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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 ..... Act 2017, with effect from 01.04.2017 and was not applicable because this flat was brought prior to that. As per the first proviso to section 56(2)(x), it is stated that when the date of agreement fixing the amount for transfer of immovable property and the date of registration are not same. The stamp valuation on the date of registration may be taken for the purpose of this sub clause but in any case, the insertion of this clause was made by the Finance Act, 2017 and was not applicable when the flat was bought. So far as the provisions of Section 56(2)(vii)(b) of the Act are concerned, the clause b was inserted by finance act 2015 with effect from 01.04.2014, which provides that in case consideration which is less than the stamp value of the property by an amount exceeding 50,000/- than the stamp value of such property as exceeded amount shall be added to the income of the assessee. The proviso provides that the stamp value of the property on the date of agreement may be taken for the purpose of this consideration. Even this clause does not apply to the assessee as this is applicable for A.Y. 2014-15 and therefore, these provisions are not applicable to the present transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we find that the ld. AO has made the addition on account of investment in the flat by the assessee of ₹ 19 lacs which according to the ld. AO was not explained. However, we note that the investment in the flat has been made in the earlier year and was duly reflected in the balance sheet of the assessee a copy of which is available at page no.3 of the Paper Book. We note that the investment in Bengal Peerless was shown at ₹ 18,96,939/- under the head investment and deposits in the balance sheet as on 31.03.2020. We further note that the payments for the purchase of flats were made in the earlier financial year as per the details contained in the memo of consideration attached with the sale deed dated 30.04.2019. The details whereof are extracted below for ready reference:- 07. We have also perused the copy of the agreement which is attached at page no.15 to 33 and thus, it is clear from the above that all payments were made through banking channel right from the F.Y. 2012-13 to A.Y. 2018-19. Therefore, conclusion drawn by the ld. AO is against the facts on record available in the assessment folder as all the materials were before the ld. AO. Similarly, the ld. CIT (A) h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 56(2)(x), it is stated that when the date of agreement fixing the amount for transfer of immovable property and the date of registration are not same. The stamp valuation on the date of registration may be taken for the purpose of this sub clause but in any case, the insertion of this clause was made by the Finance Act, 2017 and was not applicable when the flat was bought. So far as the provisions of Section 56(2)(vii)(b) of the Act are concerned, the clause b was inserted by finance act 2015 with effect from 01.04.2014, which provides that in case consideration which is less than the stamp value of the property by an amount exceeding 50,000/- than the stamp value of such property as exceeded amount shall be added to the income of the assessee. However, the proviso provides that the stamp value of the property on the date of agreement may be taken for the purpose of this consideration. Even this clause does not apply to the assessee as this is applicable for A.Y. 2014-15 and therefore, these provisions are not applicable to the present transaction which was agreed to in A.Y. 2013-14. We also note that this new charging section brought under statute book is applicable prospe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the date of agreement may be taken for the purposes of this sub-clause: Provided further that the provisions of the first proviso shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by way of an account payee cheque or an account payee bank draft or by use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed28, on or before the date of agreement for transfer of such immovable property: Provided also that where the stamp duty value of immovable property is disputed by the assessee on grounds mentioned in sub-section (2) of section 50C, the Assessing Officer may refer the valuation of such property to a Valuation Officer, and the provisions of section 50C and sub-section (15) of section 155 shall, as far as may be, apply in relation to the stamp duty value of such property for the purpose of this sub-clause as they apply for valuation of capital asset under those sections: [Provided also that in case of property being referred to in the second proviso to sub-section (1) of section 43CA, the provisions of sub-item (ii) of item (B) shall have effect as if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of consideration or part thereof had been paid as per the mod prescribed on or before the date of agreement for transfer of such immovable property. 7. Before us, the Ld A.R placed reliance on the decision rendered by the coordinate bench in the case of Mr. Sajjanraj Mehta vs. ITO (ITA No.56/Mum/2021 dated 05-09-2022), wherein it was held that the date of allotment letter can be taken as date of agreement of sale for the purposes of sec.56(2)(x) of the Act. On the contrary, the Ld D.R placed his reliance on the decision rendered by another co-ordinate bench, which was relied upon by AO & CIT(A), viz., SujauddianKasimsab (supra). 8. With regard to the decision rendered in the case of SujauddianKasimsab (supra), the Ld A.R submitted that the said decision has been rendered on the basis of facts prevailing in that case. The assessee, in the above said case, had paid Rs. 3.00 lakhs before the date of agreement, but the same was described as "earnest money deposit" in the Agreement, meaning thereby, the assessee did not fulfill the condition prescribed in sec.56(2)(x) of the Act. The Ld A.R furthersubmitted that the Tribunal did not consider the effect of second proviso to sec.56 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this matter treating the said agreement as letter of intent shows an over thinking and hyper technical interpretation at the end of the A.O. assessee's case clearly falls in the proviso to Section 56(2)(vii)(b). For sake of clarity we are reproducing herein below the relevant portion of proviso "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 paid by any mode other than cash on or before the date of the agreement for the transfer of such immovable property". 13. We further relied on following judicial pronouncement of coordinated benches of ITAT, Hon'ble High Court and Apex Court as under: a) "Siraj Ahmed Jamalbhai Bora vs. ITO Ward-1(3)(1)ITA No. 1886/M/ 2019 dtd. 28/10/2020, (Mum.) (Trib.): Date of registration irrelevant for Sec 56(2)(vii)(b) as substantial obligation discharged on date of agreement. b) Rad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n accepted by the same A.O without any addition for the same A.Y. Here we would like to rely on the decision of Hon'ble Gauhati HC. "Gulabrai Hanumanbox. vs. Commissioner of Wealth-tax [198 ITR 131 (Gauhati) (HC).] Two different Assessees having similar/identical facts w.r.t valuation of property cannot be assessed with different rates for the same property. Thereby, the order passed by the Assessing officer for cosharer of property is arbitrary and unjustified in law" 15. Keeping in view the facts of the case, chronology of events and respectfully following the pronouncements of the co-ordinated benches of ITAT, we delete the addition made by A.O and confirms that assessee is entitled to the benefits of proviso to Section 56(2)(vii)(b)." 10. Accordingly, following the above said decision, we hold that the respective allotment letters issued to the assessee should be considered as "Agreement to sell for the purposes of sec.56(2)(x) of the Act. Since the assessee has paid the parts of consideration as per the terms and conditions of allotment through banking channels prior to the execution of Sale agreement, we are of the view that the provisos to sec.56(2)(x) shall apply to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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