DILIP B VORA,MUMBAI vs. ITO WARD 19(1)(1) MUMBAI, MUMBAI

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ITA 3137/MUM/2026Status: DisposedITAT Mumbai28 September 2026AY 2018-1911 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the facts were materially identical to the case of Ketan Himatlal Mehta v. DCIT. The Tribunal observed that the assessee was in possession of the property since FY 2008-2009 and had offered rental income. The consideration was settled through drawings from capital, evidenced by the Deed of Declaration. The Tribunal found that the assessee had furnished various documents before the CIT(A) which did not appear to have been considered in the impugned order, and these were not forwarded to the AO for a remand report. Therefore, the Tribunal restored the matter to the file of the AO for the limited purpose of examining and verifying the veracity of these documents. The legal principle would remain in parity with the decision in Ketan Himatlal Mehta. The AO was directed to determine the applicability of Section 56(2)(x)(b) by adopting the Stamp Duty value prevailing as on the date of execution of the Deed of Declaration, subject to verification of the additional evidence. The addition made by the AO was set aside and the issue was restored to the AO. The remaining grounds were rendered academic.

What were the facts?

The assessee, Dilip B Vora, appealed against the order of the CIT(A) for AY 2018-19, which confirmed an addition of Rs. 70,31,897/- made by the AO under Section 56(2)(x). This addition represented the assessee's 30% share in the difference between the stamp duty value and the agreement value of a property, Unit No A/002 in Kemp Plaza. The assessee contended that the unit was received prior to April 1, 2017, through a Deed of Declaration dated 13.02.2008 from his partnership firm, M/s West End Enterprises, with a consideration of Rs. 17,33,297/-. The firm and the assessee had offered the sale and rental income from this unit for AY 2008-09 and AY 2009-10 onwards, respectively, and the unit was also disclosed in wealth tax returns. A sale agreement was later registered on 08.12.2017, which the assessee argued was merely a formality ratifying the earlier deed.

What were the issues?

1. Whether the provisions of Section 56(2)(x) of the Income Tax Act, 1961, are attracted when the immovable property (Unit No A/002) was received by the assessee prior to April 1, 2017, evidenced by a Deed of Declaration dated 13.02.2008, and not on the date of the subsequent sale agreement registration on 08.12.2017. Assessee's Contention: Section 56(2)(x) is not attracted as the unit was received in 2008, prior to the relevant date. The firm and the assessee had already offered income from the sale and rental of the unit for AY 2008-09 and AY 2009-10 onwards, respectively, and it was disclosed in wealth tax returns. The sale agreement in AY 2018-19 was a formality. Relied on Ketan Himatlal Mehta vs. DCIT. Revenue's Contention: The Ld. DR vehemently supported the orders of the Revenue Authorities. 2. Without prejudice, if Section 56(2)(x) is attracted, whether the stamp valuation should be adopted as on the date of the Deed of Declaration (13.02.2008) instead of the date of registration of the sale agreement (08.12.2017). Assessee's Contention: The addition should be made on the basis of stamp valuation on the date of the Deed of Declaration. Relied on Ketan Himatlal Mehta vs. DCIT. Revenue's Contention: Not recorded. 3. Without prejudice, whether the matter should be referred to the DVO for valuation. Assessee's Contention: The AO should have referred the matter to the DVO for valuation. Revenue's Contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 56(2)(x),Section 143(3),Section 148A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: SHRI AMIT SHUKLA, JM & SHRI ARUN KHODPIA, AM

For Appellant: Shri Rahul H. Hakani
For Respondent: Shri Azhar Kabir, Sr. DR
Hearing: 28.09.2026

आयकर अपीलीय अिधकरण �ायपीठ मुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JM & SHRI ARUN KHODPIA, AM I.T.A. No. 3137/Mum/2026 (Assessment Year: 2018-19) Dilip B Vora ITO Ward 19(1)(1), Mumbai 123/124, Sona shopping centre, Piramal Chambers, Lalbaugh Parel, Vs. Trikamdas Road, Kandivali Mumbai-400012 (West), Mumbai-400067 PAN: AAAPV4643A Assessee- अपीलाथ� / Appellant Revenue-��थ�/ Respondent :

Assessee by : Shri Rahul H. Hakani Revenue by : Shri Azhar Kabir, Sr. DR : 06.07.2026 Date of Hearing : 28.09.2026 Date of Pronouncement

O R D E R Per Arun Khodpia, AM: This appeal is preferred by the assessee, directed against the order of the Commissioner of Income Tax Appeals, National Faceless Appeal Centre (NFAC), Delhi [in short, “the Ld. CIT(A)”], dated 13.01.2026 for the Assessment Year (AY) 2018-19, arises from the assessment order under section 143(3) of the Income Tax Act, 1961 [in short, “the Act”] dated 25.02.2021, passed by National e-Assessment Centre, Delhi [in short, “the Ld. AO”].

2. The grounds of appeal raised by the assessee are as under: “1) The Learned CIT(A)/NFAC erred in confirming the order of AO making the addition of Rs 70,31,897/- u/s 56(2)(x) being Assessee's 30% share in the difference between the market/stamp value of Rs 2,51,72,954/- and the agreement value of Rs 17,33,297/- of Unit No A/002 on the ground floor of the building Kemp Plaza without appreciating that the provisions of Section 56(2)(x) are not attracted as said unit was received by the Assessee prior to April 1, 2017 as Assessee through his partnership firm M/s West End Enterprises had constructed said unit and same was received by him as drawings from the partnership firm evidenced by the Deed of declaration dated 13/2/2008 and hence the addition of Rs 70,31,897/- may be deleted. 1.1) The Learned CIT(A)/NFAC failed to appreciate that the firm as well as Assessee have shown sale of said unit in AY 2008-2009 and the Assessee had let out said unit from AY 2009-2010 to a bank and the income from house property was duly offered to tax by the assessee and said unit was also disclosed by the Assessee in his wealth tax return and thus the registration of Sale agreement of said unit between the Assessee and the firm in AY 2018-2019 was only a formality and hence the addition of Rs 70,31,897/-deserves to be deleted. 2) Without prejudice to above, the learned CIT(A)/NFAC failed to appreciate that the Ld AO erred in making the addition of Rs 70,31,897/- u/s 56(2)(x) by adopting the stamp valuation on the date of registration instead of adopting the stamp valuation on the date of deed of declaration and hence addition if any u/s 56(2)(x) may be made on the basis of stamp valuation on the date of deed of declaration. 3) Without prejudice to above, the Ld CIT(A)/NFAC failed to appreciate that in the facts and circumstances of the case, the Ld AO should have referred the matter to DVO for valuation and thus, direction may be given to AO to refer the matter to DVO. 4) The Appellant craves leave to add, amend, alter, delete any of the above grounds of appeal.”

3.

The Ld. Counsel for the assessee submitted that the addition under Section 56(2)(x) of the Act was made on account of the difference between the Stamp Duty value and the agreement value. The assessee being a 30% shareholder in the property, therefore the difference of Rs. 2,34,39,657/- was added to the extent of 30% for Rs. 70,31,897/-, in the hands of the assessee. It is submitted that the assessee, his son Ankit Vora and wife Naina Vora are partner in West End Enterprises along with Mehta Family. A commercial building in the name of

Kemp Plaza was complete in financial year 2007-08 by M/s. West End Enterprises. Further, by way of a Deed of Declaration dated 13.02.2008 executed on a notarized stamp paper, the assessee, his wife and son have become entitled to unit A-002 and the consideration towards the said unit was settled through drawings from capital, the total consideration was Rs.17,33,297/- and the assessee’s share at 30% was Rs.5,19,989/-. The other partners became entitled to Unit No. A-003. The transaction of purchase and sale was materialized on 13.02.2008, which is further substantiated by the Ld. Counsel submitting that the income from sale of such units was shown by the firm in their return of income for AY 2008-09. Copy of return has been furnished before us at page nos. 19 to 84 of the assessee’s paper book.

4.

It is submitted that the firm was subjected to scrutiny assessment u/s 143(3) for the said year, copy of assessment order furnished at page nos. 291 to 296 of the assessee’s paper book. Further it is submitted that M/s. West End Enterprises had debited an amount of Rs.12,55,117/- as withdrawal of stock which includes unit A-002 for Rs.5,19,989/- + unit A-104 for Rs.7,35,128/-. The copy of capital account of assessee in the accounts of form has been placed at page no.76 of the assessee’s paper book. It is also submitted that, once the property was received by the assessee, the same is shown in the wealth tax return of the assessee, copy of the same has been furnished at page nos.297 to 300 of the assessee’s paper book. It is contended that the assessee along with co-owners had let out the property to Bank of Baroda vide registered lease deed placed at 3

page nos.85 to 98 of the paper book and, accordingly, the rental income was duly offered to tax by the assessee in his returns from 2008-09 onwards till 2018-19.

5.

Further, the registration of sale agreement was entered into on 08.12.2017 between the West End Enterprises and the assessee along with other co-owners, copy attached in the paper book. It is submitted that the agreement of sale was basically ratifying the Deed of Declaration dated 13.02.2008, as it clearly made reference to the same and also the consideration remains the same. It is further said that in the cases of assessee’s son, wherein after considering the deed of declaration accounts of firm, the registered lease deed, the Ld. AO dropped the re-opening u/s 148A(d) on the ground of section 56(2)(x), therefore under identical facts and circumstances, the addition u/s 56(2)(x) in the case of assessee would not sustain.

6.

Further, the Ld. Counsel placed his reliance on the decision of Ketan Himatlal Mehta vs. DCIT in ITA No. 2497/Mum/2024 for AY 2018-19 dated 10.07.2025, wherein the partner of assessee, in other partnership firm, namely, Sunket Associates had also withdrawn stock by recording Deed of Declaration and the agreement for sale was registered, subsequently. Hon’ble ITAT remanded the matter to the Ld. AO to adopt the market rate as on the date of Deed of Declaration. Further the Ld. AR relied upon various decisions stating that the law should be adopted identically in case of co-owners and, therefore, the addition made by Ld. AO u/s 56(2)(x) is liable to be deleted.

7. Per contra, Ld. DR vehemently supported the orders of Revenue Authorities.

8.

We have considered the rival submissions, perused the material available on record and carefully examined the judicial pronouncements relied upon by the assessee. We find that the facts and circumstances of the case of the assessee are materially identical to those obtaining in the case of Ketan Himatlal Mehta v. DCIT (supra), wherein the Tribunal, while adjudicating the identical issue, recorded the following relevant findings: “5.5. We have given thoughtful consideration to the rival submissions and have perused the material on record. 5.6. Section 56(2)(x) of the Act provides that in case an immovable property is received for consideration that is less than the stamp duty value; and the difference between the stamp duty value and consideration exceeds the specified amount, then suchdifference would be taxable as 'Income from Other Sources' in the hands of recipient of such immovable property. However, the Proviso to Section 56(2)(x)(b) of the Act applies in a case where there is difference between the date of agreement between the parties to transfer/sell the immovable property and date of the actual registration of sale deed and the same reads as under: "Section 56 (1) xx (2) In particular, and without prejudice to the generality of the provisions of sub- section (1), the following incomes, shall be chargeable to income-tax under the head "Income from other sources, namely:- (x) where any person receives, in any previous year, from any person or persons on or after the 1st day of April, 2017- (a) xx (b) any immovable property- (A) Xx (B) for a consideration, the stamp duty value of such property as exceeds such consideration, if the amount of such excess is more than the higher of the following amounts, namely: 5 (i) the amount of fifty thousand rupees; and (ii) the amount equal to five per cent of the consideration Provided that where the date of the agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of the agreement may be taken for the purposes of this sub-clause: Provided further that the provisions of the first proviso shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by way of an account payee cheque or an account payee bank draft or by use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed, on or before the date of agreement for transfer of such immovable property: Provided also that where the stamp duty value of immovable property is disputed by the assessee on grounds mentioned in sub-section (2) of section 50C, the Assessing Officer may refer the valuation of such property to a Valuation Officer, and the provisions of section 50C and sub-section (15) of section 155 shall, as far as may be, apply in relation to the stamp duty value of such property for the purpose of this sub-clause as they apply for valuation of capital asset under those sections;" (Emphasis Supplied) Thus, as per the above Provisos to Section 56(2)(x)(b) of the Act for the purpose of applying the provisions contained in the said Section 56(2)(x)(b), the stamp duty value on the date of agreement between the parties is to be considered provided (a) there is an agreement fixing the consideration for transfer/sale of immovable property and (b) whole/part of consideration has been paid through banking channel by way of account payee cheque, an account payee bank draft or use of electronic clearing system. 5.7. On perusal of record, we find that the Assessing Officer had information that the Assessee had purchased 2 properties during the relevant previous year. During the course of hearing before the Tribunal the Assessee was directed to place on record copy of agreements showing purchase of the two properties. On perusal of the same we find that the two Agreements for Sale were registered on 23/03/2018. By way of first Agreement for Sale the Assessee had agreed to purchase Unit 1A (having carpet area admeasuring 13.90 sq. mtrs.) on the Ground Floor of building known as Kemp Plaza for consideration of INR.4,14,314/-. The aforesaid Agreement for Sale made reference to Declaration Deed, dated 25/12/2008. Similarly, by way of second Agreement for Sale the Assessee had agreed to purchase Unit 18 (having carpet area admeasuring 42.74 sq. mtrs.) on the Ground Floor of building known as KANE Plaza for consideration of INR. 12,70,563/-. This Agreement for Sale also made reference to Declaration Deed, dated 25/12/2008. On perusal of Declaration Deed, dated 25/12/2008 (Placed at Page 81 to 93 of the Paper Book), we find that the same is a registered document whereby the partners of the partnership firm (namely, Sunket Associates) has declared that the partners of the said partnership firm (including the Assessee) have been allocated Units by way of withdrawal of partnership assets held as stock-in-trade. The declaration clearly states that the partners. were in exclusive possession of their respective units allocated to them by way of the aforesaid Declaration Deed. Further, as per the said Declaration Deed the Assessee was 6

allocated premise No.001 (Carpet area 620 sq. ft.) at Ground Floor of project situated at CTS No.1406/3/1 and 1406/3/2 of Village Malad. (South), Taluka Borivali, Mumbai City, Mumbai Suburban. On going through the audited financial statements of the partnership firm Sunket Associates for the Assessment Year 2009-2010 we find that a withdrawal of INR. 16,84,877/- has been shown in the Capital Account of the Assessee (as on 30/03/2009) with the narration 'To Withdrawal of KP'. We find that corresponding disclosure has been made by the Assessee in the financial statements for the Assessment Year 2009-2010. In the Balance Sheet of the Assessee as on 30/03/2009 aggregate properties of INR.77,41,544/- have been disclosed with its break up given in Annexure E stating that the Assessee holds property KANE Plaza 001 at INR.16,84,877/-. Thus, the financial statements corroborate the declaration made in the Declaration Deed, dated 25/12/2008. From the aforesaid documents it become clear that the Assessee had receive the property bearing No.001 at Ground Floor of KANE Plaza during the financial year 2008-2009 for agreed consideration of INR. 16,84,877/-. The two Agreements to Sale registered during the relevant previous year pertained to the aforesaid property. On perusal of the said agreements we find that the aggregate area of Property 1A & 18 at Ground Floor of KANE Plaza and the property details correspond to the aforesaid property received by the Assessee by way of Declaration Deed, dated 25/12/2008. It is not disputed by the Revenue that the Assessee was in possession of the property under consideration since financial year 2008-2009 and that the Assessee had also offered to tax the rental income earned therefrom. There was clearly an agreement between the Assessee and the partnership firm (Sunket Associates) fixing the consideration for transfer/sale of immovable property for INR.16,84,877/-. The entire consideration was paid by way of adjustment entry passed in the books of account as on the date of Declaration Deed whereby the withdrawal of capital by the Assessee was shown from the partnership firm by way of allocation of units/property held by the partnership firm as stock in trade. It is not even the case of the Revenue that the Assessee had introduced capital in the partnership firm by way of cash or modes other than the modes prescribed. On perusal of the Capital Account of the Assessee as on 31/03/2009, we find that the capital of INR.10,00,000/- was introduced by the Assessee through banking channel and the same was sufficient for allocation of part payment for acquisition of immovable Property 1A & 1B. Accordingly, in view of the aforesaid, we direct the Assessing Officer to adopt the stamp duty value as on the date of the Declaration Deed (i.e., 25/12/2008) for the purpose of determining the applicability of Section 56(2)(x)(b) read with the provisos thereto and addition, if any, under the said section. In terms of the aforesaid directions, addition of INR.1,35,17,669/- made by the Assessing Officer is deleted and Ground No.1 raised by the Assessee are allowed and Ground No.2 is dismissed as having been rendered infructuous.” 9. Further, in an identical set of circumstances, the case of the assessee’s son, Shri Ankit Dilip Vora, was also reopened by issuance of notice under section 148A(b) of the Act. However, upon consideration of the submissions furnished by the assessee, the proceedings were ultimately dropped, the material on record

having been considered insufficient to warrant issuance of notice under section 148 of the Act.

The distinction between the cases relied upon by the assessee and the facts obtaining in the present case is that, as certified by the assessee in Paper Book No. 1, various documents were furnished before the Ld. CIT(A), including the Wealth-tax Return, which was also stated to have been furnished before the Ld. AO. The documents so furnished and assessee’s certification on the index of the paper book, are enumerated hereunder:

Sr Particulars Pg Nos No Copy of Acknowledgement of return of income, Computation of 1-14 1 income and Audited Accounts for AY 2018-2019 Copy of deed/declaration dated 13/02/2008 (capital withdrawal from 15-18 2 West End Enterprises for Unit No A/002, Kemps Plaza) Copy of return of income and Audited Financials of West End 19-84 3 Enterprises for AY 2008-2009 and sales details for Unit No A/002 Copy of Registered Lease Deed dated 06/05/2008 between Assessee 85-98 4 and Bank of Baroda w.r.t Unit No A/002 Copy of computation of income and balance sheet of Assessee for AY 5 2009-2010 to AY 2018-2019 showing rental income from Bank of 99-202 Baroda Copy of Registered Agreement for sale dated 08/12/2017 between West 6 203-278 End Enterprises, Assessee, and co-owners w.r.t Unit No A/002 7 Copy of submission before AO dated 17/2/2021 (Without Annexures) 279-282 8 Copy of Written Submission before CIT(A) (Without Annexures) 283-290 Copy of Assessment Order u/s 143(3) for AY 2008-2009 in the case of 9 291-296 West End Enterprises Sr Particulars Pg Nos No 10 Copy of wealth tax return of the Assessee showing Unit No A/002 297-300

This is to certify that documents at Sr No. 1 to 9 are filed before CIT(A) and Sr. No. 10 is filed before AO. We request the Hon'ble members to grant us the permission to produce the same.

10.

From the aforesaid certified index forming part of the paper book, it is evident that the assessee had furnished various additional documents/evidence before the Ld. CIT(A), which do not appear to have been considered or referred to in the impugned order. Further, such additional evidence was not forwarded to the Ld. AO for examination and submission of a remand report. In these circumstances, and having regard to the nature and relevance of the documents so furnished, we deem it appropriate to restore the matter to the file of the Ld. AO for the limited purpose of examining and verifying the veracity, genuineness and evidentiary value of the aforesaid documents.

At the same time, the legal principle governing the issue shall remain in parity with the decision of the Tribunal in the case of Ketan Himatlal Mehta v. DCIT (supra). Accordingly, the order of the Ld. CIT(A) is set aside and the issue is restored to the file of the Ld. AO with a direction to determine the applicability of section 56(2)(x)(b) of the Act, read with the provisos thereto, by adopting the Stamp Duty value prevailing as on the date of execution of the Deed of Declaration, subject to verification of the additional evidence furnished by the

assessee before the Ld. CIT(A). Needless to state, the Ld. AO shall afford adequate opportunity of being heard to the assessee before passing the order in accordance with law.

11.

Since the substantive ground raised by the assessee has been disposed of by restoring the matter to the file of the Ld. AO in terms of the directions contained hereinabove, the remaining ground raised by the assessee has become academic and, consequently, does not call for separate adjudication.

12.

In result, the appeal of assessee stands allowed for statistical purposes, in above terms.

Order pronounced in the open court on 28-09-2026.

Sd/- Sd/- (AMIT SHUKLA) (ARUN KHODPIA) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, Dated : 28-09-2026. Ankit K., Sr. PS

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT

BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai

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