ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-19(1), NEW DELHI vs. MUKESH SHARMA, GAUTAM BUDDHA NAGAR

INCOME TAX APPELLATE TRIBUNAL, DELHI BENCHES, NEW DELHI BENCH: B BEFORE MS. MADHUMITA ROY, JUDICIAL MEMBER AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER ITA 4645/DEL/2025 (िनधा�रण वष�/Assessment Year: 2020-21) ASSISTANT COMMISSIONER OF MUKESH SHARMA INCOME TAX, CIRCLE-19(1) 804 MAHAGUN MORPHEUS, ROOM NO.221, 2ND FLOOR CR PLOT NO E-4, SECTOR-50, BUILDING, IP ESTATE, NEW NOIDA H.O, GAUTAM Vs. DELHI-110002, DELHI BUDDHA NAGAR, UP-201301 GAUTAM BUDH NAGAR- 201301, UTTAR PRADESH अपीलाथ� Appellant ��थ� Respondent

Permanent Account Number of Assessee: AWKPS5873R

अपीलाथ� �ारा/Appellant represented by: Sh. Rajesh Kumar Dhaneshta, Sr. DR (virtual) ��थ� �ारा/Respondent represented by: Sh. Vibhu Gupta, Adv & Sh. Pranav Yadav, Adv सुनवाई की तारीख / Date of conclusion of hearing: 19-08-2026 घोषणा की तारीख / Date of pronouncement: 13-11-2026 आदेश / ORDER PER SH.KRINWANT SAHAY, ACCOUNTANT MEMBER : This appeal is filed by the Department against the order passed by the Ld. CIT(A)/NFAC dated 29-05-2025 for the Assessment Year 2020-21. Grounds of appeal are as under :-

“1. Whether on the facts and circumstances of the case and in law, the Ld. CTT(A) has erred in treating the transaction of Agreement to Sell dated 31/08/2016 as a "transfer" within the meaning of Section 2(47) of the Income Tax Act, 1961.

“The assessee acquired the leasehold rights in the property bearing address Plot No. 60, Pocket A, Sector 20, Yamuna Expressway Industrial Development Authority (YEIDA) on vide agreement to sell dated 31.08.2016 from Mr. Rakesh Kumar Bansal to whom the said plot was allotted by YEIDA in the year 2009. In this regard, the assessee is hereby submitting the date wise events occurred for the purchase of the said plot, which is summarized as under:

The AO has made the addition of the difference of the stamp duty value and the purchase consideration in the year under consideration i.e. AY 2020-21, despite the fact that the said property was purchased in the FY 2016-17 for which the purchase consideration was paid to Mr. Rakesh Kumar Bansal in that year only. Further, the balance installment to YEIDA was paid till the end of March 2018, after which a confirmation letter was issued by YEIDA dated 28.03.2018 mentioning the transfer letter of rights of allotment in the said plot. In the year under consideration, i.e. FY 2019-20, only a lease deed was executed with the YEIDA for the purpose of payment of stamp duty. The appellant has given submissions on the following issues: i. Leasehold rights acquired in the FY 2016-17 and not in FY 2019-20 ii. Section 56(2)(x) came into force from Finance Act 2017 i.e. from AY 2018-19. iii. Leasehold rights do not come under the purview of section 56(2)(x) iv. The consideration price determined by YEIDA being a Government authority cannot be challenged by another Government authority v. Valuation report not challenged by the AO and the same was also not referred to the DVO for valuation purposes. vi. Stamp Duty Value on the date of Agreement to be taken The appellant further submits as under: The immovable property, Plot No. 60, Pocket A, Sector 20, Yamuna Expressway Industrial Development Authority, was originally allotted to Mr. Rakesh Kumar Bansal by the Yamuna Expressway Industrial Development Authority (hereinafter referred to as "YEIDA) vide allotment letter dated 20.10.2009. The terms of allotment provided that the leasehold rights in the property were to be granted upon completion of payments in 16 half-yearly instalments, payable over a period of eight (8) years, i.e., up to December 2017. The assessee acquired leasehold rights in the immovable property bearing address Plot No. 60, Pocket A, Sector Development Authority (YEIDA) vide Agreement to sell dated 31.08.2016 i.e. FY 20, Yamuna Expressway Industrial 2016-17. The said rights were acquired from the original allottee, Mr. Rakesh Kumar Bansal, for a total consideration of Rs. 2,43,20,000/-, out of which Rs. 1,55,76,810/-was paid to Mr. Rakesh Kumar Bansal as per the following dates through banking channels. Further, as regards to the balance amount of Rs. 87,43,190/-, the same was agreed to be deposited as balance instalments of the YEIDA as per the payment plan. Pursuant to the acquisition of leasehold rights, the assessee continued to make payment of the remaining instalments directly to YEIDA as per the terms and conditions set out in the original allotment letter. Upon completion of all requisite payments, YEIDA issued a confirmation letter dated 28.03.2018, formally acknowledging the transfer of leasehold rights in favour of the assessee. Subsequently, a Lease Deed was executed on 04.07.2019 between YEIDA and the assessee.

The provisions of the Act are as under: 56. (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 :- (8) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum; (b) any immovable property,- (A) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; (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:- () the amount of fifty thousand rupees; and (ii) the amount equal to [ten] per cent of the consideration:] The above clause (x) was inserted by Finance Act, 2017 and is applicable to the receipt of property on or after 01st April 2017. The assessee had purchased the lease-hold rights on 31.08.2016 from Mr. Rakesh Kumar Bansal. The Plot No. 60, Pocket A, Sector 20, Yamuna Expressway Industrial Development Authority, was originally allotted to Mr. Rakesh Bansal by the YEIDA vide allotment letter dated 20.10.2009. The terms of allotment provided that the leasehold rights in the subject property were to be granted upon completion of payments in 16 half-yearly instalments, payable over a period of eight (8) years, i.e., up to December 2017. Upon execution of the Agreement to Sell dated 31.08.2016, the assessee was sübstituted in place of the original allottee and became vested with all the rights, responsibilities, and obligations arising from the original allotment issued by YEIDA. From that point forward, the assessee assumed the status of the allottee under the said scheme and continued to make payments directly to YEIDA as per the original schedule. The transaction relating to the acquisition of leasehold rights by the assessee was concluded prior to 1st April 2017. Accordingly, the transaction falls outside the scope of Section 56(2)(x) of the Act, and the provisions of the said section cannot be invoked in respect of this acquisition.

Only the leasehold rights have been transferred to the assessee. The provisions of clause (x) to sub-section (2) of section 56 of the Act, applies to purchase of immoveable property at a consideration which is less than the stamp duty value of such property. Now, as per the Explanation to this clause, the meaning of the term 'property' shall have the same meaning as assigned in Explanation to clause (vii). The above explanation clearly defines the term property as immoveable property being land or building or both. It specifically states that the land or building or both can only be regarded as the immoveable property for the purpose of section 56(2)(x) and it nowhere includes 'leasehold rights' under the term immoveable property. This clearly means that the provisions of section 56(2)(x) are not applicable to the acquisition of leasehold rights in the land and building. In connection with the above, reference is invited to the following decision: 1. Britannia Industries Limited Versus Principal Commissioner Of Income Tax-1, Kolkata, [2024] 161 taxmann.com 705 (Kolkata - Trib.) 18. We have perused the provisions of section 56(2)(x) of the Act and note that the provisions of section are not applicable to acquisition of leasehold rights in land and building and therefore, the direction of the Id. PCIT requiring the Id. Assessing Officer to examine the transactions of acquisition in light of section 56(2)(x) of the Act is ex-facie untenable and contrary to the provisions of law. We observe that the provisions of section 56(2)(x) of the Act are applicable in a case where transfer of land and building or both, but not to the leasehold rights. The case of the assessee finds support from the decision of the Hon'ble Bombay High Court in the case of Green Fields Hotels & Estates (supra), wherein a ratio has been laid down that in respect of leasehold rights, the provisions of section 56(2)(x) of the Act are not applicable. We note that the similar issue has been laid down by the Coordinate Bench of ITAT in the case of Tejinder Singh (supra); Atul G. Puranik (supra), Soumya Sathyan (supra) and various decisions as relied and referred by the assessee during the course of hearing by the Id. A.R and noted above. of jurisdiction by the Id. PCIT is unsustainable in the eyes of la Therefore, the exercise of junsdictio Shri Shiv Kumar Soni Versus the Acit Circle-5 Jaipur, ITA No. 183/JP/2020 dated 18.10.2022 2. The Bench has gone through the series of the case laws relied upon by the assessee. However, it is noted that the ITAT Pune Bench in the case of Bhavna Shashikant Ghone vs ITO Ward 12(2), Pune has very explicitly observed as under.- "4. The first and foremost issue that arise for our apt adjudication in this backdrop herein is as whether such leasehold rights are covered under the statutory definition of "any immovable property" u/s 56(2)(vii)(b) as defined in Explanation (d) (1) as "being land or building or both". We note that the legislature has used an identical express in Section 50C(1) of the Act wherein various judicial precedents (2017) 77 taxmann.com 308 (Bom), CIT vs Greenfields Hotels and Estates Pvt. Ltd. (2015), 55 taxmann.com (2017) (Pune) Kancast Pvt. Ltd. vs ITO, (2011) 4 SCC 36 (SC) GVK Industries Ltd. vs ITO and 2020-TIOL-307-Kolkata hold that such a lease hold right does not come under either of the twin specified categories of "land or building or both" as the case may be. We adopt the very reasoning herein as well to conclude that the learned lower authorities have erred in law and on facts in invoking section 56(2)((vii) (b) addition qua assessee's acquisition of leasehold rights in issue. The impugned addition stands deleted in above terms, Ordered accordingly. 5. This assessee's appeal is allowed in above terms. In view of the decision of Coordinate Bench of ITAT Pune in the case of Bhavna Shashikant Ghone, we are of the view that Section 56(2)((vii)(b) cannot be applied in assessee's case. It is also noteworthy to mention that letter dated 6-01-2014 issued by RIICO in favour of M/s. Unique Impex is clear evidence that the assessee only received lease hold right for 99 years. Hence, in view of above deliberations and the case laws mentioned hereinabove, the Bench does not concur with the view of the Id CIT(A) and the addition sustained by the Id. CIT(A) is directed to be deleted. Thus the solitary ground of the assessee is allowed. 3.0 In the result, the appeal filed by the assessee is allowed. 3.Khazan Singh Anand, Vs. ITO, Ward-40(5), New Delhi ITA No. 5837/Del/2019 dtd 02/12/2020 9. Ground No. 2 and 3 of the appeal are on the merits of the addition. The fact shows that DDA allotted to the appellant the leasehold right of a plot of land at Plot No. 25 Pocket No. 3A, Sector 28, Rohini, New Delhi as per allotment letter dated 27.11.2014. The assessee took the possession of the above plot on 03.05.2015. Above leasehold right were transferred by the assessee as per registered agreement to sale to one Smt. Deepika Kapoor. The claim of the assessee is that provisions of section 50C applies only to the transfer of land and Building or both but it does not extend to the transfer of leasehold right. According to the assessee leasehold rights are neither land or building or both. For this proposition the assessee relied upon the decision of the coordinate bench in case of Noida Cyber Park Pvt. Ltd ITA No. 165/Del/2020 dated 12.10.2020. However, on careful perusal of the fact it is apparent that the issue is squarely covered in favour of the assessee by the decision of the Hon'ble Bombay High Court in 389 ITR 68 CIT Vs. Greenfield Hotels and Estates Pvt. Ltd wherein, the Hon'ble High Court has upheld the order of the coordinate bench holding that provisions of section 50C will not be applicable while computing the capital gain on transfer of leasehold rights in land and plot. The issue is also covered in favour of the assessee by the decision of the coordinate bench in case of Rit Suppliers Pvt. Ltd Vs. ITO 182 ITD 227 (Kol), Pyaribai K Jain Vs. CIT 175 ITD 17 (Mum), Kencast Pvt. Ltd Vs. ITO 68 SOT 110(Pune). In view of the above binding precedents we allow ground No. 2 of the appeal which challenges that provision of section 50C of the Act do not apply on transfer of leasehold right in plot of land and direct the ld AO to delete the addition of Rs.2210,000/- made u/s.50C of the act. Accordingly, ground No.2 of the appeal is allowed.”

Order pronounced in the open court on 13.11.2026.

Sd/- Sd/- [MADHUMITA ROY] [KRINWANT SAHAY] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 13.11.2026 NEHA, Sr.P.S.* Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi