M/S SURAJ & ASSOCIATES,MUMBAI vs. ACIT 31(3) / NOW ACIT 41(4)(1), MUMBAI, MUMBAI

ITA 408/MUM/2026Status: DisposedITAT Mumbai28 September 2026AY 2015-1616 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee's claim that the case is covered by the Third and Fourth Provisos to Section 43CA was not substantiated. The Tribunal noted that the sale agreements for Flat No. 101, 102 and Shop No. 1 were registered on 13.08.2015, and a rectification deed dated 08.12.2015 substituted the value to match the 2012 resolution. The Tribunal found that the assessee failed to provide sufficient evidence to prove that payments were made by the partners before the agreement date of 13.08.2015, other than cash, as required by Section 43CA. The capital account debits in 2014 were not considered sufficient proof of prior payments or allotment. Therefore, the stamp duty value adopted by the AO for the year 2015 was upheld. The addition of Rs. 1,56,11,820/- made by the AO under Section 43CA was confirmed. No issue was expressly left undecided.

What were the facts?

The assessee, M/s. Suraj & Associates, filed its return for Assessment Year (AY) 2015-16. The case was selected for scrutiny. The Assessing Officer (AO) observed that out of 22 flats and 2 shops sold, 12 flats and 2 shops had an agreement value less than the stamp duty valuation. The AO proposed to add the difference of Rs. 1,56,11,820/- under Section 43CA of the Income Tax Act, 1961. The assessee contended that certain flats and shops were allotted to partners in October 2012 at pre-agreed prices, and payments were made via account payee cheques/RTGS. The AO disagreed, noting that sale agreements were registered in FY 2015-16 and rectification deeds altered values to match the 2012 resolution. The Commissioner of Income Tax (Appeals) - NFAC confirmed the addition.

What were the issues?

1. Whether the addition of Rs. 1,56,11,820/- under Section 43CA of the Income Tax Act, 1961, on account of the difference between the agreement value and the stamp duty determined value for immovable property held in stock-in-trade, is justified? Assessee's contentions: The assessee argued that the case is covered by the Third and Fourth Provisos to Section 43CA. They claimed that Flat No. 101, 102 and Shop No. 1 and 2 were agreed to be purchased by partners in October 2012 at a pre-agreed price, with payments made via account payee cheques/RTGS. They relied on their capital accounts and bank statements as evidence. The assessee also contended that the stamp duty value prevailing in FY 2012-13 should be adopted, as the agreements were made then, despite registration in FY 2015-16. They cited the resolution dated 20th October 2012. Revenue's contentions: The revenue, through the AO and CIT(A), contended that the sale agreements were registered in FY 2015-16, and no payments were received before FY 2014-15. The AO noted rectification deeds that substituted values to match the 2012 resolution. The CIT(A) found that the assessee failed to provide proof of payments made before the agreement date (13.08.2015) other than cash, and that the firm should have booked the sale in the partner's name, which it failed to do. The stamp duty value adopted by the AO for 2015 was considered correct.

Which sections of the Income-tax Act were involved?

Section 43CA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “F” BENCH; MUMBAI

Hearing: 02.07.2026Pronounced: 28.09.2026

PER VIKRAM SINGH YADAV, A.M :

This is an appeal filed by the Assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [‘Ld.CIT(A)’], dated 21.11.2025, pertaining to Assessment Year (AY) 2015-16, wherein the Assessee has taken the following grounds of appeal:

“1. The order passed by the learned CIT-Appeals, NFAC, Delhi is erroneous, bad in law, unjustified, unwarranted, passed with utterly prejudiced mind and against the principles of natural justice.

2.

The learned CIT-Appeals erred in sustaining an addition of Rs. 1,56,11,820/- u/s 43CA of the Income Tax Act, 1961 on account of differen

The order continues below.

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