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2023 (5) TMI 1099 - AT - Income TaxAddition u/s 56(2)(x) - deemed sale consideration - stamp duty valuation of property being higher than the transaction value - assessee is claiming, stamp duty valuation of the flat as on the date of the agreement as deemed sale consideration for the purpose of section 56(2)(x)(b) invoking the first & second proviso to the said section - HELD THAT - In the instant case, the son of the assessee has been allotted the concerned flat on 22.11.2010 and the assessee has become co-owner of the said property. The assessee has filed copy of the registered Deed which indicates that a cheque was paid in respect of the allotment of the property on 11.11.2010. The assessee has also filed a copy of bank statement of Shri Ashish Modi from which it is seen that the said payment has been withdrawn from his bank account on 23.11.2010. As far as the condition of part payment is considered, it is not in dispute. CIT(A) and the AO has disputed the allotment letter. According to the AO and CIT(A), the allotment letter is not in the nature of the agreement for sale. However, we find that the Tribunal in the case of Parth Dasrath Gandhi vs Addl./Deputy/Asst. CIT 2023 (1) TMI 1253 - ITAT MUMBAI held that the allotment letter should be considered as agreement for sale. The assessee fulfills the requirement of proviso 1 & 2 of section 56(2)(x)(b) of the Act and therefore, we feel appropriate to restore this issue to the file of the AO for limited purpose of comparing the stamp duty valuation as on the date of the allotment with the transaction value recorded in the registration document. Accordingly, the AO shall give effect to this decision after affording adequate opportunity of being heard to the assessee in terms indicated above. The Grounds raised by the assessee are accordingly, allowed.
Issues Involved:
1. Addition of Rs. 28,92,650/- under Section 56(2)(x) 2. Reliance on the Apex Court judgment in the case of Balbir Singh Maina 3. Consideration of the appellant as a joint owner and the acceptance of the co-owner's contention Summary of Judgment: 1. Addition of Rs. 28,92,650/- under Section 56(2)(x): The assessee challenged the addition made by the Assessing Officer (AO) and upheld by the CIT(A) under Section 56(2)(x) of the Income Tax Act, 1961. The AO added the difference between the stamp duty valuation and the transaction value of the property, amounting to Rs. 57,85,300/-. The assessee argued that the addition was incorrect as the payment was made before the agreement date, satisfying the conditions under the proviso to Section 56(2)(x)(b). The Tribunal found that the assessee had indeed paid Rs. 2,00,000/- via cheque before the agreement date, fulfilling the requirement of the proviso. The Tribunal relied on the decision in the case of Parth Dasrath Gandhi, which considered the allotment letter as an agreement for sale. 2. Reliance on the Apex Court judgment in the case of Balbir Singh Maina: The CIT(A) relied on the Supreme Court judgment in CIT vs. Balbir Singh Maini, which dealt with the transfer of immovable property without registration of the sale agreement. The Tribunal found that the facts of the Balbir Singh Maini case were not applicable to the current case. The Supreme Court's decision focused on the interpretation of "transfer" under Section 2(47) of the Act, which was not relevant to the issue at hand. 3. Consideration of the appellant as a joint owner and the acceptance of the co-owner's contention: The assessee was a joint owner of the property along with her son, who had booked an under-construction residential house. The AO and CIT(A) disputed the allotment letter, considering it not an agreement for sale. However, the Tribunal found that the allotment letter should be considered as an agreement for sale, as substantial consideration was paid by cheque before the agreement date. The Tribunal restored the issue to the AO for the limited purpose of comparing the stamp duty valuation as on the date of the allotment with the transaction value recorded in the registration document. Conclusion: The Tribunal allowed the appeal filed by the assessee, holding that the assessee fulfilled the requirements of the proviso to Section 56(2)(x)(b) and directed the AO to compare the stamp duty valuation as on the date of the allotment with the transaction value. Order Pronounced: The appeal filed by the assessee was allowed, and the order was pronounced in the open court on 23.05.2023.
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