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TMI Blog2024 (11) TMI 688X X X X Extracts X X X X X X X X Extracts X X X X ..... dent from page no.36 of the paper book. Thus, the allotment letter was not only duly accepted by the assessee along with her husband but other conditions were also fulfilled. Therefore, respectfully following the aforesaid decision, we are of the considered view that the allotment letter can be considered as an agreement to sell in the present case. Even though the date of agreement fixing the amount of consideration for the transfer of immovable property, in the present case, is not the same as the date of registration, however, for the applicability of the first proviso to section 56(2)(vii)(b) of the Act, it is further relevant that the amount of consideration or part thereof is paid by any mode other than cash on or before the date of agreement in terms of the second proviso to section 56(2)(vii)(b). Assessee has furnished a copy of statement of its bank account maintained with the Maharashtra Cooperative Bank Ltd from 11/03/2008 till 02/04/2009 in order to show the payments made to the builder. Since the letter of allotment was issued by the builder on 29/05/2007, therefore for the purpose of applicability of the first and second proviso to section 56(2)(vii)(b) of the Act, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot considering the bank statement of the appellant, Ledger copy confirmation of the Builder and letter of allotment issued to the appellant by the builder submitted while disputing the proposed addition during the assessment proceedings. 3. In the facts and circumstances of the case and in law the learned Commissioner of Income-tax (Appeals) National Faceless Appeal Centre erred in not taking into account the provisions of Sec.56(2)(x). 3. The brief facts of the case pertaining to this issue, as emanating from the record, are: The assessee is an individual and for the year under consideration filed her return of income on 31/07/2014 declaring a total income of INR 3,82,750. The return filed by the assessee was selected for scrutiny through CASS and statutory notices under section 143(2) and section 142(1) of the Act were issued and served on the assessee. During the assessment proceedings, it was observed that the assessee purchased a flat at Flat No. 504, 5th floor, A-Wing, Veermani Market, Mumbai-400009, through builder J. Gala Builders during the relevant financial year. On perusal of the registered agreement dated 25/11/2013, it was observed that the assessee has paid INR 25,62 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 56(2)(vii)(b) of the Act. Being aggrieved, the assessee is in appeal before us. 6. We have considered the submissions of both sides and perused the material available on record. The solitary grievance raised by the assessee is against the addition made under section 56(2)(vii)(b) of the Act. Before proceeding further, it is relevant to analyse the provisions of section 56(2)(vii)(b) of the Act, which reads as follows: - (b) any immovable property, (i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; (ii) 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: Provided that where the date of the agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of the agreement may be taken for the purposes of this sub-clause: Provided further that the said proviso shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find that the coordinate bench held that the allotment letter can be considered as an agreement for sale. The relevant findings of the coordinate bench, in the aforementioned decision, are reproduced as follows: 11. According to the AO and Ld.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 Dashrath Gandhi v. Addl./Dy./Asstt. CIT [IT Appeal No. 1990 (Mum.) of 2022, dated 31-1-2023 held that the allotment letter should be considered as agreement for sale. The relevant finding of the Tribunal (supra) is reproduced as under: - 6. 'We heard the parties and perused the record. We notice that the AO has considered the stamp duty value as on the date of registration of the agreement to sell for the purpose of determining the applicability of sec.56(2)(x) of the Act. However, the facts that the assessee had been allotted both the properties by way of allotment letters and further, the assessee has also paid instalments as per that letter are not disputed. Hence, the question that arises is whether the allotment letter can be considered as agreement to sale within the meaning of the provisos to sec. 56(2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions about the property. This agreement between assessee and developer clearly confirms the amount of consideration along with other terms and conditions relating to levy of stamp duty, service tax and other charges to be paid by the assessee. 11. The finding of the A.O vide pg no-4, para-2.6 wherein he observed that assessee has deposited Rs. 14 lacs with the developer to year mark the said premises for Rs. 70 lacs. Even if for the time being it is assumed that this agreement is merely a letter of intent, still amount mentioned in this so called letter of intent can't be changed by either of the party. At the max the parties involved may opt for exit from the transaction but amount of consideration can't be changed. This transaction of the assessee has to be analysed in commercial parlance, without finalisation of consideration nobody will deposit 20% of the final consideration. The vitality of the agreement further found force from the behaviour of the assessee as confirmed by the A.O also that assessee paid further Rs. 34.5 lacs till financial year 2012-13. Assessee also paid Rs. 1,00,285/- vs VAT, Rs1,35,187/- as service tax, Rs. 5,02,000/-as stamp duty and Rs. 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration by cheque on very next day of execution of purchase agreement and registry was done after a year, since such part payment made by cheque on very next day of execution of agreement was towards fulfilment of terms of purchase contract itself and there was no mala fide or false claim on part of assessee, no addition could be made on account of difference between amount of sale consideration for property shown in purchase agreement and stamp duty value of said property on date of registry by invoking section 56(2)(vii)(b) (e) Dy. CIT-5(3)(1) vs. Deepak Shashi Bhusan Roy ITA No. 3204 3316/M/2016 dtd. 30/07/2018(Mum.) (Trib.) In order to determine taxability of capital gain arising from sale of property, it is date of allotment of property which is relevant for purpose of computing holding period and not date of registration of conveyance deed (f) Mohd. Ilyas Ansari v. ITO-23(2)(3), Mumbai [ITA No. 6174/M/2017dtd.06/11/2020, 186 ITD 407 (Mumbai - Trib.)] Where Assessing Officer mechanically applied provisions of section 56(2)to difference between stamp duty value and actual sale consideration paid by assessee and made additions, without making any efforts to find out actual co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... take appropriate decision in accordance with law after affording adequate opportunity of being heard.' 12. The Ld.CIT(A) has relied on the decision of the Hon'ble Supreme Court in the case of Balbir Singh Maini (supra) but we find that in the said decision, following substantial questions were raised before the Hon'ble High Court:- (i) Whether the transactions in hand envisage a transfer exigible to tax by reference to section 2(47)(v) of the Income-tax Act, 1961 read with section 53-A of the Transfer of Property Act, 1882? (ii) Whether the Income-tax Appellate Tribunal, has ignored rights emanating from the JDA, legal effect of non registration of JDA, its alleged repudiation etc.? (iii) Whether possession as envisaged by section 2(47)(v) and section 53-A of the Transfer of Property Act, 1982 was delivered, and if so, its nature and legal effect? (iv) Whether there was any default on the part of the developers, and if so, its effect on the transactions and on exigibility to tax? (v) Whether amount yet to be received can be taxed on a hypothetical assumption arising from the amount to be received? 13. The Hon'ble Supreme Court accordingly, adjudicated on the issue o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r before the date of agreement in terms of the second proviso to section 56(2)(vii)(b) of the Act. In the paper book, the assessee has furnished a copy of statement of its bank account maintained with the Maharashtra Cooperative Bank Ltd from 11/03/2008 till 02/04/2009 in order to show the payments made to the builder. However, since the letter of allotment was issued by the builder on 29/05/2007, therefore for the purpose of applicability of the first and second proviso to section 56(2)(vii)(b) of the Act, it is relevant that some evidence is brought on record to show that the consideration or part thereof was paid by the assessee by any mode other than cash on or before the date of the allotment letter, i.e. 29/05/2007. Even in the decision of the coordinate bench of the Tribunal relied upon by the assessee, as noted in the foregoing paragraphs, while directing the AO to compare the stamp duty valuation as on the date of allotment with the transaction value recorded in the registration document, we find that the coordinate bench took into consideration the fact that the taxpayer, in that case, paid an amount of INR 2 lakh at the time of booking prior to the allotment letter. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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