framed in breach of the statutory provisions of the Act and the scheme and as otherwise also is not in accordance with the law. b. Without prejudice to the generality of the above, the appellate order so passed is bad in law, illegal and void as the same is arbitrary and perverse. ii. VIOLATION OF PRINCIPLES OF NATURAL JUSTICE a. In the facts and the circumstances of the case, and in law, the appellate order so framed in bad in law and illegal, as the same is framed in breach of the principles of Natural Justice. b. Without prejudice to the generality of the above ground, in the facts and the circumstances of the case, the Ld. CIT (A) erred in not granting proper, sufficient, reasonable and fair opportunity of being heard to the Appellant while passing the appellate order. WITHOUT PREJUDICE TO THE ABOVE: iii. CHALLENGE TO REASSESSMENT a. The Ld. CIT (A) erred in confirming the action of the A.O. in initiating the reassessment proceeding and framing the assessment of the Appellant by invoking the provisions of section 147 r.w.s. 148A r.w.s. 148 of the Act. b. While doing so, the Ld. CIT (A) failed to appreci....
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....se are that the assessee, an individual, filed his return of income for the year under consideration on 27.07.2018 declaring a total income of Rs. 2,39,900/-. Subsequently, on the basis of information available on the Insight Portal, the Assessing Officer noticed that an immovable property had been purchased for a consideration of Rs. 57,00,000/-, whereas the stamp duty authority had adopted its value at Rs. 95,64,335/-. Entertaining a belief that income chargeable to tax had escaped assessment on account of the difference between the declared consideration and the stamp duty value, reassessment proceedings were initiated in accordance with the provisions of sections 147, 148A and 148 of the Act. 3.1 During the reassessment proceedings, the assessee explained that the property had originally been allotted on 06.12.2014 by the developer upon payment of substantial consideration through normal banking channels. According to the assessee, the consideration stood irrevocably fixed on the date of allotment itself and, therefore, in view of the first proviso to section 56(2)(x), the stamp duty value as prevailing on the date of the allotment was required to be adopted instead of the v....
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....f allotment dated 06/12/2014 cannot be considered as the date of execution of agreement by any stretch of imagination since immovable property is not conveyed by delivery of possession but by a duly registered deed. 4. The allotment letter and the sale agreement are two separate "documents and cannot be considered to mean one and the same. 5. Moreover, the said allotment letter has only been signed by the seller, not by the assessee. Therefore, the said allotment cannot be termed as sale agreement between the assessee and the said seller for fixing the value of consideration for transfer of property. 6. The assessee, in his afore-stated submission, has taken a plea for drop proceedings after taking a reference of judgment pronounced by the Hon'ble ITAT, Mumbai 'C' Bench in the case of Parth Dashrath Gandhi vs. Addl./Deputy/Asstt. Commissioner of Income Tax, NFAC, Delhi in ITA No. 1990/Mum/2022 for the A.Y.-2018-19. In this regard, it is averred that in the case of CIT vs. Balbir Singh Maini &Ors. in 398 ITR 531 [2017] (SC), the Hon'ble Apex Court held that there cannot be transfer of immovable property without registration of sale agreemen....
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.... section 56(2)(x) of the Act. The proviso to section 56(2)(x) provides that where the date of agreement fixing the consideration and the date of registration are different, the stamp duty value on the date of agreement may be considered, provided that part or whole of the consideration has been paid through banking channels on or before the date of such agreement. However, the applicability of the proviso presupposes the existence of a valid agreement fixing the consideration. In the present case, the appellant relies upon the allotment letter dated 06.12.2014 as the agreement. However, upon examination of the material on record, the following facts emerge: 1. The allotment letter is not a registered document. 2. The said document does not contain the essential contractual terms normally present in an agreement for sale, such as representations and warranties of parties, obligations prior to transfer, conditions precedent, remedies for breach, dispute resolution clauses, etc. 3. The allotment letter appears to be signed only by the builder and not by both parties, thereby lacking the essential attributes of a binding bilateral agreement. ....
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.... Registration Act. It is also a settled principle that each case must be decided on its own facts, and therefore the judicial precedents cited by the appellant do not automatically apply to the facts of the present case. 6.4 Rebuttal of Appellant's Argument Regarding Assessment in the Case of the Mother:-The appellant has further contended that in the case of the co-owner, namely his mother Mrs. Pravina Bharat Sheth, the assessment for the same issue was completed without making any addition, and therefore similar treatment should be accorded in the present case. This contention cannot be accepted for the following reasons: 1. Each assessment proceeding is independent and separate. It is a settled legal position that the principle of res judicata does not strictly apply to income-tax proceedings. Therefore, a view taken in the case of another assessee, even if related, does not automatically bind the authorities in the present case. 2. Reliance In this regard can be placed on the decision of the Hon'ble Bombay High Court in CIT v. J.K. Charitable Trust, wherein it was held that each assessment year and each assessee constitutes a....
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....ers to "the date of the agreement fixing the amount of consideration" and nowhere stipulates that such agreement must necessarily be registered. It was argued that once the consideration stood irrevocably determined under the allotment letter and a substantial part thereof had been paid through banking channels on or before the date of such allotment, the statutory conditions prescribed under the proviso stood fully satisfied. Consequently, the stamp duty value prevailing on the date of allotment alone could be adopted for the purposes of section 56(2)(x). Inviting our attention to the paper book, the ld. AR submitted that the allotment letter dated 06.12.2014 unequivocally identified the property, specified the agreed consideration and was accompanied by payment through normal banking channels. It was contended that the allotment created enforceable contractual rights between the parties and the subsequent registered agreement merely formalised the transaction that had already crystallised several years earlier. Therefore, according to him, the authorities below erred in disregarding the allotment merely because it was not a registered instrument. The ld. AR further contended that....
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....be equated with an agreement contemplated by the statute. The ld. DR submitted that the authorities below have rightly relied upon the ratio laid down by the Hon'ble Supreme Court in Balbir Singh Maini (supra) and Suraj Lamp (supra), which emphasise that rights in immovable property acquire legal recognition only through a duly registered instrument. According to him, once the registered agreement was executed in June, 2017, the stamp duty valuation prevailing on that date alone could legitimately be considered for the purposes of section 56(2)(x). He, therefore, submitted that the addition had rightly been sustained. 5. We have carefully considered the rival submissions, perused the orders of the authorities below and examined the material placed before us. We have also considered the statutory provisions as well as the judicial precedents cited at the Bar.The controversy, in our considered opinion, lies within a narrow compass. The principal issue requiring adjudication is whether the allotment letter dated 06.12.2014, whereby the purchase consideration stood determined and payments were admittedly made through banking channels, constitutes an "agreement fixing the amount ....
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....e of the proviso. In our respectful view, such approach conflates two distinct legal concepts. While the Transfer of Property Act, 1882 and the Registration Act, 1908 regulate the transfer of legal title in immovable property, the first proviso to section 56(2)(x) merely identifies the point of time at which the consideration stood agreed between the parties. The statutory enquiry under the proviso is, therefore, materially different from the question as to when legal ownership or title passes. 5.5 In this context, the reliance placed by the Revenue authorities upon the judgment of the Hon'ble Supreme Court in CIT v. Balbir Singh Maini (2017) 398 ITR 531 (SC) is, in our considered opinion, misplaced. The issue before the Hon'ble Supreme Court in that case related to the scope of "transfer" under section 2(47)(v) read with section 53A of the Transfer of Property Act after the amendment to the Registration Act. The Court held that, in the absence of a registered agreement, the provisions of section 53A could not be invoked and consequently there was no transfer for the purposes of capital gains taxation. The controversy before us is entirely different. We are not concerned....
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....cessary for claiming the benefit thereof. 5.10 During the course of hearing, the learned Authorised Representative drew our attention to the Ready Reckoner rates prevailing as on 06.12.2014 and contended that the stamp duty valuation on the date of allotment was lower than the agreed consideration. It was also submitted that substantial payments had already been made through banking channels prior to or on the date of allotment. 5.11. However, upon careful examination of the paper book, we notice certain factual inconsistencies which require verification before the benefit of the proviso can be extended. Firstly, the receipt bearing No. 6714 dated 06.12.2014 appears to refer to payments relatable to Flat Nos.1701 and 1702. The receipt, on its face, does not clearly indicate the precise allocation of the payments between the two flats. Secondly, certain documents placed in the paper book indicate that Flat No.1702 stands in the names of Mrs. Pravina Bharat Sheth and Shri Bharat K. Sheth, whereas the present appeal concerns Flat No.1701 purchased by the assessee. Thirdly, some of the annexures forming part of the registered agreement contain references to Chawl Nos. 8, 9 and 10....