ARVIND APTE,KALYAN vs. INCOME TAX OFFICER, KALYAN

PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of learned Commissioner

(Appeals) dated 30 July 2025 for assessment year (AY) 2018- 19. Though, the

assessee has raised multiple grounds of appeal, however, in our considered

view, the substantial grounds of appeal relate to upholding addition under

section 56(2)(vii) of Rs. 22,37,967/-.

Learned authorised representative (ld.AR) of the assessee submits that during

the relevant financial year the assessee purchased immovable property along

with his family members. Initially, the assessee and his co-owner made agreement to sale on 29th January 2011, fixing the sale consideration.

However, the transaction of registration of property was completed on 23rd

February 2018. At the time of entering into agreement to sale, the assessee

made part payment of sale consideration through banking channel in

November 2011 of ₹ 2,50,000/-, ₹ 3.00 lakhs in December 2011, Rs.1.00 lakh

was paid in April 2013, Rs.50,000 in March 2014, and certain payments in

2015, as well as in 2016 and 2017. Since part payment of consideration was

paid at the time of entering into agreement other than cash payment and by

way of banking channel, therefore, the assessee is eligible for the benefit of

First & Second Proviso to section 56(2)(vii) of the Act. The lower authorities

denied such benefit despite bringing all such fact in their notice. The assessee

has placed on record the copy of agreement acknowledging such part

payment. The assessee also placed on record the bank statements reflecting

various payments made to the seller through banking channel. The learned

AR of the assessee further submitted that no addition was made in case of

co-owner despite the fact that both are similar situated, so far as facts are

concerned. Thus, the revenue cannot give different treatment in the hand of

one corner and the other. Thus, the assessee is also liable to be succeeded on

this ground alone. To support his submission, the learned AR of the assessee

relied upon the following decisions;  Radha Kishan Kungwani Vs ITO in ITA No. 1106/JP/2018,  ACIT Vs Subhodh Mennon in ITA No. 676/Mum/2015,  Sajjanraj Mehta Vs ITO in ITA No. 56/Mum/2021,  Sanjay Kumar Ramanbhai Patel Vs ITO in ITA no. 374 /Srt/2018.

for the revenue supported the order of lower authorities. The assessing officer

in the assessment order recorded that assessee has paid only ₹ 5,000/-, that

too in cash, at the time of agreement. No other payment, allegedly paid by

the assessee to seller is recorded by assessing officer.

through the orders of lower authorities carefully. We have also deliberated on

various case laws relied by ld AR of the assessee. We find that assessing

officer while passing the assessment order recorded that assessee purchased

certain immovable property at survey No. 12/5 & 12/8, at Sirgaon, Badlapur,

Taluka-Ambernath Maharashtra. The purchase consideration as per sale date

is ₹ 1.00 crore, however, the stamp valuation authority (SVA) valued of the

said property at ₹ 1.44 crore at the time of registration of transaction. On

show cause notice, the assessee filed his reply and claimed benefit of First

and Second Proviso to section 56(2) (vii). The assessing officer has not

recorded the actual contents of reply and evidences furnished by assessee.

The assessing officer simply recorded that at the time of execution of

agreement of sale on 29thJanuary 2011, the assessee paid Rs. 5,000/- in

cash. It was also recorded that assessee purchased immovable property

jointly with Praveen Arvind Apte on 23rd February 2018 for a consideration of

₹ 1.00 crore, which is less than the value determined by Stamp Valuation

Authority at ₹ 1.44 crore. The assessee is having share of 50.10%,

accordingly addition of Rs. 22,37,967/- was made in the assessment order dated 25thMarch 2021. We find that before learned Commissioner (Appeals)

the assessee reiterated his submission that substantial part payment of

consideration was paid either at the time of execution of agreement or during

the period much prior to execution of final sale deed. The assessee also

stated that as per the Stamp Duty Valuation Authority, the value of property

at the time of execution of agreement of sale was only of ₹ 58,24,800/-. The

assessee agreed to purchase such property at the rate of ₹ 1.00 crore which

was more than the value of Stamp Valuation Authority prevailing at that time.

The learned Commissioner (Appeals) despite recording all such submission

and the details of various payments made through banking channel,

confirmed the action of assessing officer by holding that payment of ₹ 5,000/-

was made other than by way of account pay cheque at the time of entering

into agreement on 29th January 2011. We find that landed Commissioner

(Appeals) ignored that substantial payment was made by assessee either in

2011, 2012 or in 2013 & 2014 in pursuance of agreement. We find that

assessee has placed on record bank statement reflecting payments made in

November 2011 as well as December 2011 at ₹ 2,50,000/- and Rs.3,00,000/-

respectively. The assessee has also shown payments made through account

pay cheque in 2012, 2013 and 2015. Thus, in view of aforesaid factual

discussion we find that when the assessee paid substantial part payment in

pursuance of agreement by way of banking channel, hence the assessee is

eligible to the benefit of First & Second Proviso to section 56(2)(vii) of the Act. In the result, the substantial ground of appeal raised by the assessee is

allowed.

Order was pronounced on 09/06/2026.

Sd/- Sd/- MAKARAND VASANT MAHADEOKAR PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER

MUMBAI, Dated: 09/06/2026 Biswajit Copy of the order forwarded to:

(1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); By order (4) The DR, ITAT, Mumbai; and (5) Guard file.

Assistant Registrar ITAT, Mumbai