TARUN KUMAR SAHA,KOLKATA vs. ITO, KOLKATA

The present appeal is directed at the instance of the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter the “ld. CIT(A)”) dated 31/03/2023, passed u/s 250 of the Income Tax Act, 1961 (“the Act’), for Assessment Year 2016-17.

The sole issue for our consideration is that whether the ld. CIT(A) erred in confirming the addition of Rs.17,70,300/- on account of difference in stamp value and consideration paid for property purchased without considering the proviso to section 56(2)(vii)(b) of the Act.

At the outset, the ld. Counsel for the assessee submitted that though the immovable property (Flat) was registered in the name of the assessee and his wife during FY 2015-16, but the Flat allotment letter was issued on 13/09/2010 in favour of the assessee and his wife (joint owner) and consideration for the purchase of the property was Assessment Year: 2016-17 Tarun Kumar Saha 2 also passed during the FY 2010-11 itself and to support his contention, reference made to the bank statement exhibiting the details of payments made during FY 2010-11 and also copy of the allotment letter dt. 13/09/2010. On the strength of these documents it was contended that the case of the assessee falls under proviso to Section 56(2)(vii)(b) of the Act and the stamp duty value on the date of allotment of the flat should have been considered and in that case no addition could have been made on account of difference in stamp value and consideration paid for property purchases as the purchase consideration as on the date of allotment of flat was more than the stamp duty value. On the other hand, the ld. D/R vehemently argued supporting the orders of both the lower authorities.

We have heard rival contentions and perused the record placed before us. We notice that the assessee is an individual and declared income of Rs.13,22,510/- in the e-return filed on 06/10/2016. Case selected for limited scrutiny through CASS for the reason “whether investment and income relating to properties are duly disclosed”. The same was followed by serving of statutory notices 143(2) and 142(1) of the Act. During the course of assessment proceedings, the ld. Assessing Officer noticed that during the year under consideration, assessee had purchased a flat at Eden City, Maheshtala, District - 24 Parganas (S), for total consideration of Rs.19,09,620/-. The market value of the said property as on 29/07/2015 is Rs.36,79,920/-. The Assessment Year: 2016-17 Tarun Kumar Saha 3 assessee was asked to explain the source, to which in e-reply dt. 17/12/2018, was filed explaining the source of investment but on the issue of difference in market value of the property to that of the total consideration paid, there was no submission. Accordingly, the ld. Assessing Officer made addition of Rs.17,70,300/-. The assessee challenged the said addition before the ld. CIT(A) mentioning the details that the said property is jointly owned with his wife and the flat was allotted on 13/09/2010, and consideration has been passed on during FY 2010-11 itself. However, ld. CIT(A) immediately directed the Assessing Officer to examine the registered sale deed and whether the above property is under joint ownership and also directed the Assessing Officer to examine the case of the assessee’s wife Smt. Manisha Saha, as per the appropriate remedial measures available u/s 147 of the Act.

Before us, detailed paper books containing 21 pages has been filed. Eden Real Estate Pvt. Ltd., issued an allotment letter dt. 13/09/2010 for Flat No. 1203 at Tower C-1 at Eden City, Maheshtala and the sum payable towards the said allotment was Rs.19,58,791/- (in 10 instalments) and annexure is also enclosed towards payment schedule. This allotment letter has been issued in the joint name of assessee i.e., Tarun Kumar Saha and Manisha Saha. Further we notice that the payment against purchase consideration was paid by the assessee at Rs.9,94,832/- and Rs.48,275/- vide cheque no. 336934 dated 29/09/2010 and cheque no. 459983 dated 29/09/2010, drawn at Assessment Year: 2016-17 Tarun Kumar Saha 4 Allahabad Bank and the same were cleared from Bank on 01/10/2010. Remaining sum of Rs.8,66,513/- was paid by assessee’s wife Ms. Manish Saha through her bank account held with State Bank of India. All the payment details are duly verifiable from the bank statement. Now, the Flat was finally registered in the name of the assessee and his wife during the year under consideration. Under these fact and circumstances, we have to examine the applicability of provisions of Section 56(2)(vii)(b) of the Act, which reads as follows:- “(vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009 61[but before the 1st day of April, 2017],— (a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum; 62[(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 paid by any mode other than cash on or before the date of the agreement for the transfer of such immovable property;]”