INCOME TAX OFFICER-3(1)(3), MUMBAI, MUMBAI vs. GLISTENING PROPERTIES PVT. LTD, MUMBAI

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ITA 448/MUM/2026Status: DisposedITAT Mumbai27 July 20267 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that Section 56(2)(x) is applicable only to transactions where the immovable property is received pursuant to conveyance deeds executed on or after April 1, 2017. Since the conveyance deed was executed on March 31, 2017, the provision was not applicable.

What were the facts?

The assessee purchased an immovable property for Rs. 1,01,01,010, while the stamp duty valuation was Rs. 4,10,86,500. The Revenue sought to tax the difference under Section 56(2)(x), arguing the transfer was completed on registration in September 2017. The assessee contended the conveyance deed was executed on March 31, 2017, before the section's effective date.

What were the issues?

The key issue was whether Section 56(2)(x) applied to a property transaction where the conveyance deed was executed before the section's effective date, even if registered later.

Which sections of the Income-tax Act were involved?

Section 56(2)(x)

AI-generated summary — verify with the full judgment below

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

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI PAWAN SINGH (JUDICIAL MEMBER)

ITA No. 448/MUM/2026 Assessment Year: 2018

Income Tax Officer Ward Glistening Properties Private 3(1)(3), Room No.606, 6th Limited, Embrassy Centre, Floor, Aayakar Bhawan, Vs. Narimon Point, Mumbai – Mumbai – 400020, 400021, Maharashtra. Maharashtra PAN NO. AAECG 8907 F Appellant Respondent

Assessee by : Ms. Shefali Garg, CA. : Shri Basavaraj Hiremath – CIT DR Revenue by a/w Shri Rajgopal Parthasarathi – SR DR.

Date of Hearing : 15/07/2026 Date of pronouncement : 27/07/2026

ORDER u/s 254(1) of Income Tax Act, 1961 PER: OM PRAKASH KANT, AM

This appeal by the Revenue is directed against order dated 20.11.2025 passed by the Ld. Commissioner of Income-Tax (Appeals) – National Faceless Appeal Centre, Delhi [in short, ‘the Ld. CIT(A)’], for Assessment Year (in short ‘A.Y’), 2018-19, raising following grounds:- 1. On facts and in law, the learned Commissioner of Income Tax (Appeals) has erred in holding that the provisions of section 56(2)(x) of the Income-tax Act, 1961 are not applicable to the present case, without appreciating that the transfer of

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the immovable property was completed only on 20.09.2017, i.e. after the said provision had come into force."

2.

On facts and in law, the learned CIT(A) failed to appreciate that mere execution of a purchase agreement dated 31.03.2017 does not result in a valid transfer of immovable property unless the sale deed is duly registered as mandated under the Transfer of Property Act, 1882 and the Registration Act, 1908.

3.

"On facts and in law, the learned CIT(A) erred in ignoring that the assessee himself applied for revaluation of the property before the Office of the Collector of Stamps on 13.07.2017, pursuant to which the stamp valuation authority determined the fair market value at Rs.4,10,66,500/- vide order dated 18.08.2017, i.e., well after 01.04.2017."

4.

"On facts and in law, the learned CIT(A) failed to consider that the sale deed was ultimately registered on 20.09.2017 and stamp duty amounting to Rs. 20,53,330/- was paid on such revalued amount, thereby conclusively establishing that the effective date of acquisition of the property falls in the period governed by section 56(2)(x) of the Act."

5.

"On facts and in law the learned CIT(A) erred in law by treating the date of execution of the agreement to sell as the determining factor for applicability of section 56(2)(x), despite settled judicial principles that ownership in immovable property is transferred only upon registration of the conveyance deed." 6. "On facts and in law, the Assessing Officer correctly invoked the provisions of section 56(2)(x) of the Act, as the difference between the stamp duty value of Rs.4,10,66,500/- and the actual consideration of Rs 1,01,01,010/-amounting to Rs.3,09,85,490/-, exceeded the permissible threshold and was chargeable to tax as income from other sources."

7.

"On facts and in law, the learned CIT(A) failed to appreciate that section 56(2)(x) is applicable to "receipt" of property and such receipt occurred only upon registration of the sale deed on 20.09.2017, when the assessee legally acquired the property."

8.

"On facts and in law, the learned CIT(A) failed to appreciate the facts that the Remand report was called by himself and after submissions of Remand report was made within time, however the same was not considered and neither brought on record while passing order."

9.

"On facts and in law, the order of the learned CIT(A) is contrary to facts, law, and binding judicial precedents which consistently hold that the date of registration of the sale deed is the decisive date for determining the transfer and taxability of immovable property.”

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2.

Briefly stated, the relevant facts are that the assessee filed its return of income for the assessment year under consideration on 03.09.2018, declaring a loss of Rs.32,238/-. The return was selected for scrutiny, and statutory notices issued under the Income-tax Act, 1961 ("the Act") were duly served upon the assessee. Although the assessee participated in the assessment proceedings, the compliance was only partial. 2.1 During the course of assessment, the Assessing Officer observed that the assessee had purchased an immovable property for a consideration of Rs.1,01,01,010/-, whereas the value adopted by the Stamp Valuation Authority for the purposes of stamp duty was Rs.4,10,86,500/-. According to the Assessing Officer, the differential amount of Rs.3,09,85,490/- was liable to be taxed under the provisions of section 56(2)(x) of the Act. Since no satisfactory explanation was furnished by the assessee, the Assessing Officer proceeded to make an addition of the aforesaid differential amount, being the difference between the stamp duty valuation and the consideration recorded in the registered conveyance deed. 2.2 Aggrieved, the assessee carried the matter in appeal before the learned Commissioner of Income-tax (Appeals). It was contended that the Assessing Officer had failed to afford an effective opportunity of hearing, thereby depriving the assessee of placing the relevant facts on record explaining the substantial difference

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between the purchase consideration and the stamp duty valuation. It was submitted that the property acquired by the assessee comprised a structure which was more than 65 years old, was in a dilapidated condition, and required substantial structural repairs and expenditure before it could be rendered habitable. According to the assessee, these factors materially affected the fair market value and adequately explained the lower consideration agreed between the parties. 2.3 The assessee also raised a legal contention that section 56(2)(x) of the Act became operative only with effect from 01.04.2017, whereas the conveyance deed in the present case had been executed and the property had been received by the assessee on 31.03.2017. The learned CIT(A) examined this contention, including the order passed by the Office of the Collector of Stamps relating to the market valuation of the property in FY 2017-18 on 18/8/2017. Upon consideration of the statutory provisions and the factual matrix, the learned CIT(A) held that since the transfer of the property had taken place on 31.03.2017, i.e., prior to the date on which section 56(2)(x) came into force, the said provision had no application to the transaction in question. On this legal ground, the learned CIT(A) allowed the appeal and deleted the addition made by the Assessing Officer. 3. We have carefully considered the rival submissions and perused the material available on record. The controversy before us lies within a narrow compass. The sole issue requiring adjudication is

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whether the provisions of section 56(2)(x) of the Act are applicable where the immovable property was conveyed and received by the assessee on 31.03.2017, i.e., prior to the date from which the said provision became effective.

3.1 The learned counsel for the assessee filed copy of convenience deed dated 31/03/2017 wherein it is specifically mentioned that property has been transferred to the buyer on ‘as is where is’ basis along with all piece or parcel of land together with structure standing thereon. The ld Counsel placed reliance upon the decision of the Coordinate Bench of the Tribunal in DCIT v. Romell Housing LLP in ITA No.3935/Mum/2023 and C.O. No.21/Mum/2024, wherein, after an exhaustive consideration of the statutory provisions and the judicial precedents governing the issue, the Tribunal held that section 56(2)(x), inserted by the Finance Act, 2017 with effect from 01.04.2017, applies only to transactions where the immovable property is received pursuant to conveyance deeds executed on or after 01.04.2017. The relevant findings of the Coordinate Bench read as under: “15. Therefore, in view of the facts and circumstances of the present case, legal position and judicial pronouncements as noted above, we are of the considered view that since the deed of conveyance was executed amongst the parties in respect of immovable property on 31.03.2017, the provisions of section 56(2)(x), which were inserted by Finance Act, 2017 w.e.f. 01.04.2017, are not applicable to the facts wherein the sale deeds are executed on or after 01.04.2017 pursuant to which immovable property is received by any person. As a result, grounds no.1(a) and 1(b) raised in assessee’s Cross Objection are allowed.” 3.2 The facts of the present case are materially identical to those considered by the Coordinate Bench in Romell Housing LLP (supra).

Glistening Properties Private Limited 6 ITA No. 448/MUM/2026

It is an undisputed position that the conveyance deed in respect of the impugned property was executed on 31.03.2017, i.e., prior to the date on which section 56(2)(x) came into force. The reference to the Collector stamp duty for valuation doesn’t alter the date of conveyance and that may change the value of the property and consequent stamp duty payable only. Judicial discipline requires that, in the absence of any distinguishing feature or contrary binding precedent, a Coordinate Bench should follow the view already taken on an identical question of law. Respectfully following the ratio laid down in DCIT v. Romell Housing LLP (supra), we hold that the provisions of section 56(2)(x) are inapplicable to the transaction under consideration. Consequently, the learned CIT(A) was fully justified in deleting the addition of Rs.3,09,85,490/- made by the Assessing Officer. We find no legal or factual infirmity in the impugned appellate order warranting interference. Accordingly, the grounds raised by the Revenue are dismissed.

4.

In the result, the appeal filed by the assessee is dismissed. Order pronounced in the open Court on 27/07/2026.

Sd/- Sd/- (PAWAN SINGH) (OM PRAKASH KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 27/07/2026 M. Ranganath Vittal , Sr. P.S.

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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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