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TMI Blog2025 (2) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporation Kolkata, Municipal Corporation, Road barakhola, Premises 401, Ward No. 109, Flat No..2C 1107, Floor, No.11, in respect of which the verification unit reported that assessee has purchased this property. The ld. AO noted that as per the said report the market value of the said property was Rs. 63,78,336/-, whereas the purchase price was Rs. 19 lacs. The ld. AO further noted as per the information available in departmental portal, circle rate value of the property was 59,24,736/-. The lower authorities thereafter observed that assessee has not admitted that she has purchased the said property and did not disclose the correct facts and therefore, the source of the investment of Rs. 19 lacs in the property remained unexplained. Accordingly, the addition made u/s 69 of the Act to the income of the assessee. 05. In the appellate proceedings, the ld. CIT (A) dismissed the appeal by observing that the assessee is required to explain the source of investment in the immovable property which he has failed to explain and therefore, the ld. AO has rightly confirmed the addition. 06. After hearing the rival contentions and perusing the materials available on record, we find that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority then the difference is liable to be added u/s 56(2)(x)(b) of the Act and thus, the ld. AO has rightly made the addition. 010. After hearing the rival contentions and perusing the materials available on record, we find that there is a difference between the purchase price of the flat and the value as per Stamp Valuation Authority. However, as a matter of fact the property was purchased in the earlier year as observed by us hereinabove in view of the payments being made in entirety in the earlier financial year and the details of payments have already extracted hereinabove. We note that the first payment of the flat was made on 12th June, 2012 and all the payments were completed till the F.Y. 2018-19. So far as the observation of the ld. AO is concerned that the difference between the purchase consideration and the value as per stamp valuation authority is to be taxed at 56(2)(x) of the Act, we note that the provisions of clause (x) of sub section (2)of sub section 56 were inserted by Finance Act 2017, with effect from 01.04.2017 and was not applicable because this flat was brought prior to that. Moreover, as per the first proviso to section 56(2)(x), it is stated that whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by applying the provisions of section 56(2)(x)(b) of the Act. Before proceeding further we will look at the provisions of the said section as extracted below - (2) In particular, and without prejudice to the generality of the provisions of subsection (1), the following incomes, shall be chargeable to income-tax under the head "Income from other sources", namely :- **** (x) where any person receives, in any previous year, from any person or persons on or after the 1st day of April, 2017,- (a) *** (b) any immovable property,- (A) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; (B) for a consideration, the stamp duty value of such property as exceeds such consideration, if the amount of such excess is more than the higher of the following amounts, namely:- (i) the amount of fifty thousand rupees; and (ii) the amount equal to ten per cent of the consideration: Provided that where the date of 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 agreement may be taken for the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and that in assessee's case whether the letter of allotment is the agreement to sell in order to consider the stamp duty value on that date and not the date of sale. In this regard we notice that the coordinate bench in the case of Parth Dashrath Gandhi vs ACIT (ITA No.1990/Mum/2022 dated 31.01.2023) has considered a similar issue where it is held that - 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) of the Act, which states that the stamp duty valuation as on the sale of sale agreement should be taken into consideration for the purpose of sec.56(2)(x), provided that amount of consideration or part thereof had been paid as per the mod prescrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. 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/- as VAT, Rs 1,35,187/- as service tax, Rs 5,02,000/- as stamp duty and Rs 30,000/- as registration charges. 12. The chronology of the events confirms that the finding of the A.O treating the agreement of the assessee as letter of intent is not correct. In this matter treating the said agreement as letter of intent shows an ove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act 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 cost of property, additions made by Assessing Officer were to be set aside." 14. Similar property in the case of assessee's wife with similar transactions has been accepted by the same A.O without any addition for the same A.Y. Here we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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