AUGUSTNE REX,MUMBAI vs. I.T.O, KAUTILYA BHAVAN, MUMBAI

Per Smt. Beena Pillai, JM: Present appeal filed by assessee arises out of the order dated 04/12/2025 passed by NFAC, Delhi [hereinafter referred to as “Ld.CIT(A)”] for Assessment Year 2018-19, on the following grounds:- “1. The Commissioner appeal has not taken into account the facts, that the property was booked in FY 2015-16 and an amount of Rs. 35,50,000/- was paid before registration in AY 2018-19 and the mode of payment was through banking channel. 2. The terms and conditions and details of Flat No. 1202, Palladium and was also mentioned in the letter of allotment which was overlooked by the commissioner appeals. Also it was mentioned during assessment, that share of assesse is only 25%; (50% owned by father and 25% owned by mother). Hence addition of 1/3'd share is also not correct. 3. On the facts and in law, the learned CIT (A) erred in confirming the assessment passed by the assessing officer, disregarding evidence of actual contribution / payments and thereby sustaining an unjustified addition. 4. The appellant craves leave to add, alter, amend or withdraw any of the above grounds at or before the time of hearing.”

2 I.T.A. No. 859/Mum/2026 2. Brief facts of the case are as under: The assessee is an individual and filed his return of income for the year under consideration on 09/12/2018 declaring total income of ₹6,17,350/-. Assessment proceedings were initiated and statutory notices u/s 143(2) along with 142(1) were issued to the assessee. In response to the notices, the representative of the assessee appeared before the Ld. AO and filed the requisite details as called for. 2.1. From the details filed, the Ld. AO noted that the assessee, along with his father and mother, purchased a flat bearing No. 1202 at 6 Vilez Excer, Borivali (W), Mumbai – 400103 from M/s. Chheda Builders for a consideration of ₹1.50 crores. 2.2. On verification from the office of the Sub-Registrar, Borivali, the Ld. AO noted that the stamp duty value of the property was ₹1,80,63,804/-. The Ld. AO invoked the provisions of section 56(2)(x) of the Act and added the difference between the purchase consideration and the stamp duty value amounting to ₹10,21,268/- (being one-third share) to the total income of the assessee. Aggrieved by the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A). 2.3. Before the Ld. CIT(A), it was submitted that the flat was booked during Financial Year 2015–16 and payments were made through account payee cheques. It was submitted that no transfer of property took place during the year under consideration and that only registration of the document was carried out. 2.4. The Ld. CIT(A), however, after considering the submissions of the assessee, observed and held as under: “5.0 I have carefully considered the assessment order, the grounds of appeal and the appellant's statement of facts along with the written

3 I.T.A. No. 859/Mum/2026 submission filed. The appellant's claim is that the flat was booked in F.Y. 2015-16 and that the allotment letter issued during that period contains the details of consideration; hence, the stamp duty value applicable on the date of booking should be adopted by virtue of the proviso to section 56(2)(x) of the Income-tax Act, 1961. However, the benefit of the proviso is available only where a legally enforceable agreement fixing the amount of consideration exists prior to the date of registration, and the whole or part of the consideration is paid through banking channels on or before such agreement date. While the appellant has produced an allotment letter containing consideration details, the same cannot be treated as a binding agreement for sale. An allotment letter is merely an indication of intention to allot a unit and does not constitute a concluded contract transferring rights or fixing obligations between the parties in the manner contemplated by the proviso.

5.1 Further, the records show that only part of the payment was made during the earlier period (mere Rs.20 Lakhs out of the total consideration of Rs.1.5 Crores as per the receipts submitted), and the balance substantial consideration was paid in later years. No agreement for sale or any other legally enforceable document fixing the final consideration has been produced for the earlier period. In the absence of such an agreement, the allotment letter-despite mentioning consideration cannot substitute the statutory requirement. 5.2 Accordingly, the Assessing Officer was correct in adopting the stamp duty value as on the date of registration, which is the date on which the transfer was legally completed. The appellant has not brought on record any material to show that the Assessing Officer's view suffers from any legal or factual infirmity. Further, the appellant's contention regarding a lesser share is rejected as the sale deed does not specify individual shares, and all payment receipts include the names of all three co-owners. In the absence of any legally enforceable document allocating differential shares, the appellant’s share is correctly taken as one-third.” Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal. 3. The Ld. AR submitted that the allotment letter was issued to the assessee by the builder on 06/09/2015, wherein the total consideration of the said flat was agreed at ₹1.50 crores. The allotment letter also states that a sum of ₹10,00,000/- had already been paid by cheque as earnest money towards purchase of the flat. The bank statement evidencing such payment has also been

4 I.T.A. No. 859/Mum/2026 furnished. The Ld. AR submitted that the balance sale consideration was paid by the assessee as per the schedule mentioned in the allotment letter. It was further submitted that all these documents were placed before the Ld. CIT(A), however, the same were not properly considered. The Ld. AR has placed before us the relevant documents in support of the above. 3.1. The Ld. AR placed reliance on various orders of coordinate benches of this Tribunal on identical issues and similar facts in support of his contention that the assessee has fulfilled the requirements as per provisos (1) and (2) to section 56(2)(x) of the Act, and therefore, no addition can be made in respect of the difference between the agreement value and the stamp duty value adopted at the time of registration. 3.2. On the contrary, the Ld. DR relied on the orders passed by the authorities below. We have perused the submissions advanced by both sides in the light of the records placed before us. 4. It is an undisputed fact that the assessee was allotted the subject flat vide allotment letter dated 06/09/2015, wherein the total consideration was fixed at ₹1.50 crores. The said allotment letter also evidences payment of ₹10,00,000/- by cheque as earnest money at the time of booking. The bank statement evidencing such payment has been placed on record. It is further observed that the balance consideration has been paid by the assessee in accordance with the payment schedule set out in the allotment letter. These evidences, which go to the root of the matter, have not been properly appreciated by the authorities below.

5 I.T.A. No. 859/Mum/2026 4.1. The issue for consideration is whether the stamp duty value as on the date of registration can be adopted for the purposes of section 56(2)(x) of the Act, or whether the consideration agreed at the time of allotment is to be considered in terms of the provisos to the said section. The provisos to section 56(2)(x) clearly provide that where the date of agreement fixing the amount of consideration and the date of registration are not the same, the stamp duty value as on the date of agreement may be adopted, provided the consideration, or a part thereof, has been paid by way of account payee cheque or other prescribed modes on or before the date of the agreement. 4.2. In the present case, the allotment letter dated 06/09/2015 constitutes a valid agreement fixing the consideration, and part payment through banking channels has been made on or before that date. Therefore, the conditions stipulated in the provisos to section 56(2)(x) stand satisfied. Consequently, the stamp duty value as on the date of allotment/agreement is to be considered, and not the value as on the date of registration. 4.3. In such circumstances, the addition made by the Ld. AO by adopting the stamp duty value as on the date of registration, without appreciating the applicability of the provisos to section 56(2)(x), cannot be sustained. The assessee has duly demonstrated that the transaction is covered by the statutory exceptions, and the difference between the agreement value and the stamp duty value at the time of registration cannot be brought to tax. 4.4. We also note that a similar view has been consistently taken by the coordinate benches of this Tribunal in identical factual situations, wherein it has been held that once part consideration has been paid

6 I.T.A. No. 859/Mum/2026 through banking channels at the time of allotment, the benefit of the provisos is available to the assessee. 5. In view of the aforesaid, we hold that the addition made by the Ld. AO u/s 56(2)(x) of the Act is unsustainable. The same is directed to be deleted. Accordingly, the ground raised by the assessee is allowed. In the result, the appeal filed by the assessee stands allowed. Order pronounced in the open court on 28/04/2026

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(BIJAYANANDA PRUSETH) (BEENA PILLAI) Accountant Member Judicial Member Mumbai Dated: 28/04/2026 SC Sr. P.S.

Copy of the order forwarded to:

(1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T.