PINKY DILIP MEHTA, MUMBAI V. ITO - 19(2)(4), MUMBAI

ITA 148/MUM/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 8927 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 26-10-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 15-02-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ABHIRAMA KARTHIKEYAN
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition
• Section: 56(2)(vii)(b)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” Bench, Mumbai Before Shri Shamim Yahya, Accountant Member I.T.A. No. 148/Mum/2021 (Assessment Year 2014-15) Pinky Dilip Mehta 1501, 15 th Floor Deshmukh Building Dr. Nanasaheb Deshmukh Lane, Girgoan, Mumbai-400 004 PAN : AFFPM6895R Vs. ITO-19(2)(4) 217, 2 n d Floor Matru Mandir Tardeo Road Mumbai-400 007 (Appellant) (Respondent) Assessee by None Department by Shri Abhirama Karthikeyan Date of Hearing 15.12.2021 Date of Pronouncement 14.02.2022 O R D E R Per Shri Shamim Yahya (AM) :- This appeal by the assessee is directed against the order of learned Commissioner of Income Tax (Appeals)-54 dated 24.08.2018 and pertain to assessment year 2014-15. 2. Grounds of appeal read as under:- Ground No. 1: Addition u/s 56(2)(b)fvii) of the Income Tax Act, 1961. 1.1 On the facts and in the circumstances of the case and in law, the learned CIT-(A) erred in confirming the addition done by the learned Assessing officer for the difference amounting to Rs. 38,31,000/- between the sale consideration and stamp duty value as adopted by the State Government for purpose of payment of stamp duty u/s 56(2)(b)(vii) of the Act. 1.2 In doing so, the learned CIT-(A) erred in not appreciating the fact that since the date of agreement fixing the amount of consideration for transfer of immovable ITA No.148/M/2021 2 property and the date of registration were falling in different financial years, the stamp duty value as on the date of entering into MOU has to be considered and not value on date of registration of property for purpose of applying provisions of section 56(2)(b)(vii) of the Act. 1.3 In view of the above ground of appeal, the appellant prays to delete addition made under section 56(2)(b)(vii) of the Act of Rs. 38,31,000/-. Ground No. 2: Penalty Proceedings u/s 271(l)(c) of the Income Tax Act, 1961. On the facts and circumstances of the case the Learned AO erred in initiating penalty proceedings u/s 271(1) (c) of the Income Tax Act, 1961. 3. Brief facts of the case are that the assessee has purchased two flats, flat no, 801 and 802 for a consideration of Rs.68,00,000/- and Rs.82,00,000/- respectively. The total consideration for both the flats as per the agreement, is Rs.1,50,00,000/-. The stamp duty value for these flats was Rs.85,60,500/- and Rs.1,02,71,500/-respectively. The cumulative stamp duty value was Rs.1,88,31,000/-. The AO asked the assessee as to why the difference of Rs.38,31,000/-(1,88,31,000-1,50,00,000) should not be added u/s 56(2)(vii)(b). It is seen from the assessment order that the AR of the assessee stated that he has no explanation to offer and provisions of section 56(2)(vii)(b) may be applied. Therefore, the AO made an addition of Rs.38,31,000/-applying the provisions of section 56(2)(vii)(b). 4. Upon assessees appeal, ld.CIT(A) rejected the assessees plea that there was a MOU earlier in this regard. The ld.CIT(A)’s order reads as under:- “The Learned Counsel for the appellant furnished a copy of the MOU during the appellate proceedings. The MOU is not registered. Moreover, it is not even on a stamp paper. It is on a white paper. The MOU speaks of a lump sum payment of Rs.1,50,00,000/- for both the flats together. No breakup of flat wise payment nor any details of the schedule for payment is mentioned in the MOU. As the AO rightly stated, there is absolutely no legal sanction to the MOU. There is no heading also which is seen on the MOU. The property has been registered in March, 2014 and as could be seen from the agreement for flat no. 802, the entire payment of Rs.82,00,000/- is seen to have been paid on 28.02.2014. It is surprising to note that if the MOU is signed in 2009 December, why no advance has been paid by the purchaser till February 2014 when the property was registered. This also goes to show that no value can be attached to the MOU furnished by the assessee at this point of time. Moreover, the assessee has not shown that the agreement value was the stamp duty valuation in 2009.The whole idea of MOU seems to be an afterthought as the AR himself agreed for the addition during assessment proceedings. If it all, an ITA No.148/M/2021 3 MOU existed, even though it could not be produced at least a mention of the same could have been made. Section 56(2)(vii) is reproduced here under: “[(vii) where an individual or a Hindu undivided Family receives, in any previous year, from any person or persons on or after the 1 st day of October, 2009,- (a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum; (b) any immovable property. - (i) Without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; (II) For a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration: Provided that where the date of the agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of the agreement may be taken for the purposes of this sub clause: Provided further that the said proviso shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by any mode other than ash on or before the date of the agreement for the transfer of such immovable property:] As per the Section, where any immovable property is received by an assessee for a consideration less than the stamp duty value of such property than the stamp duty value of the property is deemed as the purchase consideration. The AO has no discretion to adopt the lesser value. He need not enquire into actual purchase cost but as to adopt the stamp duty value which was what was done by the AO, In view of these facts and circumstances, the addition made by the AO is confirmed. This ground of appeal is DISMISSED.” 5. Against the above order, assessee is in appeal before ITAT. 6. I have heard the ld. DR and perused the records. I find that the grounds raised by the assessee has no merits whatsoever, when the said MOU which is being claimed to be the basis is devoid of any payment of advance along with no recognisation for the same can be given. The order of the ld.CIT(A) is proper and reasonable. Hence, I uphold the same. 7. In the result, this appeal by the assessee stands dismissed. ITA No.148/M/2021 4 Pronounced in the open court on 14 .02.2022 Sd/- (SHAMIM YAHYA) ACCOUNTANT MEMBER Mumbai; Dated : 14.02.2022 Thirumalesh, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. CIT 5. DR, ITAT, Mumbai 6. Guard File. BY ORDER, //True Copy// ( (( (Assistant Registrar) ITAT, Mumbai