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Income Tax Appellate Tribunal, DELHI BENCH “SMC” NEW DELHI
Before: SHRI AMIT SHUKLA
O R D E R The aforesaid appeals have been filed by the above named assessees against separate impugned order of even date dated 23.05.2018, passed by ld. Commissioner of Income Tax (Appeals), Muzaffarnagar for the quantum of assessment passed u/s.143(3) for the Assessment Year 2015-16. Since issues involved in the both the appeals are same, arising out of identical set of facts, therefore, same were heard together and are being disposed of by way of this consolidated order.
The appeal of Shri Vinod Kumar Suneja is taken up as a lead case and my findings given therein will apply mutatis mutandis in the appeal of Anju Suneja. In the grounds of appeal
, the assessee has raised the following grounds of appeal :- “1. The Ld. CIT(A) has erred in confirming the order of the AO by making the assessment at the income of Rs, 3007330/- as against the returned income of Rs. 597830/-
2. The Ld. CIT(A) has erred in confirming the addition of Rs. 2009500 u/s 56(2)(vii) being the difference of actual purchase consideration and the circle rate of the property.
3. The Ld. CIT(A) has erred in confirming the addition of Rs. 4,00,000/- u/s 68 on account loan from son.”
3. The brief facts qua the issue of addition of Rs.20,09,500/- made u/s.56(2)(vii) being difference of actual purchase consideration and circle rate of the property are that, assessee along with his wife had jointly purchased the flat in Indrapuram, Ghaziabad (UP), vide sale deed dated 09.01.2015 at consideration of Rs.1,05,00,000/-, however for the purpose of stamp duty as per circle rate on the date of sale, amount shown was at Rs.1,45,19,000/-. Accordingly, the difference in actual purchase consideration and the value on which stamp duty was paid has been added by the Assessing Officer u/s.56(2)(vii)(b)(ii), amounting to Rs.20,09,500/- being 50% in the difference of Rs.40,19,000/-; and the balance 50% has been added in the hands of the appellant’s wife. The assessee’s case before the Assessing Officer was that he has entered into agreement to sale with the buyer on 16.07.2014 and in pursuance to which part payment of Rs.7,50,000/- by cheque was made and the rest amount was paid at the time of final sale deed, i.e., date of registration on 09.01.2015. On the said date the prevailing circle rate was Rs.1,04,56,000/-. It was at the time of registration that the circle rate was revised and was increased to Rs.1,45,19,000/-. In the agreement to sale both the parties had agreed that the sale consideration would be at Rs.1,05,00,000/-. However, ld. Assessing Officer has rejected the assessee’s contention on the ground that no documentary evidences have been produced by the assessee which can substantiate the contention of the assessee that his case fall in the exceptions provided in proviso to Section 56(2)(vii)(b)(ii). He also held that since the agreement to sale was unregistered, therefore, such an agreement cannot be taken into consideration.
4. Before the ld. CIT(A), assessee has referred to various replies filed before the Assessing Officer which has been incorporated in the impugned appellate order from pages 4 to 6. In sum and substance, it was submitted that assessee had entered into an agreement earlier vide agreement dated 18.12.2013 in which final consideration was fixed at Rs.1,05,00,000/- and part payment of the consideration was also made in the form of one ginni and five silver coins for the value of Rs. 36,000/-. Later on, assessee again entered into agreement on 16.07.2014 and in pursuance to such agreement has made payment of Rs.7,50,00,000/- by way of account payee cheque on 14.07.2014; and till the date of agreement circle rate of the property was Rs. 1.04 crore as per the notified circle rate and it was only w.e.f. 01.08.2014 that the circle rate was changed. It was submitted that assessee’s case falls within the exception provided in the proviso which covers a situation where, if, agreement for transfer has been entered into before registration, then the stamp duty value as on date of value has to be considered instead of stamp value on the date of registration. The conditions specified under the proviso stood fully satisfied like: a) “The assessee has entered into an agreement; b) The agreement is dated; c) The agreement is for transfer of immovable property;
d) The agreement is entered into before the date of registration; e) The agreement fixes consideration; f) The consideration or part thereof has been paid on or before the date of the agreement; g) Such payment is by a mode other than cash”
Ld. CIT (A) after noting down the assessee’s submission from pages 2 to 10 observed that the agreement dated 16.07.2014 which is an unregistered document, the details of witnesses are not given, therefore, same cannot be held to be authentic document. He further noted that there was a cheque of Rs.7,50,000/- by the assessee to the seller but the said cheque was issued from the account of ‘M/s. Vinod Kumar Suneja and sons and HUF’ and was debited in the said bank account on 14.10.2014. The stamp duty of the circle rate had changed from 01.08.2014 and on the date of final registered sale deed on 09.01.2015 the circle rate was Rs. 1,45,19,000/-. Thus, assessee’s case was not covered by the proviso and accordingly, he upheld the addition made by the Assessing Officer.
After considering the submissions made by the parties and on perusal of the relevant finding given in the impugned orders as well as material referred to before me, it is seen that earlier assessee had entered into agreement for sale on 18.12.2013 of flat at Indrapuram Ghaziabad. Under the said agreement the parties had agreed that total consideration would be Rs.1,05,00,000/- and at that time consideration of Rs.36,000/- was paid in the form of ginni and silver coins. Later on, another agreement to sale was entered on 16th July, 2014, under the following terms and conditions: “Terms & Conditions Subject to the following conditions the agreement between seller and purchaser shall make final payment for the property amounting to Rs. 1,05,00,000/- (One Crore Five Lac Rupess only) including of a cheque no. 000006 of Rs. 7,50,000/- of Bank of Baroda (which is given advance money in the form of consideration on the date of agreement in the presence of witness of this agreement, it means total purchase consideration of said property was decided as Rs. 1,05,00,000/- with above said advance already paid as partial payment of the consideration of the contract and also decided in the presence of witness that the sale deed will be made and executed in the month January, 2015. Purchasers agree to pay the entire amount on or before sale deed registration. Concurrent with the execution of this Agreement, Buyers has deposited with the Seller the sum of Rs. 7,50,000/- in the form of cheque as kind consideration. The Agreement shall be binding on and inure to the benefit of the parties to this Agreement and their respective heirs, executors, administrators, legal representatives, successors and assigns as permitted by this agreement under the laws of the state of Uttar Pradesh Government.” 6.1 On the perusal of the said agreement it is seen that both, assessee and his wife Smt. Anju Suneja had signed the agreement, and the seller Smt. Neelam Kumari, wife of Rajesh Kumar had also signed the agreement. Two independent witnesses have also signed as witness. The said agreement has also been notarized. It is an undisputed fact that at the time of agreement to sale, the circle rate of the property was Rs.1,04,56,000/-, i.e., slightly less than the sale consideration agreed between the parties. Later on, the said property was registered on the same amount of Rs.1.05 crore, however the stamp duty payable as per the circle rate was Rs.1,45,19,000/-. This circle rate has been stated to have been increased after the entering of the agreement to sale. Both the authorities have discarded the earlier agreements to sale, firstly, on the ground that there is no evidence with regard to the payment of consideration of Rs.36,000/- in terms of agreement dated 18.12.2013 as assessee could not prove the consideration paid for Rs.36,000/- in the form of ginni and silver coins; and secondly, agreement dated 16.07.2013 was not registered. Ld. CIT (A) has even recorded that details of particulars of witnesses are not given except that for there is a signature of the witnesses. Now whether there is any provision that agreement to sale should be registered has not been specified by any of the authorities below. In the relevant period, there was no such provision that agreement to sale should be registered as the parties have entered into the contract for sale of property on a stamp paper to Rs.100/- and duly signed by the witnesses. If the authenticity of the agreement was in doubt for the reason that details of witnesses are not given, then same should have been called upon by the assessee to furnish the details. If the purchaser and seller have signed the contract for agreement to sell, duly witnesses by two independent witnesses, then such a contract cannot be discarded. Nowhere the Assessing Officer and ld. CIT (A) has brought on record that at the relevant time there was any mandate of law that agreement to sell should have been registered. No doubt under the law, the difference between the sale consideration and the circle rate is deemed to be income of the assessee taxable under the head income from other sources in view of Section 56(2)(vii)(b), however there is an exception provided in proviso for the sake of ready reference sub-clause (b) of Clause (vii) of Section 56(2) reads as under: “(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) xxxxxxxxxxx (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 the sub-clause.” 6.2 The said proviso provides that where on the date of agreement fixed amount for consideration for the transfer of immovable property and the date of registration are not same, then the stamp value on the date of agreement has to be accepted. Then in that case deeming provision will not apply.
Here in this case assessee has entered into an agreement and on which day the circle rate was less than Rs.1.05 crore and agreement was for transfer of immovable property and was entered before the date of registration. In the agreement, parties have agreed to fix the consideration for transfer of property at Rs.1.05 crore and part of the consideration was paid on or before the date of agreement which was other than by cash. Merely because cheque has been issued from a different bank account belonging to HUF and amount was debited post agreement date of 16.07.2014 that does not mean the part consideration has not been paid in pursuance of the agreement. As noted above, the agreement clearly binds the parties that the sale consideration would be Rs.1.05 crore and amount of Rs.7,50,000/- was given as advance money. Clearing of cheque on a subsequent date will not alter its situation. Accordingly, I am of the opinion that under the facts and circumstances of the case, the assessee’s case falls within the proviso and therefore, deemed income between the difference amount for consideration and stamp duty value of the property cannot be added and same is directed to be deleted.
In the case of appellant’s wife, Smt. Anju Suneja the aforesaid finding will apply mutatis mutandis. In the result, the both the appeals are allowed. Order pronounced in the open Court on 27th March, 2019.