NILESH BHAWNANI,KOLKATA vs. ITO, WARD - 32(3), KOLKATA, KOLKATA

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ITA 193/KOL/2018Status: DisposedITAT Kolkata13 September 2019AY 2014-153 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 addition under section 56(2)(vii)(b) was not justified because the assessee had paid a part of the consideration through a cheque dated 04.04.2012, which was prior to the agreement date of 15.04.2012, satisfying the proviso to the section.

What were the facts?

The assessee purchased a property where the sale agreement was dated 15.04.2012, and the conveyance deed was executed on 05.07.2013. The lower authorities made an addition under section 56(2)(vii)(b) based on the difference between the stamp value and the sale consideration.

What were the issues?

Whether the addition under section 56(2)(vii)(b) is valid when part of the consideration was paid before the date of the agreement, and the registration occurred later.

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, KOLKATA BENCH “A” KOLKATA

Before: Shri S.S.Godara & Dr. A.L. Saini

आदेश /O R D E R PER S.S.Godara, Judicial Member:- This assessee’s appeal for assessment year 2014-15 arises against the Commissioner of Income Tax (Appeals)-9 Kolkata’s order dated 28.12.2017 passed in case No.301/CIT(A)-9/Wd-32(3)/2016- 17/Kol, involving proceedings u/s 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file perused.

1.

Nilesh Bhawnani Vs. ITO Wd-32(3) Kol. Page 2 2. It transpires during the course of hearing that the assessee’s sole substantive ground challenges correctness of both the lower authorities’ action making sec. 56(2)(vii)(b) addition of ₹5,74,548/- on account of difference in sale / purchase consideration of the property as per the agreement dated 15.04.2012 amounting to ₹50 lacs the registered conveyance deed executed on 05.07.2013 for stamp value of ₹1,11,65,000/- as against the DVO’s valuation coming to ₹55,74,548/-; respectively.

3.

We have given our thoughtful consideration to rival contentions against and in support of the impugned addition as per assessee and Revenue’s stands. It emerges during the curse of hearing that the assessee had paid ₹20 lacs through cheque No.000050 dated 04.04.2012 through his Bank of India account to the vendor concerned as evident from page 57 in the paper book forming part of the agreement dated 15.04.2012 to this effect. There is no dispute to correctness of this clinching aspect from the Revenue side. We thus quote sec. 56(2)(vii)(B) clause-2 read with first and second proviso thereto making it clear that the former one applies to adopt stamp value on the date of agreement in case the transfer of the property and registration are not the same whereas the latter proviso makes it explicitly clear that former shall apply only in a case where the amount of consideration refer to therein, or a part thereof, has been made by any mode other than cash or on or before the date of the relevant agreement. We re-emphasise that the assessee’s cheque payment is dated 04.04.2012. It had entered into the corresponding agreement to purchase on 15.04.2012. We therefore see no merit in both the lower authorities’ action making the Nilesh Bhawnani Vs. ITO Wd-32(3) Kol. Page 3 impugned addition of ₹5,74,548/- u/s 56(2)(vii)(b) of the Act. The same is directed to be deleted.

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