INCOME TAX OFFICER- 24(3)(1), MUMBAI, MUMBAI vs. NARENDRA KUMAR JAIN, ANDHERI (E), MUMBAI

In response, assessee submitted that he has registered the agreement on 15.01.2020 i.e. in FY 2019-20 but on the terms of transaction and price agreed in F.Y. 2012-13 and not in F.Y. 2019- 20. The assessee also submitted a copy of Allotment letter dated 10.09.2012 of the said property allotted by M.D. Globus Reality Pvt. Ltd which was duly signed by one of the Directors of M.D. Globus Reality Pvt. Ltd. Thereafter, AO further required the assessee to submit documents registered for the propose agreement and further details. The assessee submitted that the agreement for purchase of property under construction though was registered in financial year 2019-20 but was in terms of agreement entered in financial year 2012-13. Thus, the assessee has entered into purchase transaction in the year 2012. Assessee also relied upon the decision of Hon’ble Bombay High Court in the case of PCIT vs. Vembu Vaidyanathan. However, AO rejected the assessee’s contention holding that; (i) the agreement for Sale dated 15.01.2020 does not mentions any allotment letter; (ii) Assessee has not registered the agreement or document for allotment from the competent authority as required 3 AY. 2020-21 by provisions of Section 269AB of the Act; (iii) AO prepared chart of payment made on to the seller at page 9 of his order and noted that there is shortfall in the amount of TDS; (iv) the assessee has neither shown cumulative payment in (immovable assets nor shown “Loan and advances given” and also not deducted tax in view of section 194-IA of the Act.

Accordingly, AO made the addition after observing as under:- After carefully and thoughtfully consideration of submission and on the basis of foregoing discussion, I came to conclusion that the Agreement for Sale of the said property was executed on 15/01/2020. Since, the sale agreement was made during the F.Y.2019-20, the transaction is to be considered for the year F.Y. 2019-20 only. Therefore, the difference amount of Rs.1,88,75,500/- (Rs.3,63,75,500/- value of the property as determined by the Stamp Duty Valuation Authority Rs. 1,75,00,000/- consideration paid by the assessee for the said property] is added to the total income of the assessee as per the provisions of Section 56(2)(x) of the Income-tax Act, 1961.

Ld. CIT (A) has deleted the addition holding as under:- I have carefully considered the submissions made by the Appellant, It is observed that the Appellant had purchased an immovable property i.e., flat No. D-801, Express Enclave, Andheri - East, Mumbai by Making an Initial payment of Rs 10,00,000/- by Account Payee Cheque dated 10/09/2012 drawn on Bank of Maharashtra at an agreement value of Rs 1,75,00,000/-. The stamp duty value as on the date of agreement was Rs 1,68,28,907/- . The said property was registered in F.Y. 2019-20 and the stamp duty value as on the date of Registration was Rs 3,63,75,500/-, All these details alongwith proof of payment through banking channel and bank statements were furnished before the AO during the course of scrutiny assessment proceedings. The Appellant had also furnished the allotment letter issued by the builder, namely M/s M.D. Globus Realty Pvt. Ltd. encapsulating all the terms, conditions and payment AY. 2020-21 schedules pertaining to the purchase of the property, effectively constituting a binding agreement between the involved parties, which were fully adhered to by the Appellant. The Applicable TDS was also deducted on payments made after 01-06-2013. As the agreement to buy the property was entered into by the appellant on 10/09/2012, i.e., prior to 01-04-2017, the provisions of section 55(2)(x) are not applicable in the case of the Appellant. The decisions of the Jurisdictional Hon'ble Bombay High Court in the case of PCIT-3 vs. Vembu Vaidyanathan in of 2016 and the Hon'ble Mumbai ITAT in Benudhar Gokulanand Biswal vs. National E Assessment Centre [2023] 153 taxmann.com 112 (Mumbai - Trib.) are squarely covered in favour of the Appellant and the additions made by the Appellant are hereby deleted. These grounds are allowed.

We have heard both parties and also relevant findings given in the impugned orders and material on record. The assessee had booked Flat with the builders M/s. M.D. Globus Reality Pvt Ltd and got an allotment letter by making an initial payment of Rs. 10,00,000/- on 10.09.2012. The agreement value was fixed at Rs. 1,75,00,000/-, whereas the read reckoner rate as on the date of agreement/ allotment was Rs. 1,68,00,000/-. Thereafter the assessee made payments to the builder as per the schedule starting from 10.09.2012 till 21.09.2020, the details of which are as under:-

In the result, appeal of the Revenue is dismissed.