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Facts
The assessee purchased land for Rs. 21,61,500/-, but the stamp duty valuation was Rs. 24,36,000/-. The Assessing Officer added the difference of Rs. 2,74,500/- to the assessee's income under Section 56(2)(vii), as the registered sale deed was dated 03/03/2015. The assessee contended that the property was purchased in 2014 via an oral agreement, with payments made in 2014 itself.
Held
The Tribunal noted that the sale deed reflected the initial payments made in 2014. Applying the proviso to Section 56(2)(vii), which allows considering the stamp duty value on the agreement date if it differs from the registration date, the Tribunal found the addition made by the AO was not applicable. Consequently, the addition of Rs. 2,74,500/- was deleted.
Key Issues
Whether the difference between sale consideration and stamp duty valuation under Section 56(2)(vii) applies when the date of agreement and initial payments precede the date of property registration.
Sections Cited
250, 56(2)(vii)
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Income Tax Appellate Tribunal, NAGPUR “SMC” BENCH :: NAGPUR
Before: SHRI NARENDER KUMAR CHOUDHRY
This appeal has been preferred by the Assessee against the order dated 20/12/2024 impugned herein passed by the Commissioner of Income Tax (Appeals)-3, Nagpur (in short, ‘Ld. Commissioner’) u/sec. 250 of the Income Tax Act, 1961 (in short, ‘Act’) for the A.Y. 2015-16.
(Saurabh Ashok Agrawal) 2. It is observed that there is a delay of 36 days in filing the instant appeal. The Assessee has filed a sworn affidavit and mentioned the reasons for delay in filing the appeal. The reasons assigned by the Assessee for condonation of delay of 36 days, as genuine, bonafide and unintentional, delay is condoned.
In the instant case, during the course of assessment proceedings, it was noticed by the Assessing Officer (AO) that the Assessee had purchased a piece of land valued at Rs. 21,61,500/- vide registered sale deed dated 03/03/2015 as against the stamp duty valuation to the tune of Rs. 24,36,000/- and, therefore, added the difference amount of Rs. 2,74,500/-, between the stamp duty valuation and consideration shown by the Assessee u/sec. 56(2)(vii) of the Act, to the total income of the Assessee. The Assessee has claimed that as per oral agreement and mutual understand that the property was purchased in 2014 itself by making the following payments:- Date of payment Mode of payment Amount 04/08/2014 Cheque No.091482 1,63,850 02/09/2014 Cheque No.091483 1,11,000 01/10/2014 Cheque No.091484 1,11,000 05/11/2014 Cheque No.091485 1,11,000 03/12/2014 Cheque No.091486 1,11,000 Total 6,70,850
The Assessee drew the attention of this Court to the sale deed dated 03/03/2015 wherein at para 1, the aforesaid payments have (Saurabh Ashok Agrawal) duly been reflected and rest of the amount has been paid in subsequent installments and, therefore, according to proviso to section 56(2)(vii) of the Act which prescribed that where the date of agreement fixing the amount of consideration for transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of agreement may be taken for the purpose of this sub-clause.
Thus, considering the peculiar facts and circumstances in totality, this Court is inclined to delete the addition made by the Ld.AO u/sec. 56(2)(vii)(b) which is otherwise not applicable to the Assessee’s case. Thus, the addition is deleted by allowing the appeal of the Assessee.
In the result, Assessee’s appeal is allowed.