NARESH BANSILAL JAIN,MUMBAI vs. INCOME TAX OFFICER, WARD 20(1)(1) MUMBAI, MUMBAI

The No.ITBA/NFA Honourable unreasonable Act, 1961 and 2. On facts Honourable C Rs.64,49,214 56(2)(x) of In between purc the property p the facts of t recorded und Director of Sh 2. The central iss difference between valuation in respect consequent addition 2.1 Briefly stated, th engaged in the busin the proprietary conc Jewellers. For the ye return of income ₹5,08,040/-.The retu statutory notices und During the course o had purchased a flat Group, which was su Section 132 of the A that search, alleged order dated 08/01/2025 AC/S/250/2024-25/1071984171[1] pass CIT[Appeal], NFAC, Delhi, is e, arbitrary, against the provisions of In d therefore liable to be quashed. and circumstances of the case and in C.I.T.(A) has erred in confirming the a 4/- made by the Assessing Officer und ncome Tax Act, 1961 on account of chase value and stamp duty value (50% purchased by the Appellant, without ap the case and on the basis of statemen der section 132(4) by Shri Amit Mahendr hree Sukhkarta Developers Pvt Ltd. sue for adjudication pertains the sale consideration and th of a flat purchased by the as of ₹64,49,214/- as income from he facts are that the assessee, a ness of retail trading of gold or cern M/s Shah Tarachand C ear under consideration, the as on 01.09.2021 declaring to urn was selected for scrutiny, der the Act were duly issued and f assessment, the AO noted th t in a project developed by M/s ubjected to a search and seizu Act on 25.11.2021. The Investi ly unearthed that certain flat Mr. NareshBansilal Jain 2 bearing sed by the excessive, ncome Tax n law, the addition of der section difference % share) of ppreciating nt on oath raRuparel, to the alleged he stamp duty ssessee and the m other sources. an individual, is rnaments under hamnaji Porwal ssessee filed his otal income of and necessary d complied with. hat the assessee s Ruparel Realty re action under igation Wing, in ts were sold or registered below th contravention of Sec observed that the KantaNaresh Jain, as the project “Ruparel M/s Shree Sukhkarta Ruparel Group. The determined the valu assessee, in response occupant in the redevelopment by th builder did not recogn accommodation, ther the matter was amic compensatory arrang all rights in the old crore.It was further nature of compensa rights, could not be property for inadequa 56(2)(x). However, th that the assessee substantiate the clai AO also relied on th Director of the de he market value, thus indic ctions 43CA and 56(2)(x) of th assessee, along with his s co-applicant, had purchased F l Ariana” for a consideration o a Developers Pvt. Ltd., an entity e stamp duty valuation auth ue of the said flat at ₹2,28 e, submitted that he was previo old structure which was d e same builder. It was stated t nize him as a lawful tenant enti re was prolonged dispute and n cably settled by allotting the s gement for the surrender of his d premises, for a nominal cons submitted that the transactio ation-cum-settlement for the lo e treated as a case of receip ate consideration within the mea he AO rejected this contention failed to furnish documenta im of prior occupation or tena he statement of Shri Amit Mah eveloper company, recorded Mr. NareshBansilal Jain 3 cating possible he Act. The AO spouse, Smt. Flat No. 4502 in f ₹1 crore from belonging to the hority, however, 8,98,427/-. The usly a tenant or demolished for that though the itled to alternate negotiation, and ubject flat as a possession and sideration of ₹1 n, being in the oss of tenancy t of immovable aning of Section on the ground ary evidence to ancy rights. The hendra Ruparel, during search proceedings, wherein market value. 2.2 Proceeding on t acquired the immova therefore, the prov Considering the ass computed the differe ₹64,49,214/- in the passed u/s 143(3) of 2.3. On further appe of the AO. After ana record, the appellate produced any credib receipts, utility bills establish his claim of held that mere refere describing the asses property, could not s possession. The auth findings and the dire flats, the transactio component. Accordin Section 56(2)(x) was reproduced as under n he admitted that certain flats this basis, the AO held that th able property for inadequate con visions of Section 56(2)(x) w sessee’s 50% share in the pr nce of ₹1,28,98,427/- and mad hands of the assessee in as the Act on 06/12/2022. eal, the Ld. CIT(A), concurred w alyzing the submissions and th e authority observed that the as ble or contemporaneous evidenc s, municipal records, or legal f occupation in the old premises ence to Point No. FF in the Agre ssee as an “illegal occupant” o suffice to substantiate the claim hority further noted that in vie ector’s statement admitting und on had the characteristics of ngly, the addition made by s upheld.The relevant finding : Mr. NareshBansilal Jain 4 were sold below he assessee had nsideration and, were attracted. roperty, the AO de an addition of ssessment order with the findings he materials on ssessee had not ce, such as rent documents, to s.The Ld. CIT(A) eement for Sale, of the erstwhile m of tenancy or w of the search der-valuation of f an on-money the AO under of ld CIT(A) is “6.1 On peru during appella a proprietor a Ornaments on style of M/s appellant had 23.03.2021 w at the sale co Sukhkarta De against the determined a Rs. 64,49,21 56(2)(x) of th appellant is t before demoli to be an illega the Agreemen 6.2 During th given the sam to substantia failed misera appellant faile point No. FF o the appellant any settleme "assessee fou rewarded for money compo Shri Amit M Developers Pr of the I. T. A find any rea addition ma 64,49,214/- u of the IT Act dismissed.” 3. We have carefu material on record in duly considered the r precedents cited befo usal of the submissions and the docum ate proceedings, it is observed that the ap and engaged in the business of tradin n retail basis & runs his firm under the Shah TarachandChamnajiPorwal Jewe d purchased flat No.4502 in "Ruparel A with Mrs. KantaNaresh Jain, wife as co onsideration value of Rs.1,00,00,000/- fr evelopers Private Limited (an entity of R Stamping Valuation Authority (SV t Rs.2,28,98,427/-. The AO has made ad 4/- under head income from other so he IT Act during the year. The contenti that he was earlier a tenant in old prem iation of old building and the builder whic al tenant cum occupant in Point No. FF on nt to sale. he appellate proceedings also, the appe me submissions in support of its claim. It i ate his submissions with evidences, wh ably. On perusal of records, it is seen ed to furnish any documentary evidence of agreement for sale. The AO has rightly t has failed to furnish any documents ent or in support of his submission ught for his rights with the builder and w the efforts made. This is a case where, th onent involved in the transaction as ac MahendraRuparel, Director of Shree S rivate Limited in his statement on oath u ct, 1961 on 28.11.2021. In view thereof ason to differ with the order of the AO ade by the assessing officer amou under head income from other source u/ t is upheld and the grounds of appeal ully heard the rival submission ncluding registered document o relevant statutory provisions as ore us. Mr. NareshBansilal Jain 5 ments filed ppellant is ng of Gold e name & ellers. The Ariana on o-applicant from Shree RR Group) VA) value dditions of ource u/s ion of the mises i.e., ch alleged n page 6 of ellant has is required hich it has n that the except the y held that regarding regarding was finally here is on- ccepted by Sukhkarta u/s 132(4) f, I do not O and the unting to /s 56(2)(x) l no. 1 is ns, perused the of property, and s well as judicial

1 The issue for det 4502 in “Ruparel Ari consideration of ₹1 cr 56(2)(x) of the Act, stated consideratio ₹2,28,98,427/-. The a person receives an than the stamp duty threshold, the differ “income from other that the transaction consideration and n from redevelopment, fundamental princip avoidance through tr penalize genuine se rights.In this context DattaramPitale v. ITO that where a new flat flat or tenancy righ transaction constitut purchase of property provisions of Sectio relevant finding of th ermination is whether the allotm iana” to the assessee, jointly w rore, attracts the deeming provi having regard to the differen on and the stamp duty Section 56(2)(x) of the Act prov ny immovable property for a co y value by an amount exceeding rential amount shall be charge sources.”However, the provisio represents an outright transfer not a settlement or exchange o tenancy, or compensatory arra ple underlying Section 56(2)(x) ransactions structured below fa ettlement arrangements involvi t, the Coordinate Bench of the T O (ITA No. 465/Mum/2025, A.Y t is allotted in exchange for sur hts under a redevelopment ag tes an exchange of capital asset for inadequate consideration. A on 56(2)(x) were held to be i e Tribunal (supra) is reproduced Mr. NareshBansilal Jain 6 ment of Flat No. with his wife, for isions of Section ce between the valuation of vides that where nsideration less g the prescribed eable to tax as on presupposes r for inadequate of rights arising angements. The is to curb tax air value, not to ing pre-existing Tribunal in Anil Y. 2018–19) held render of an old greement, such ts rather than a Accordingly, the inapplicable.The d as under:

8 Consequently, th statistical purposes. 4. In the result, statistical purposes Order pronoun (NARENDER KUMA JUDICIAL M Mumbai; Dated:16/10/2025 Rahul Sharma, Sr. P.S.