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Facts
The assessee purchased a property in 1992 for Rs. 3,51,000/- based on an agreement, but registration and stamp duty payment at market value (Rs. 44,17,500/-) occurred in 2014. The AO treated the difference as unexplained investment under Section 69, and the CIT(A) upheld this.
Held
The Tribunal held that the property was indeed purchased in 1992 for Rs. 3,51,000/-, as evidenced by the agreement and subsequent maintenance charges paid by the assessee to the housing society. The later registration and stamp duty payment at market value reflected the then-prevailing rates, not the actual purchase consideration.
Key Issues
Whether the addition of Rs. 44,17,500/- as unexplained investment under Section 69 was justified when the actual purchase consideration was Rs. 3,51,000/- in 1992, with registration and stamp duty paid in 2014 at market value.
Sections Cited
69, 56(2)(vii)
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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI NARENDRA KUMAR BILLAIYA, HON’BLE & SHRI SUNIL KUMAR SINGH, HON’BLE
सुनवाई की तारीख/Date of Hearing : 28/08/2024 घोषणा की तारीख/Date of Pronouncement : 28/08/2024 आदेश/O R D E R
PER NARENDRA KUMAR BILLAIYA, AM :
This appeal by the assessee is preferred against the order dated 12/02/2024 by NFAC Delhi [in short ‘ld. CIT(A)] pertaining to AY 2014- 15.
The grievance of the revenue reads as under:- “1. The Ld. National Faceless Appeal Center (hereinafter referred to as 'The NFAC') erred in upholding the validity of the assessment order which is undated and the same was served on the Appellant on 27/01/2017. Thus, the Appellant presumes that the same was not passed before the due date i.e. 31s December, 2016. (Original GOA a and b.) 2. The Ld. NFAC erred in confirming the addition of Rs. 44,17,500/- made by the Ld. AO invoking provisions of the section 69 of the Income tax Act, 1961 (hereinafter referred to as the Act) without appreciating the facts and circumstances of the case. 3. The Ld. NFAC failed appreciate that the flat no 33 in Nand Deep was purchased from R.D. Construction Co. vide agreement dated 12/05/1992 with a consideration of Rs. 3,51,000/-, however, the same was not registered. The purchase agreement was registered along with deed of conveyance on 31/12/2013 on which the stamp duty 2 was paid as per the market value determined by the Stamp Duty authorities as on 31/12/2013. Thus, no investment was made during the previous year relevant the impugned assessment year. Hence, the addition of Rs. 44,17,500/- is not at all justified and the same may be deleted. 4. Without prejudice to other grounds of appeal
, the Ld. NFAC erred in confirming the addition of Rs. 44,17,500/- by invoking provisions of section 56(2)(vii) of the Act without appreciating the fact that the said section is not applicable on the facts and circumstances of the Appellants case.”
3. At the very outset, the ld. Counsel for the assessee stated that he is not pressing Ground No.
1. Therefore, the same is dismissed as not pressed.
4. The sum and substance of the grievance argued before us relates to the addition of Rs. 44,17,500/- made under head “income from other sources”.
5. The underlying facts in the impugned issue are that, during the course of scrutiny assessment proceedings, as per the AIR details, the AO came to know that the assessee has purchased immovable property valued at Rs. 44,17,500/-. The assessee was asked to furnish the details as the said purchase was not declared but was shown only after the AO raised questions regarding the property. 5.1. The assessee strongly contended that the said property was purchased in AY 1992-93 but was never registered at that time and only in AY 2014-15, the said property was registered and stamp duty was paid at market value of Rs.44,17,500/-. It was brought to the notice of the AO that the said property was purchased for Rs.3,51,000/-. The reply of the assessee did not find any favour with the AO who was of the opinion that, the assessee never produced any proof of payment to purchase the said property at Rs.3,51,000/- in FY 1992-93. The AO proceeded by making addition of Rs. 44,17,500/- as unexplained investment u/s 69 of the Act.
3 6. The assessee carried the matter before the ld. CIT(A) but without any success.
Before us, the ld. Counsel for the assessee drew our attention to the agreement dated 12/05/1992 and pointed out that the said property was agreed to be purchased on 12/05/1992, for a consideration of Rs.3,51,000/-. The ld. Counsel further contended that the said property was registered on 15/01/2014 when the stamp duty was paid on the market value of Rs.44,17,500/-. The ld. Counsel for the assessee strongly contended that the property was never purchased for Rs.44,17,500/- but only for Rs.3,51,000/- and that too in May, 1992. The ld. Counsel for the assessee further pointed out that NandDeep Co-operative Housing Society, entered the name of the assessee as the owner of the premises and started collecting maintenance charges. The ld. Counsel concluded by stating that as per the relevant provisions of the Act, the assessee got the property transferred in his name in May, 1992, for a consideration of Rs.3,51,000/-. Therefore, the impugned addition should be deleted. The ld. D/R placed strong reliance on the assessment order and the order of the ld. First Appellate Authority.
We have carefully considered the orders of the authorities below. The undisputed fact is that, as per the agreement dated 12/05/1992, the assessee got the possession of the said property for a consideration of Rs.3,51,000/- which is also evident from copy of the agreement placed at pages 15 to 29 of the paper book. It is also not in dispute that the said property was registered on 15/01/2014 for a market value of Rs.44,17,500/- on which the stamp duty was paid as per the registration documents placed at pages 30 to 34 of the paper book. In the registry itself, there is a reference to the agreement dated 12/05/1992 wherein