ANIL PANNALAL JAIN,MUMBAI vs. INCOME TAX OFFICER, KAUTILYA BHAVAN, MUMBAI

I have gone through the facts of case and heard at length. From the records, we noticed that the addition in the present case were made on account of the fact that assessee along with other person had purchased flat at Rs. 1,06,00,000/-. Whereas the stamp duty value of the property was Rs. 1,53,60,500/-. Therefore after providing opportunity of hearing to the assessee, the difference of purchase price of flat and stamp duty value was added by the AO which was also upheld by Ld. CIT(A), the operative portion is contained in para 7 and 8 and the same is reproduced herein below: After careful consideration of the submissions made by the assessee, the assessment order, and the case laws cited, I find that the appeal lacks merit for the following reasons: i. Date of Acquisition/Transfer The fundamental issue in this case is determining the date when the assessee acquired the immovable property for the purposes of section 56(2)(x)(b)(B) of the Income Tax Act, 1961. The assessee contends that the property was acquired on 07.09.2012 when the allotment letter was issued. However, this contention is legally untenable for the following reasons: 3 Legal Position on Registration Requirement: For any immovable property transaction to be legally enforceable and to constitute a valid transfer under the Income Tax Act, it must comply with section 53A of the Transfer of Property Act, which requires registration under section 17(1A) of the Registration Act, 1908. The Assessing Officer correctly observed that "for any purchase or sale agreement deed of immovable property to be covered u/s 53A of the Transfer of the Property Act, it is required to be a registered instrument for enforcing civil law rights."

Nature of Authority: The Vembu Vaidyanathan case involved government authority (DDA) allotments, whereas the present case involves a private builder (N.D Developers). The legal framework governing government housing schemes is fundamentally different from private real estate transactions. 2. Purpose of Litigation: The Vembu case dealt with capital gains taxation and holding period computation, not with section 56(2)(x) applicability. 3. CBDT Circulars Scope: As noted in the case itself, the circulars were specifically issued for DDA type allotments and cannot be mechanically applied to private builder transactions. Regarding Sujauddin Kasimsab Sayyed vs ITO (ITAT Mumbai): This case supports the Revenue's position rather than the assessee's contentions. The Hon'ble ITAT Mumbai in this case specifically dealt with similar facts and held that for section 56(2)(vii) (b) purposes, the date of execution of the registered agreement should be considered, not the date of allotment letter. it was held that immovable property is considered to be transferred on the date of execution of registered document and not on the date of delivery of possession. Thus, date of receipt in Tribunal's view is date of execution of registered document. The above view of Tribunal in Sujauddin's case is based on Supreme Court's decision in Alapote Venkatramiah v. CIT [1965] 57 ITR Cements (P.) Ltd. [1997] 1541 92 Taxman Key findings from Sujauddin case that support Revenue's position: As quoted from the Hon'ble ITAT order in Sujauddin case: "Sale agreement is different from saledeed. Sale agreement contains agreed upon terms and conditions between seller and buyer for the sale of property... On the other hand, sale deed is executed at the time of actual transfer of property i.e. transfer of ownership from the seller to the buyer." The Hon'ble ITAT further held: Immovable property is not conveyed by delivery of possession, but by a duly registered deed. Further, it is the date of execution of registered document, not the date of delivery of 5 Anil Pannalal Jain., Mumbai.

Valuation Report: The assessee has mentioned a valuation report showing fair market value of Rs. 1,03,00,000/ as on 07.09.2012. However, this is irrelevant because: The law requires consideration of stamp duty value, not fair market value The relevant date is 15.04.2017, not 07.09.2012 No such valuation report has been filed before me 2. Payment Through Banking Channels: While payments were made through proper banking channels, this does not alter the legal position regarding the date of transfer 3. Section 56(2)(x) Applicability: The assessee argues that section 56(2)(x) was not applicable in AY 201314. This argument is misconceived because: The transfer took place in AY 201718, not AY 201314 Section 56(2)(x)(b)(B) was introduced w.e.f. 01.04.2017 and is applicable to the present case 4. The assessee has also contended that in the case of Shri Pannalal Shantilal Jain (relative of the assessee) who is also the joint owner of the property purchased by Anil Pannalal Jain (i.e assessee) is also assessed on same issue for AY 2018-19 and no additions for difference in purchase value and stamp duty market value was done by Assessing Officer. The contention of the assessee does not support his case as the Law has been rightly applied in the instant case. 8. CONCLUSION After examining all the submissions, case laws, documentary evidence, and the assessment order , I find that: 1. The Assessing Officer has correctly applied section 56(2)(x)(b)(B) of the Income Tax Act, 1961. 2. The date of acquisition/transfer for the purpose of the said section is 15.04.2017 (date of execution of registered agreement) and not 07.09.2012 (date of allotment letter). 3. The case laws cited by the assessee are clearly distinguishable from the present facts, and the Sujauddin Kasimsab Sayyed case supports the Revenue's position.

The addition of Rs. 15,86,833/ representing the assessee's share (1/3rd) of the excess of stamp duty value over the agreement value is legally justified and factually correct. 5. The assessee has failed to demonstrate any legal or factual error in the assessment order. 6. The CBDT circulars relied upon by the assessee have limited applicability to private builder transactions and do not support the assessee's contentions. 7. The conditions for applying the first proviso to section 56(2)(x)(b)(B) are not satisfied in the present case. 4. No new facts or circumstances have been placed on record before me in order to controvert or rebut the findings so recorded by Ld. CIT(A). Therefore, I see no reasons to interfere into or to deviate from the lawful findings so recorded by Ld. CIT(A). Hence, the grounds raised and by the assessee stands dismissed. 5. In the result, the appeal filed by the assessee stands dismissed. Order pronounced in the open court on 13/11/2025 (SANDEEP GOSAIN)