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Facts
The assessee, a builder and developer, sold a flat for Rs. 37,21,000, but the stamp valuation authority assessed its value at Rs. 46,26,500. The assessing officer added the difference of Rs. 9,05,500 under Section 43CA. The assessee contended that the agreement was made in 2013, and part payment was received via cheque, which should be considered for valuation as per Section 43CA(3) & (4).
Held
The Tribunal held that the lower authorities disregarded the assessee's submissions and documentary evidence. Since part payment was received by cheque on dates prior to or around the date of the agreement, the provisions of Section 43CA(3) & (4) were applicable, making the assessee eligible for the benefit.
Key Issues
Whether the valuation of a flat for the purpose of Section 43CA should consider the agreement date and payment received, especially when part payment was made via cheque before or around the agreement date.
Sections Cited
43CA, 254(1)
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PER PAWAN SINGH, JUDICIAL MEMBER;
This appeal by assessee is directed against the order of Ld. CIT(A)/ADDL/JCIT(A)-8, Delhidated 26.03.2025 for assessment year (AY)
2015-16. The assessee has raised following grounds of appeal:
“1. CIT Appeal erred in confirming the addition of Rs.9,05,500/- u/s 43CA and by rejecting the Appellants clam that the difference between the agreement value and stamp duty value is due to the fact that the agreement for the flat no. 502 was entered into the earlier year on 17-09-2013. Payment of that was also received by the Appellant on the ground that allotment letter does not mention anything about the receipt of the payment. However at the bottom of the allotment letter it is clearly mentioned that the allotment is subject to realisation of cheque and therefore it is clear that cheque was received at the time of allotment of Rs.3,00,000/- which was cleared in our bank account on date 18-09-2013and a copy of bank statement is also filed before the said CIT.
Appellant further submits that the said CIT has never raised the issue during the hearing as otherwise we would have file the copy of the bank statement reflecting the payment made by the owner only.
3. The Appellant submits that as per the provisions of Section 43CA the date on which the agreement to buy the flat is entered into and the payment received should be considered for the purpose of comparison of agreement value with the stamp duty value.
4. The Appellant craves leave to add, to amend, to alter, to withdraw, to modify and/or to substitute any or all the foregoing grounds of appeal and to submit such statements, documents and papers as may be considered necessary either at or before the appeal hearing.
2. Rival submissions of both the parties have been heard and record perused.The learned Authorised Representative (ld. AR) of the assessee submits that the assessee is builder and developer. During the year under consideration the assessee entered in to registered agreement for sale of its unit/ Flat. The assessing officer made addition of Rs. 9,05,500/- under section 43CA of the Income Tax Act on the basis of difference in sale consideration of Flat No. 502, shown on agreement and value of flat determined by Stamp Valuation Authority. The purchaser of flat no. 502 i.e.
Mrs. Neeta Manoj Jain has agreed to purchase the said flat in 2013 and made part payment of sale consideration of Rs. 3.00 lakhs by way of cheque on 18.09.2013 and similar amount was paid on 01.10.2013. The assessing officer and ld. CIT(A) disregarded the submission of assessee and assessee and without considering the documentary evidences furnished by assessee made addition. The assessing officer has not considered the provisions of sub-section (3) & (4) of section 43CA, which specifically provides that if part of sale consideration has been received by way of account payee cheque or bank draft or by way of electronic clearing system on the date of fixing the agreement, the value of asset is to be considered on the date of such agreement. The ld. AR of the assessee furnished the copy of bank statement of purchaser of flat i.e. Mrs. Neeta Manoj Jain and her ledger account in its books of account. The ld AR of the assessee submits that entire addition is liable to be deleted.
On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the order of lower authorities.
I have considered the rival submissions of both the parties and gone through the orders of lower authorities carefully. I have also gone through the various documentary evidences including the bank statement of purchaser of flat no. 502 and the ledger account of assessee. I find that assessing officer during the assessment proceedings noted that assessee was developing a project Shakti Niwas, Ghatkopar (W), Mumbai. The assessing officer further noted that assessee has sold Flat no. 502 by showing consideration of Rs.37,21,000/- and the Stamp valuation Authority valued the Flat at Rs. 46,26,500/- for the purpose of registration of agreement. Thus, there was a difference vis-à-vis sale consideration shown in agreement and value determined by Stamp Valuation Authority in respect of Flat no. 502. The assessing officer invoked the provisions of section 43CA and added the difference of Rs. 9,05,500/-. The ld. CIT(A) confirmed the action. I find that the lower authorities disregarded the submission made by assessee and various documentary evidences furnished before them. I find that sub-section 3 & 4 of section 43CA is clearly applicable in the present case as the part payment of sale consideration of Flat no. 502 was paid on 18.09.2013 and 01.10.2013. Thus, the assessee is clearly eligible for the benefit of provisions of sub-section (3) & (4) of section 43CA. In the result, ground of appeal raised by assessee is allowed.
In the result, the appeal of assessee is allowed.