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Facts
The Assessing Officer (AO) added the difference between the stamp duty value and the consideration paid for two properties to the appellant's income under Section 56(2)(x)(b) of the Income Tax Act. This addition was made because the allotment letter for the properties was in the appellant's wife's name. The appellant contended that the properties were jointly purchased and paid for.
Held
The Tribunal held that the AO could not deny the benefit of Section 56(2)(x) of the Act to the appellant simply because the allotment letter was in his wife's name, as all evidence indicated joint ownership and payment. The surrounding circumstances and documentary evidence supported the appellant's claim of co-ownership.
Key Issues
Whether the appellant is eligible for the benefit of joint property ownership and its consideration under Section 56(2)(x) when the allotment letter was only in the wife's name.
Sections Cited
56(2)(x), 56(2)(x)(b)
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Income Tax Appellate Tribunal, Mumbai “K(SMC
Before: Shri Sandeep Gosain (JM) & Shri Omkareshwar Chidara (AM)
From the assessment order, it is observed that Ld. AO made this addition because appellant’s name is not mentioned in the allotment letter of 2015, the appellant is not eligible for the benefit of rates of 2015, under section 56(2)(x) of the Act. The Ld. AO opined that in the allotment letter issued in 2015 by the builder mentioned the name of appellant’s wife and she is entitled to the benefit of section 56(2)(x) of the Act and 2015 rates can be applied to her only and accordingly 50% share of appellant was added by 2 Ramaswami Parameswaran Nallepilly the Ld. AO while completing the assessment. The Ld. CIT(A) confirmed the addition made by the Ld. AO agreeing with his interpretation of law and facts.
During the hearing proceedings before the Bench, the appellant took a single ground of appeal stating that the appellant is entitled to claim the benefit of first proviso to section 56(2)(x) of the Act and the addition made by the Ld. AO is not called for. The following arguments were made by Ld. AO :-
a) The builder has issued the allotment letter in 2015 in his wife’s name alone by mistake. Actually, the properties belong to him and his wife. b) The Ld. AR of the appellant has shown copy of his pass book to evidence that the booking amount for flats was paid in 2015 by him also. It was argued that the bank loan to buy these properties was obtained in joint names i.e. the appellant and his wife. The loan sanction letter of bank clearly shows that the property was purchased by the appellant and his wife and hence both appellant and his wife are entitled to the relief under section 56(2)(x) of the Act. c) It was also argued that the “Agreement for sale” entered into with builder contains names of the appellant and his wife.
Hence, it was argued that the Ld. AO cannot give benefit section 56(2)(x) of the Act only to the wife of appellant denying the same to the appellant on the same set of circumstances. The Ld. AR, thus pleaded for deletion of addition made by the Ld. AO.
The Ld. DR relied on the orders of Ld. AO and Ld. CIT(A).
Heard both sides and perused the evidences filed by the Ld. AR of the appellant during the course of hearing. There is considerable force in the argument of Ld. AR of the appellant and hence the Bench gives relief to the appellant by setting aside the order of Ld. CIT(A)/AO for the following reasons :- a) All the evidences filed by the Ld. AR of the appellant like bank pass book, copies of Agreement to sell entered into with builder
3 Ramaswami Parameswaran Nallepilly shows that the flats were allotted to both wife and husband and the flats are owned by them jointly. b) The bank loan was also obtained, to buy these properties, in joint names from HDFC bank. c) Since consideration was paid by both wife and husband by issuing cheques in 2015 itself, the condition to get the benefit section 56(2)(x) of the Act was fulfilled. Hence, the Ld. AO cannot deny benefit to the appellant merely because the allotment letter was in the name of appellant’s wife only. All the surrounding circumstances coupled with documentary evidences filed by the Ld. AR of the appellant shows that the appellant is the co-owner of these properties from 2015 onwards and merely appellant’s name was not mentioned in the allotment letter, the benefit as mentioned above cannot be denied to the appellant. Hence, the addition is deleted and the order of Ld. CIT(A) is set aside.
The appeal of the appellant’s is allowed.
Order pronounced in the open Court on 27/06/2025.