MONEY MAGNUM NEST PRIVATE LIMITED,MAHARASHTRA vs. CIRCLE 14(1)(1), MUMBAI, MAHARASHTRA

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ITA 4898/MUM/2026Status: DisposedITAT Mumbai13 August 2026AY 2018-1910 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the date of fixing the consideration is relevant for Section 43CA, and the assessee's claim regarding allotment dates and stamp duty values on those dates requires factual verification. Since these documents were not before the lower authorities, the matter was restored to the Assessing Officer.

What were the facts?

The assessee, a real estate developer, transferred six immovable properties where the stamp duty value exceeded the agreement value. The Assessing Officer added the difference of Rs. 84,97,562/- under Section 43CA, as the assessee did not respond to the show cause notice. The CIT(A) confirmed the addition, finding the assessee's contentions unsubstantiated.

What were the issues?

Whether the stamp duty value on the date of agreement/allotment or registration should be considered for Section 43CA, and whether the assessee's claim for lower stamp duty value on the allotment date is substantiated.

Which sections of the Income-tax Act were involved?

Section 43CA,Section 115JB,Section 143(2),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “D” MUMBAI

Before: SHRI OM PRAKASH KANT & SHRI ANIKESH BANERJEE

For Appellant: Shri Paresh Shaparia, CA, Shri Mahesh Lodhe – SR DR
Hearing: 07/08/2026

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D” MUMBAI

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI ANIKESH BANERJEE (JUDICIAL MEMBER)

ITA No. 4898/MUM/2026 Assessment Year: 2018-19

Money Magnum Nest Private Circle 14(1)(1), Aayakar Bhawan, Limited, Plot No.157, M.K. Road, Mumbai – 400020, Samruddhi, 18th Road, Near Vs. Mumbai. Ambedkar Garden, Chembur East, Mumbai - 400071. PAN NO. AAACE 8257 C Appellant Respondent

Assessee by : Shri Paresh Shaparia, CA : Shri Mahesh Lodhe – SR DR. Revenue by

Date of Hearing : 07/08/2026 : 13/08/2026 Date of pronouncement ORDER PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against order dated 06.03.2026 passed by the learned Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre (Delhi) [in short, the learned CIT(A)] for Assessment Year 2018-19, raising following grounds: -

1.

NON ADJUDICATION OF GROUND RELATING TO VIOLATION OF PRINCIPLES OF NATURE JUSTICE BY NON-GRANTING OF PROPER AND REASONABLE OPPORTUNITY

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1.

The Learned CIT(A) (NFAC) erred in law by not adjudicating the ground of appeal relating to Violation of the principles of natural justice by non-granting proper and reasonable opportunity by the Learned AO whereby the order is bad 2. The Learned CIT (A)-NFAC ought to have adjudicated the ground of appeal relating to Violation of the principal of natural justice by not granting proper and reasonable opportunity. 3. The Learned CIT (A)-NFAC passing an order without adjudicating the ground of appeal is bad in law. II. VIOLATION OF PRINCIPLES OF NATURE JUSTICE BY NON- CONSIDERATION OF WRITTEN SUBMISSION AND SUPPORTING DOCUMENTS 1. The Learned CIT(A)- (NFAC) erred in law by violating the principles of natural justice by non-consideration of written submission and supporting documents furnished. 2. The Learned CIT(A)- (NFAC) failed to appreciate the fact that. i. Detailed written submissions justifying non-applicability of section 43CA along with supporting documents were furnished but not considered. ii. Not distinguishing nor considering judicial precedents relied upon A specific request was made for granting video conferencing hearing which was not granted 3. The Learned CIT(A)-NFAC erred in passing a cryptic order without adjudicating/considering the appellant's detailed written submissions along with supporting documents, judicial precedents and specific polht- wise contentions and propositions III. CONFIRMATION OF ADDITION UNDER SECTION 43CA OF INR 84,97,562 1. The Learned CIT(A)- NFAC erred in confirming the addition under section 43CA of the Act of INR 84,97,562 alleged on account of transfer of unit for a consideration less than assessable value by stamp duty authority. 2. The Learned CIT(A)-NFAC erred in not considering or countering the contentions and propositions made for deletion of addition made by the AO under section 43CA of the Income-tax Act, 1961 (the Act). 3. The Learned CIT(A)-NFAC erred in not considering the retrospective effect of amendment to section 43CA(1) r.w.s proviso granting benefit of difference in value 4. The addition under section 43CA of the Act of INR 84,97,562 requires to be deleted.”

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2.

At the outset, learned counsel for the assessee submitted that Ground Nos. 1 and 2 are not pressed by the assessee and therefore, the same are dismissed as infructuous.

3.

Briefly stated, the assessee is engaged in the business of real estate development, construction and allied activities. The assessee filed its return of income for the assessment year under consideration on 28.09.2018, declaring total income of Rs.9,76,778/-. However, the tax was paid on book profit declared under the provisions of Section 115JB of the Income Tax Act, 1961 [in short ‘the Act’] amounting to Rs.17,19,558/-. The return of income filed by the assessee was selected for scrutiny, and statutory notice under Section 143(2) of the Income Tax Act, 1961 (in short 'the Act') was issued on 27.09.2019, which was duly served upon the assessee.

3.1 During the year under consideration, the assessee transferred six immovable properties held as stock-in-trade. The Assessing Officer noticed that, in each case, the value adopted for stamp-duty purposes exceeded the consideration stated in the respective documents, details of which are reproduced as under: -

S.No. Registration Agreement value Stamp Duty Difference date Value 1 27.06.2017 1,05,69,153/- 1,20,09,787/- 14,40,634/- 2 27.06.2017 1,13,52,935/- 1,28,09,175/- 14,56,240/- 3 27.06.2017 1,37,65,727/- 1,52,69,155/- 15,03,428/- 4 27.06.2017 1,37,65,727/- 1,59,96,258/- 22,30,530/- 5 27.06.2017 1,54,86,976/- 1,70,23,875/- 15,36,899/- 6 11.12.2017 86,86,800/- 90,16,630/- 3,29,831/-

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Total 84,97,562/-

3.2 The Assessing Officer asked the assessee to explain as to why the difference between the agreement value and the stamp duty value of those properties may not be taxed under Section 43CA, as those properties were shown by the assessee as stock-in-trade. But no response was filed by the assessee. Therefore, the Assessing Officer made the addition of Rs.84,97,562/- in the order passed under Section 143(3) dated 14th April 2021, observing as under: -

6.

With regards to transaction in immovable property where the actual transaction value is less than the stamp duty, the assessee submitted that the immovable property in consideration is their stock in trade. The assessee mentioned that out of the six properties mentioned above five units were booked by one party and the booking of these five units were carried out on 23.09.2016 i.e. FY 2016-17. The sixth Immovable property was booked on 31.08.2017 i.e. FY 2017-18. The assessee also submitted that as per agreement rebate was given to purchaser for early payment of installments. However, the assessee has only attached the relevant pages of rebate given to the purchasers and has not furnished any sale deed in support of his claim of market value as on booking date and as on registration date and as to the mode of payments received as consideration for the sale of immovable property. 7. As per the provisions of section 43CA of the I.T Act-

“(1) where the consideration received or accruing as a result of the transfer by an assessee of an asset (other than a capital asset), being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of computing profits and gain from transfer of such asset, be deemed to be the full value of consideration received or accruing as a result of such transfer.” Hence the provisions of section 43CA of the Act is attracted in this case which states that the stamp duty value of the property as exceeds such consideration shall be taxable in the hands of the person selling the immovable property under the head ‘Income from Profits and gains of business and profession’. In this case, the assessee has sold six immovable properties and the stamp duty value of the properties exceeds the sale consideration by an amount of Rs.84,97,562/- and hence an amount equal to Rs.84,97,562/-is taxable in the hands of the assessee

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as per the provisions of section 43CA of the Act. Accordingly, amount of Rs.84,97,562/-is hereby added to the income of the assessee for AY 2018-19. 7.1 A show cause notice containing the draft assessment order proposing the above mentioned addition was issued to the assessee on 07.04.2011 to furnish response on or before 11.04.2021. However, no response has been received till date. Hence, it is inferred that the assessee has nothing to say in this regard and accordingly, amount of Rs.84,97,562/-is hereby added to the income of the assessee for AY 2018-19. (Addition of Rs.84,97,562/-)

4.

In appeal, the assessee contended that five of the properties had been allotted/booked on 23.09.2016, whereas their registration took place on 27.06.2017. According to the assessee, the consideration had been fixed at the time of allotment and the stamp-duty value as on that date was either lower than, or within the permissible range of, the consideration. It was further submitted that rebate had been allowed to the purchasers for early payment of instalments and that the difference arose essentially because the Assessing Officer had compared the consideration with the stamp-duty value prevailing on the subsequent date of registration. In respect of the sixth property, the assessee pointed out that the difference between the consideration and stamp-duty value was only about 3.80 per cent. The explanation submitted by the assessee is reproduced as under: -

8.

The difference between the Returned Income and Assessed income is of INR 84,97,562/- which is on account of:

Sr. No % Difference Agreement value Date of Gross Stamp Duty Difference Date of Stamp Difference as allotment letter (A-B) Registration Agreement Value as on considered by Duty Value per AO (C-D) Value after date of AO net of rebate as on (C) rebate allotment registratio (A) (B) n date considered

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by AO (D) 1 23.09.2016 1,18,19,153 1,13,87,396 4,31,757 NA 1,05,69,153 27.06.2017 1,20,09,787 -14,40,634 2 23.09.2016 1,27,02,935 1,21,50,690 5,52,245 NA 1,13,52,935 27.06.2017 1,28,09,175 -14,56,240 3 23.09.2016 1,53,15,727 1,45,00,437 8,15,290 NA 1,37,65,727 27.06.2017 1,52,69,155 -15,03,428 4 23.09.2016 1,53,15,726 1,51,20,866 1,94,860 NA 1,37,56,728 27.06.2017 1,59,96,258 -22,30,530 5 23.09.2016 1,72,36,976 1,61,76,690 10,60,286 NA 1,54,86,976 27.06.2017 1,70,23,875 -15,36,899 6 31.08.2017 86,86,800 90,16,630 -3,29,830 3.80 % 86,86,800 11.12.2017 90,16,630 -3,29,830 TOTAL -84,97,562

4.1 The assessee also relied upon the provisions of section 43CA(3), contending that where the date of agreement fixing the consideration and the date of registration are different, the stamp- duty value as on the date of the agreement may be adopted, subject to fulfilment of the statutory conditions. The assessee further relied upon the safe-harbour provision contained in section 43CA and contended that the subsequent amendments enhancing the permissible variation were curative in nature.

4.2 The learned CIT(A), however, upheld the addition principally on the ground that the assessee had not substantiated its contention regarding the booking/allotment date and the corresponding stamp-duty valuation with sufficient documentary evidence. He accordingly confirmed the addition of ₹84,97,562/- under section 43CA of the Act. The relevant finding of the learned CIT(A) is reproduced as under: -

“ 4. ……….. Findings and Decision

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I have carefully considered the assessment order, submissions of the appellant and material available on record. Addition under Section 43CA The appellant has sold six immovable properties during the year. It is an admitted fact that the stamp duty value exceeded the agreement value in all six cases and the total difference amounted to Rs.84,97,562/-. Section 43CA clearly provides that where consideration received on transfer of land or building (other than capital asset) is less than the value adopted for stamp duty purposes, such stamp duty value shall be deemed to be the full value of consideration. The appellant’s contention regarding rebate and booking date has not been substantiated with sufficient documentary evidence establishing that stamp duty value as on booking date should be adopted for the purpose of section 43CA. Accordingly, the Assessing Officer was justified in invoking section 43CA and making addition of Rs.84,97,562/-. The addition made by the AO is therefore confirmed.” 5. Before us, the learned counsel reiterated that the relevant allotment letters and supporting details demonstrate that the consideration had been fixed at the time of allotment and that the stamp-duty value on that date did not result in the excess contemplated by section 43CA. It was submitted that the relevant documents, which were not available before the lower authorities, have now been placed before the Tribunal and the issue may, in the interest of substantial justice, be restored to the Assessing Officer for verification.

6.

We have heard the rival submissions and perused the material available on record. The controversy before us is essentially whether, for the purposes of section 43CA, the stamp-duty value prevailing on the date of registration is to be adopted or whether the

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assessee is entitled to have the value prevailing on the date of the agreement/allotment taken into consideration and, consequently, whether the assessee satisfies the applicable safe-harbour provision.

6.1 Section 43CA(1) provides that, where the consideration received or accruing on transfer of land or building held otherwise than as a capital asset is less than the value adopted, assessed or assessable by the stamp-duty authority, the latter value is deemed to be the full value of consideration for computing profits and gains from such transfer. At the same time, section 43CA(3) provides that where the date of the agreement fixing the consideration and the date of registration are different, the value adopted, assessed or assessable by the stamp-duty authority may, subject to the conditions prescribed in sub-section (4), be taken as the value on the date of the agreement. The statutory provision thus makes the date on which the consideration is fixed a relevant consideration in appropriate cases.

6.2 In the present case, the assessee has placed before us the details of the dates of allotment/booking, the consideration stated to have been fixed at that stage, the corresponding stamp-duty values and the subsequent dates of registration. These materials were admittedly not before the lower authorities. The claim of the assessee, therefore, requires factual verification with reference to the allotment letters, agreements, terms relating to rebate, the date

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and mode of receipt of consideration and the stamp-duty value prevailing on the relevant date. The statutory conditions contained in section 43CA(3) and (4), as also the assessee's claim regarding the applicable safe-harbour margin, necessarily require examination on the basis of these primary documents.

6.3 In these circumstances, we consider it appropriate, rather than rendering a finding on the basis of an incomplete factual record, to restore the matter to the file of the Assessing Officer. The Assessing Officer shall examine the allotment letters, agreements and other supporting documents furnished by the assessee; determine the date on which the consideration was actually fixed; verify the receipt of consideration in the manner contemplated under section 43CA(4); ascertain the stamp-duty value applicable on the relevant date; and thereafter determine the applicability of section 43CA, including the benefit of the applicable safe-harbour provision, in accordance with law. Needless to say, the assessee shall be afforded adequate opportunity of being heard.

6.4. We clarify that we have expressed no opinion on the merits of the assessee's claim. All questions arising under section 43CA, including the applicability of sub-sections (3) and (4) and the safe- harbour provision, are left open for determination by the Assessing Officer on the basis of the evidence and in accordance with law. Accordingly, Ground No. 3 is allowed for statistical purposes.

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7.

In the result, the appeal of the assessee is partly allowed for statistical purposes.

Order pronounced in the open Court on 13/08/2026.

Sd/- Sd/- (ANIKESH BANERJEE) (OM PRAKASH KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 13/08/2026 M. Ranganath Vittal , Sr. P.S.

Copy of the Order forwarded to :

1.

The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.

BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai

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