EXCEL DEVELOPERS,MUMBAI V. INCOME TAX OFFICER, NAVI MUMBAI

ITA 3408/MUM/2025

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Excel Developers, a builder and developer, appealed against the order of the CIT(A) which confirmed the addition of Rs. 9,05,500 to their income under section 43CA of the Income Tax Act. This addition was based on the difference between the sale consideration shown in the agreement for Flat No. 502 and its value determined by the Stamp Valuation Authority. The assessee argued that the difference was due to the timing of the payment and the agreement, which were both in the earlier financial year, and provided documentary evidence including bank statements and ledger accounts to support their claim. The tribunal agreed with the assessee, noting that the lower authorities had disregarded crucial evidence and that the specific provisions of section 43CA applicable to the case were not considered.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772612 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDRA MOHAN
• Assessee Lawyers: KULDIP MEHTA
• Keywords: Sale consideration of property below Jantri Value
• Section: 43CA

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 3408/MUM/2025 (AY: 2015-16) (Physical hearing) Excel Developers 202, Swastik Apartments, LBS Marg, Garden Lane, Ghatkopar West, Mumbai – 400086. [PAN: AADFE9836F] Vs ITO, Ward – 27(1)(1), Mumbai Vashi Railway Station Building, Navi Mumbai – 400703. Appellant / Assessee Respondent / Revenue Assessee by Shri Kuldip Mehta, CA Revenue by Shri Surendra Mohan, Sr. DR Date of Institution 14.05.2025 Date of hearing 23.07.2025 Date of pronouncement 29.08.2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee is directed against the order of Ld. CIT(A)/ADDL/JCIT(A)-8, Delhidated 26.03.2025 for assessment year (AY) 2015-16. The assessee has raised following grounds of appeal: “1. CIT Appeal erred in confirming the addition of Rs.9,05,500/- u/s 43CA and by rejecting the Appellants clam that the difference between the agreement value and stamp duty value is due to the fact that the agreement for the flat no. 502 was entered into the earlier year on 17-09-2013. Payment of that was also received by the Appellant on the ground that allotment letter does not mention anything about the receipt of the payment. However at the bottom of the allotment letter it is clearly mentioned that the allotment is subject to realisation of cheque and therefore it is clear that cheque was received at the time of allotment of Rs.3,00,000/- which was cleared in our bank account on date 18-09-2013and a copy of bank statement is also filed before the said CIT. 2. Appellant further submits that the said CIT has never raised the issue during the hearing as otherwise we would have file the copy of the bank statement reflecting the payment made by the owner only. Printed from counselvise.com ITA No. 3408/Mum/2025 Excel Developers 2 3. The Appellant submits that as per the provisions of Section 43CA the date on which the agreement to buy the flat is entered into and the payment received should be considered for the purpose of comparison of agreement value with the stamp duty value. 4. The Appellant craves leave to add, to amend, to alter, to withdraw, to modify and/or to substitute any or all the foregoing grounds of appeal and to submit such statements, documents and papers as may be considered necessary either at or before the appeal hearing. 2. Rival submissions of both the parties have been heard and record perused.The learned Authorised Representative (ld. AR) of the assessee submits that the assessee is builder and developer. During the year under consideration the assessee entered in to registered agreement for sale of its unit/ Flat. The assessing officer made addition of Rs. 9,05,500/- under section 43CA of the Income Tax Act on the basis of difference in sale consideration of Flat No. 502, shown on agreement and value of flat determined by Stamp Valuation Authority. The purchaser of flat no. 502 i.e. Mrs. Neeta Manoj Jain has agreed to purchase the said flat in 2013 and made part payment of sale consideration of Rs. 3.00 lakhs by way of cheque on 18.09.2013 and similar amount was paid on 01.10.2013. The assessing officer and ld. CIT(A) disregarded the submission of assessee and assessee and without considering the documentary evidences furnished by assessee made addition. The assessing officer has not considered the provisions of sub-section (3) & (4) of section 43CA, which specifically provides that if part of sale consideration has been received by way of account payee cheque or bank draft or by way of electronic clearing system on the date of fixing the agreement, the value of asset is to be considered on the date of such Printed from counselvise.com ITA No. 3408/Mum/2025 Excel Developers 3 agreement. The ld. AR of the assessee furnished the copy of bank statement of purchaser of flat i.e. Mrs. Neeta Manoj Jain and her ledger account in its books of account. The ld AR of the assessee submits that entire addition is liable to be deleted. 3. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the order of lower authorities. 4. I have considered the rival submissions of both the parties and gone through the orders of lower authorities carefully. I have also gone through the various documentary evidences including the bank statement of purchaser of flat no. 502 and the ledger account of assessee. I find that assessing officer during the assessment proceedings noted that assessee was developing a project Shakti Niwas, Ghatkopar (W), Mumbai. The assessing officer further noted that assessee has sold Flat no. 502 by showing consideration of Rs.37,21,000/- and the Stamp valuation Authority valued the Flat at Rs. 46,26,500/- for the purpose of registration of agreement. Thus, there was a difference vis-à-vis sale consideration shown in agreement and value determined by Stamp Valuation Authority in respect of Flat no. 502. The assessing officer invoked the provisions of section 43CA and added the difference of Rs. 9,05,500/-. The ld. CIT(A) confirmed the action. I find that the lower authorities disregarded the submission made by assessee and various documentary evidences furnished before them. I find that sub-section 3 & 4 of section 43CA is clearly applicable in the present case as the part payment of sale consideration of Flat no. 502 was paid on 18.09.2013 and 01.10.2013. Thus, the assessee is clearly eligible for the benefit of provisions Printed from counselvise.com ITA No. 3408/Mum/2025 Excel Developers 4 of sub-section (3) & (4) of section 43CA. In the result, ground of appeal raised by assessee is allowed. 5. In the result, the appeal of assessee is allowed. Order was pronounced in the open Court on 29/08/2025. Sd/- PAWAN SINGH JUDICIAL MEMBER MUMBAI, Dated: 29/08/2025 Biswajit Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai Printed from counselvise.com "