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TMI Blog2023 (6) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... st payment of Rs.2 lakhs was made on 8-10-2009 subsequently after date of agreement, the revenue cannot rely on the second proviso to section 56(2)(x) of the Act and tax the difference in stamp duty value of flat as per SRO and purchase consideration as per agreement. Since the section 56(2)(x) of the Act is not applicable to the assessee, as the agreement was entered prior to 104-2017, hence the second proviso cannot be made applicable and the assessee cannot be fastened the liability in the light of second proviso to section 56(2)(x) - Direct the AO to delete the addition and allow the grounds of appeal in favour of the assessee. - ITA No. 202/Mum/2023 - - - Dated:- 29-5-2023 - Shri B.R. Baskaran, Accountant Member And Shri Pavan Kumar Gadale, Judicial Member For the Appellant : Mr.Tanmay Phadke.AR For the Respondent : Ms.Naina K Kumar.DR ORDER PER PAVAN KUMAR GADALE JM: The appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi/CIT(A) passed U/sec 250 of the Act. The assessee has raised the following grounds of appeal: 1. On the facts and in the circumstances of the case and as per the law, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tute book on the date of execution of the agreement. Thus, the addition of Rs. 9,88,343/ - (50% of Rs. 19,76,686/-) as confirmed by the Learned Commissioner (Appeals) under Section 56(2)(x) of the Act is bad in law and may be deleted. 5. Without prejudice to the above, for the sake of presumption without any admission, it is considered that the provisions of Section 56(2)(x) of the Act were applicable to the present case, in such a scenario, the second proviso to the section would be read down to achieve its purpose when there was no observation by the Revenue that the Appellant had paid over and above the sale consideration and the addition of Rs. 9,88,343/(50% of Rs. 19,76,686/-) as confirmed by the Learned Commissioner (Appeals) under Section 56(2)(x) of the Act may be deleted. 6. The Appellant craves leave to add, alter, rescind, or amend any of the above grounds of appeal 2. The brief facts of the case are that, the assessee is engaged in the business of manufacturing of transformers and electrical intermediate items. The assessee has filed the return of income for the A.Y 2018-19 on 28.10.2018 disclosing a total income of Rs. 9,50,340/- and the return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the officer at the time of assessment which consists of Income Tax Return, Computation Sheet and Balance Sheet, Profit and Loss were submitted on February 23, 2021. We are attaching again for your ready reference. 3 The original purchase agreement date was 13th July, 2009 which is mentioned on the agreement but for the purpose of registration the M/s Housing Development and Infrastructure Limited (HDIL) (seller) had changed the year of purchase manually from 2009 to 2017. HDIL is currently under investigation in Mumbai for various frauds with Banks and other legal agencies. Copy of purchase agreement is attached. 4 The M/s HDIL (seller) had changed the agreement date to 2017 from 2009 on the top page of the agreement However, on page 18 at clause 10 of the purchase agreement, it is mentioned that all the payment for the property has to be done till 30.06.2011. Hence, it is proved that the property is purchased in 2009 Also, major payments for the property were made starting from 2009 and copies of receipts were submitted to the learned assessing officer on February 12, 2021. Copies of receipts are attached for ready reference. 5 The assessee and his co-owner had ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to the learned assessing officer. As Ms/HDIL (seller) is under liquidation and its owners are in judicial/police custody and not available we are trying to arrange more receipts for payments made. 1. The officer has issued order under section 56(2)(x) the Income Tax Act, 1961 which is effective from 01.04.2017, as the property is purchased in 2009 the aforesaid section does not apply to the assessee. Since the initial transaction started in 2009. 2 Screen shot of submissions made as per the e-filing website is attached for ready reference. 3 In view of the above, we kindly pray that kindly delete the additions made by the Learned Assessing officer and also consequential interest and initiation of penalty proceedings 7. I have considered the facts of the case, assessment order and assessee purchased a property from HDIL on 14-07-2017 for total consideration of Rs. 32,97,500/value of which was determined at Rs. 52,74,186/by the stamp authority for stamp duty purpose. The AO was of the view that this transaction attracted the provisions of sec. 56(2)(x) of the Act and the assessee did not disclose fully and truly all the material facts relating to the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd without prejudice to the generality of the provisions of sub-section (1) the following incomes, shall be chargeable to income-tax under the head Income from other sources namely:- x) on or after the 1st day of April 2017,- any sum of money, without consideration the aggregate value of which (a) exceeds fifty thousand rupees, the whole of the aggregate value of such sum; (b) any immovable property.- (A) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration: (B) Following item (B) shall be substituted for the existing item (B) of sub-clause (b) of clause (x) of sub-section (2) of section 56 by the Finance Act, 2018, w.e.f. 1-4-2019: for a consideration, the stamp duty value of such property as (B) exceeds such consideration, if the amount of such excess is more than the higher of the following amounts, namely:- (1) the amount of fifty thousand rupees; and (ii) the amount equal to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and the date of registration are not the same. The date of agreement as submitted by the appellant is 13-07-2009 whereas purchase deed was registered on 14-07- 2017. However, from the details of payments given in a tabular Form in para 6 (supra)it is seen that the first payment of Rs2,00,000/- by way of cheque has been made on 08-10-2009 vide cheque no. 288218. This date i.e. 08-10-2009 is subsequent to the date of agreement i.e. 13-07-2009 therefore as per second proviso to section 56(2)(x) of the Act, the appellant's claim is not allowable. However, as the appellant is only 50% owner of the property purchased, only 50% of the difference in the stamp duty value and purchase consideration is to be added in the hands of the appellant. Thus, the addition of Rs. 19,76,686/- made by the AO is reduced to 50% of this amount the appellant gets partial relief The ground raised by the appellant regarding this issue is partly allowed. Finally the CIT(A) has partly allowed the assessee appeal. Aggrieved by the CIT(A)order, the assessee has filed an appeal before the Hon ble Tribunal. 5. At the time of hearing, the Ld. AR submitted that the CIT(A) has erred in granting partia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lature. The provisions of Sec. 56(2)(x) of the Act are incorporated in the Finance Act 2017 with the prospective applicability from A.Y. 2017-18 and the transactions entered into prior to 1.04.2017 would not suffer any implications of the section. Whereas in the present case, the transaction of purchase of flat is vide agreement dated 13.07.2009 and it was registered on 14-7-2017 in the F.Y. 2018-19. Further, merely because the first payment of Rs.2 lakhs was made on 8-10-2009 subsequently after date of agreement, the revenue cannot rely on the second proviso to section 56(2)(x) of the Act and tax the difference in stamp duty value of flat as per SRO and purchase consideration as per agreement. Since the section 56(2)(x) of the Act is not applicable to the assessee, as the agreement was entered prior to 104-2017, hence the second proviso cannot be made applicable and the assessee cannot be fastened the liability in the light of second proviso to section 56(2)(x) of the Act. We considering the facts, circumstances, submissions, ratio of the judicial decisions set-aside the order of the CIT(A) and direct the Assessing officer to delete the addition and allow the grounds of appeal in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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