POONAM RAMESH SAHAJWANI,MUMBAI vs. ITO (IT) - 4(2)(1), MUMBAI

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ITA 2252/MUM/2019Status: DisposedITAT Mumbai23 November 2020AY 2014-158 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the proviso to Section 56(2)(vii)(b) applies when the date of agreement fixing consideration and the date of registration are different. The stamp duty value on the date of the agreement (booking date) should be considered.

What were the facts?

The assessee booked a residential flat in 2012 for ₹1,05,60,000 and paid a booking amount. The sale agreement was executed in 2014. The Assessing Officer invoked Section 56(2)(vii)(b)(ii) based on the difference between the stamp duty value at the time of registration and the sale consideration.

What were the issues?

Whether the stamp duty value on the date of booking or the date of registration should be considered for the purpose of Section 56(2)(vii)(b) when the consideration was fixed at the time of booking.

Which sections of the Income-tax Act were involved?

Section 56(2)(vii)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, MUMBAI

Before: SHRI VIKAS AWASTHY, JM & SHRI RAJESH KUMAR, AM

For Appellant: Ms. Rutaja N. Pawar, AR
Hearing: 14.10.2020Pronounced: 23.11.2020

आदेश / O R D E R श्री विकास अिस्थी, न्याययक सदस्य के द्िारा PER VIKAS AWASTHY, JM:

1.

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-58, Mumbai [in short ‘the CIT(A)’] dated 07.03.2019 for the Assessment year 2014-15. 2. Ms. Rutuja N. Pawar appearing on behalf of the assessee narrating the facts submitted that the assessee had booked a residential flat in a housing project “Royal Accord” developed by M/s Anuradha Real Estate Developers Pvt. Ltd during the financial year

3.

Per contra, Shri Uodal Raj Singh, representing the Department vehemently defined the impugned order and prayed for dismissing the appeal of the assessee. The learned Departmental Representative submitted that the allotment letter of the flat was issued to the assessee in December 2003 and the registered sale agreement was executed on 7th February 2014. Thus, both the documents were executed in favour of the assessee during the financial year 2013-14 relevant to the Assessment Year 2014-15. The ownership of the flat was passed on to the assessee in the period relevant to Assessment Year 2014-15. By merely making advance payment, the assessee does not get the ownership right in the flat.

4.

We have heard the submissions made by rival sides and have examined the orders of lower authorities and the documents on which the learned AR has placed reliance. The solitary issue raised by the assessee in present appeal is against invoking of the provisions of section 56(2)(vii)(b)(ii) of the Act to make the addition of ₹7,91,500/-.

5.

Undisputedly, the assessee booked a flat in building ‘Royal Accord’ developed by M/s Anuradha Real Estate Developers (P) Ltd. in August, 2012 and paid the booking amount. This fact is evident from Income from other sources “56. XXXXXXX.

(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: — (i) XXXXX (ia) XXXXX (ib) XXXXX (ic) XXXXX (id) XXXXX (iii) XXXXX (iv) XXXXX (v) XXXXX (vi) XXXXX (vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009 but before the 1st day of April, 2017, — (a) XXXXX (b) any immovable property, — (i) XXXXX (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:

6.

A bare perusal of first proviso to sub-clause (b) mandates that where the date of agreement fixing the amount of consideration of immovable property and the date of registration is not the same, the stamp duty value on the date of agreement shall be taken for the purpose of sub clause (b).

In the present case, the sale consideration of the flat was agreed on 2nd August, 2012. It is pertinent to mention here that the term ‘agreement’ used in proviso to sub-clause (b) does not necessarily mean a document with the title agreement. This would also include a first document by whatever name called, that reflects the intention of the parties mutually agreeing to fix amount of consideration. In our considered view, in the instant case the Proviso to sub clause (b) of section 56(2)(vii) of the Act gets attracted and the Stamp Duty value as on the date of booking the flat wherein the consideration was mutually agreed between the parties was fixed shall be taken for the purpose of sub clause (b). The assessee has also filed a report from the registered valuer, (page 119 of the paper book) according to which the stamp duty value of the flat in August, 2012 has been determined at ₹98,68,000/. We find merit in the contentions raised by the assessee.

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