SANJAY DATTATRAYA DAPODIKAR,PUNE vs. INCOME-TAX OFFICER, WARD - 6(2), PUNE

आदेश / ORDER

PER R.S.SYAL, VP :

This appeal by the assessee arises out of the order passed by the CIT(A)-4, Pune on 21-08-2018 in relation to the assessment year 2015-16.

2 ITA No.1747/PUN/2018 Sanjay D. Dapodikar

Rs.57,07,775/-. Invoking the provisions of section 56(2)(vii)(b),

the Assessing Officer (AO) held that the difference between the

stamp value of the property purchased as on the date of

registration of sale deed and the actual purchase consideration

was liable to be considered as income under this section. He,

therefore, made an addition of Rs.26,07,775/- (Rs.57,07,775 –

Rs.31,00,000) u/s.56(2)(vii)(b). The ld. CIT(A) sustained the

addition against which the assessee has come up in appeal before

the Tribunal.

material on record. The factual matrix as set out in the

assessment order as well, is that the assessee entered into an

agreement with Late Shri Dnyaneshwar Dattatraya Shinde,

father of the present vendor, Shri Vishal Dnyaneshwar Shinde

for purchase of the property on 30-01-2008 at an agreed

consideration of Rs.21,00,000/-. At that time, the stamp value of

the property was Rs.23,75,000/-. A registered irrevocable Power

of attorney was executed on the same date. The assessee paid

sum of Rs.1.00 lakh on 08-01-2008 by Cheque No.724537. Out

of balance consideration of Rs.20.00 lakh, a sum of Rs.5.00 lakh

3 ITA No.1747/PUN/2018 Sanjay D. Dapodikar

was to be paid within 3 months from the date of agreement and

Rs.15.00 lakh was to be paid upon sanction of TDR by the Pune

Municipal Corporation. Shri Dnyaneshwar Dattatraya Shinde

passed away before effecting the transfer of the property in

favour of the assessee. Since Shri Dnyaneshwar Dattatraya

Shinde had passed away after registering an Irrevocable PoA in

favour of the assessee in the year 2008, the assessee entered into

a fresh agreement with the legal heir of the deceased vendor for

purchase of such property. On 09-03-2015, a purchase deed was

executed for the said property at a consideration of Rs.31.00 lakh

between the assessee and Shri Vishal Dnyaneshwar Shinde s/o.

Late Shri Dnyaneshwar Dattatraya Shinde. The sale deed was

registered on 11-03-2015. A copy of the registered sale deed

dated 11-03-2015 has been placed in the paper book. Clause (9)

of the sale deed clearly mentions that : `the Assignor knows

about the agreement and Power of Attorney dated 30-01-2008

between the Assignee and Assignor’s father Mr. Dnyaneshwar

Dattatraya Shinde’. Thus, it is apparent that the registered sale

deed executed on 11-03-2015 is not an altogether a fresh sale

deed, but continuation of the registered irrevocable PoA issued

in favour of the assessee in 2008. Under such circumstances, a

4 ITA No.1747/PUN/2018 Sanjay D. Dapodikar

question arises as to whether provisions of section 56(2)(vii)(b)

are attracted in this case.

relevant to reproduce the prescription of section 56(2)(vii)(b) as

under : -

` 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 :— …..

(b) any immovable property,— (i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; (ii) for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such 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 said proviso shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by any mode other than cash on or before the date of the agreement for the transfer of such immovable property;’

was inserted by the Finance Act, 2013 w.e.f. 01-04-2014 and

hence the same should not be applied as the agreement for

purchase of property was entered into in the year 2008 and at

that time this provision was not in vogue. In my considered

5 ITA No.1747/PUN/2018 Sanjay D. Dapodikar

opinion, this contention is far-fetched. As the sale deed was

actually executed in the year 2015 and at that time the provisions

of section 56(2)(vii)(b) were on the statute book, the same are

held to be applicable, in principle.

all, the provisions of section 56(2)(vii)(b) are to be applied, then

the same should be considered in entirety in the light of two

provisos with the effect that, if the date of agreement fixing the

amount of consideration and the actual registration for the

transfer of capital asset are not same, then the value should be

considered with reference to the date of agreement fixing the

amount of consideration of an anterior date and not the stamp

value on the date of registration of sale deed. The other proviso

provides that such substitution would be allowed only if full

consideration or part thereof was received by means of banking

channel at the time of execution of the agreement for transfer.

deserves to be accepted. First proviso to section 56(2)(vii)(b) of

the Act categorically provides that where the date of agreement

fixing the amount of consideration for the transfer of immovable

6 ITA No.1747/PUN/2018 Sanjay D. Dapodikar

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

purpose of this provision. Admittedly, the irrevocable PoA was

registered in the year 2008 fixing the price of the property at

Rs.21.00 lac, even though the actual transfer took place in the

year 2015. Prescription of the second proviso is admittedly

fulfilled in the instant case in as much as the assessee paid a sum

of Rs.1.00 lakh as part payment prior to the date of the

Agreement in the year 2008 through banking channel. In view

of the foregoing discussion, it is held that the mandate of the

main part of section 56(2)(vii)(b) does not apply to the facts of

the instant case as it is covered by the first and second provisos

in as much as the assessee entered into an agreement fixing the

amount of consideration for the purchase of immovable property

in the year 2008 but the actual registration took place in 2015

and further the assessee paid a part of the consideration by

cheque in the year 2008 before the date of the Agreement. In

such circumstances, it is the stamp value on the date of

Agreement in the year 2008, which should be applied for the

purpose of the sub-clause and not the stamp value as in the year

2015. Stamp value of the property as on the date of agreement

7 ITA No.1747/PUN/2018 Sanjay D. Dapodikar

in 2008 was Rs.23,75,000/- as has been recorded in para no.4.2

of the assessment order. As such stamp value is obviously less

than the actual consideration at Rs.31.00 lakh, I hold that the

mandate of the main part of section 56(2)(vii)(b) is not attracted

so as to warrant any addition on this score. I, therefore, order to

delete the addition of Rs.26.07 lakh.

Order pronounced in the Open Court on 30th April, 2019.

Sd/- (R.S.SYAL) उपा�य� उपा�य�/ VICE PRESIDENT उपा�य� उपा�य�

पुणे Pune; �दनांक Dated : 30th April, 2019 सतीश आदेश क� क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत / Copy of the Order is forwarded to : अ�ेिषत आदेश आदेश आदेश 1. अपीलाथ� / The Appellant; ��यथ� / The Respondent; 2. आयकर आयु�(अपील) / 3. The CIT (Appeals)-4, Pune 4. The Pr. CIT-3, Pune िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “SMC” / 5. DR ‘SMC’, ITAT, Pune; गाड� फाईल / Guard file. 6. // True copy // आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER, आदेशानुसार

// True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune

ITA No.1747/PUN/2018 Sanjay D. Dapodikar

Date 1. Draft dictated on 30-04-2019 Sr.PS 2. Draft placed before author 30-04-2019 Sr.PS 3. Draft proposed & placed JM before the second member 4. Draft discussed/approved JM by Second Member. 5. Approved Draft comes to Sr.PS the Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *