2023 (5) TMI 1341 - AT - Income Tax

Income from other sources u/s 56(2)(vii)(b) - difference between the stamp duty value on the date of registration and the agreement value - HELD THAT - On perusal of the Booking Form, the Allotment Letter and the Agreement for Sale, we find that there is no change in the amount fixed for transfer of the immovable property which stood at INR 4,10,63,800/- in all the aforesaid documents. Thus, clearly there was agreement between the Appellant and the developer/seller fixing the consideration for transfer of immovable property. It is admitted position that part-payment was made by the Appellant by way of cheque - As already noted that the Appellant had already made aggregate payment made till 30.06.2012. Thus, the conditions specified in the second proviso to Section 56(2)(vii)(b) of the Act stand fulfilled and therefore, stamp duty as on the date of agreement would have to be compared with the agreement value as per First Proviso to Section 56(2)(vii)(b) of the Act. The Appellant has placed on record certificate showing stamp duty ready reckoner value as on the date of booking of flat and Since the stamp value as on 05.06.2012 was less than the agreement value addition made by the AO invoking the provisions of Section 56(2)(vii)(b) of the Act cannot be sustained . Accordingly, the addition made by the Assessing Officer vide Final Assessment Order is deleted - Decided in favour of assessee.

Summary

Issues Involved:
1. Determination of income u/s 147 read with Section 144C(13) of the Income Tax Act, 1961.
2. Adjustment of INR 55,87,000 as income from other sources u/s 56(2)(vii)(b).
3. Applicability of the first proviso to Section 56(2)(vii)(b) concerning stamp duty valuation.
4. Charging of interest u/s 234A, 234B, and 234C.
5. Initiation of penalty proceedings u/s 271(1)(c) and 27F.

Summary of Judgment:

1. Determination of Income u/s 147 read with Section 144C(13):
The appeal was against the Assessment Order dated 24.01.2023, passed u/s 147 read with Section 144C(13) of the Income Tax Act, 1961, following directions from the CIT (DRP-2), Mumbai-2, u/s 144C(5) for the Assessment Year 2016-17.

2. Adjustment of INR 55,87,000 as Income from Other Sources u/s 56(2)(vii)(b):
The Assessing Officer (AO) added INR 55,87,000 as income from other sources u/s 56(2)(vii)(b) based on the difference between the stamp duty value on the date of registration (INR 4,66,51,000) and the agreement value (INR 4,10,63,800). The appellant argued that the property was booked on 05.06.2012, and the stamp duty valuation should be considered as of that date, not the registration date in March 2016. The DRP directed the AO to verify the actual amounts paid and delete the addition if the claim was correct.

3. Applicability of the First Proviso to Section 56(2)(vii)(b):
The appellant contended that the proviso to Section 56(2)(vii)(b) should apply, as the booking amount was paid by cheque on 01.06.2012. The AO, however, argued that the entire booking amount was not paid, and thus the date of booking could not be treated as the date of the agreement. The Tribunal found that the appellant had substantially complied with the booking terms, and the developer acknowledged the payments. Therefore, the conditions of the proviso were met, and the stamp duty value as of the booking date should be considered.

4. Charging of Interest u/s 234A, 234B, and 234C:
These grounds were rendered infructuous as the primary addition was deleted.

5. Initiation of Penalty Proceedings u/s 271(1)(c) and 27F:
These grounds were also rendered infructuous.

Conclusion:
The Tribunal allowed the appeal, deleting the addition of INR 55,87,000 made by the AO, as the conditions specified in the proviso to Section 56(2)(vii)(b) were fulfilled. The appeal was pronounced on 30.05.2023.