POONAM RAMESH SAHAJWANI, MUMBAI V. ITO (IT) - 4(2)(1), MUMBAI

ITA 2252/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2902 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 10-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VODAL RAJ SINGH
• Assessee Lawyers: RUTAJA N PAWAR
• Keywords: Sale consideration of property below Jantri Value; Set aside
• Section: 56(2)(vii)(b); 56(2); 13; 119

Judgement Text

C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI , , BEFORE S H RI VIKAS AWASTHY , JM AND S H RI RAJESH KUMAR , AM ./ ITA NO. 2252 / MUM/ 2019 ( / ASSESSMENT YEAR 2014 - 15 ) POONAM RAMESH SAHAJWANI 12, RAM JANKI, 356, LINKING ROAD, KHAR WEST, MUMBAI - 400 052 / VS. THE INCOM E TAX OFFICER (IT) WARD 4(2)(1) MUMBAI ( / APPELLANT) ( / RESPONDENT) . / PAN NO. AALPS 8477 L / APPELLANT BY : MS. RUTAJA N. PAWAR, AR / RESPONDENT BY : SHRI VODAL RAJ SINGH, DR / DATE OF HEARING: 14 .10. 2020 / DATE OF PRONOUNCEMENT: 23 .11 .2020 / O R D E R , PER VIKAS AWASTHY , JM : THIS APPEAL BY THE ASSESSEE IS DIRECT ED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 58, MUMBAI [IN SHORT THE CIT(A) ] DATED 07.03.2019 FOR THE ASSESSMENT YEAR 2014 - 15. 2. MS. RUTUJA N. PAWAR APPEARING ON BEHALF OF THE ASSESSEE NARRATING THE FACTS SUBMITTED THAT THE ASSESSEE HAD B OOKED A RESIDENTIAL FLAT IN A HOUSING PROJECT ROYAL ACCORD DEVELOPED BY M/S ANURADHA REAL ESTATE DEVELOPERS PVT. LTD DURING THE FINANCIAL YEAR PAGE | 2 ITA NO.2252/ MUM/ 2019 POONAM RAMESH SAHAJWANI; AY 14 - 15 2012 - 13. THE TOTAL CONSIDERATION AT THE TIME OF BOOKING OF THE FLAT WAS FIXED AT 1,05,60,000/ - . THE ASSESSEE PAID 5 LACS ON THE DATE OF BO O KING VIDE CHEQUE DATED 14.07.2012 AND PAID ANOTHER SUM OF 22,50,000/ - BY WAY OF CHEQUE DATED 17.08.2012. TO SUPPORT HER CONTENTION S , THE LEARNED AR REFERRED TO LETTER DATED 2 ND AUGUST 2012 FROM M /S ANURADHA REAL ESTATE DEVELOPERS PVT. LTD. AT PAGE 117 OF THE PAPER BOOK. THE LEARNED AR POINTED THAT A PERUSAL OF ALLOTMENT LETTER WOULD SHOW THAT THE DEVELOPER HAS ACKNOWLEDGED RECEIPT OF 27,50,000/ - PAID BY THE ASSESSEE IN 2012 AND HAS REITERATED TOT AL CONSIDERATION OF THE FLAT AT 1,05,60,000/ - AS MENTIONED IN THE INITIAL LETTER DATED 2 ND AUGUST, 2012. THE ALLOTMENT LETTER ALONGWITH PAYMENT SCHEDULE FOR THE AFORESAID FLAT DATED 9 TH DECEMBER 2013 IS AT PAGE 98 - 102 OF THE PAPER BOOK. THE LEARNED AR FUR THER REFERRED TO AGREEMENT FOR SALE OF THE FLAT AT PAGE 12 TO 97 OF THE PAPER BOOK. THE LEARNED AR POINTED THAT ON PAGE 85, THE DEVELOPER HAS AGAIN ACKNOWLEDGED THAT TWO CHEQUES DATED 14/07/2012 & 17/8/2012 WERE RECEIVED FROM THE ASSESSEE. THE LEARNED AR S UBMITTED THAT THE SALE AGREEMENT WAS EXECUTED ON 07/02/2014, THE CONSIDERATION WAS FIXED DURING THE FINANCIAL YEAR 2012 - 13 WHEN THE FLAT WAS BOOKED . THE LEARNED AR SUBMITTED THAT THE STAMP DUTY VALUATION IN AUGUST 2012 WHEN THE FLAT WAS BOOKED WAS 98,68,000/ - . THE LEARNED AR REFERRED TO THE REPORT OF REGISTER ED VALUER AT PAGE 119 OF THE PAPER BOOK. THE LEARNED AR SUBMITTED THAT THE PROVISO TO SUB CLAUSE (B) TO SECTION 56(2)(VII) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER THE ACT) PROVIDES THAT WHER E THE DATE OF 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 PAGE | 3 ITA NO.2252/ MUM/ 2019 POONAM RAMESH SAHAJWANI; AY 14 - 15 THE PURPOSE OF SUB CLAUSE (B). IN THE PRESEN T CASE, THE CONSIDERATION FOR PURCHASE OF FLAT WAS MUTUALLY AGREE IN AU GUST, 2012 WHEN THE ASSESSEE HAD BOOKED THE FLAT. THE FLAT NUMBER AND THE TOTAL CONSIDERATION WAS SPECIFIED IN THE BOOKING LETTER. THUS, THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE PROVISO TO SECTION 56(2)(VII) (B) OF THE ACT. 3. PER CONTRA, SHRI UODAL RAJ SINGH, REPRESENTING THE DEPARTMENT VEHEMENTLY DEFINED THE IMPUGNED ORDER AND PRAYED FOR DISMISSING THE APPEAL OF THE ASSESSEE. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED TH AT THE ALLOTMENT LETTER OF THE FLAT WAS ISSUED TO THE ASSESSEE IN DECEMBER 2003 AND THE REGISTERED SALE AGREEMENT WAS EXECUTED ON 7 TH FEBRUARY 2014. THUS, BOTH THE DOCUMENTS WERE EXECUTED IN FAVOUR OF THE ASSESSEE D URING THE FINANCIAL YEAR 2013 - 14 RELEVANT TO THE ASSESSMENT YEAR 2014 - 15 . THE OWNERSHIP OF THE FLAT WAS PASSED ON TO THE ASSESSEE IN THE PERIOD RELEVANT TO ASSESSMENT YEAR 2014 - 15. BY MERELY MAKING ADVANCE PAYMENT, THE ASSESSEE DOES NOT GET THE OWNERSHIP RIGHT IN THE F LAT. 4. WE HAVE HEA RD THE SUBM ISSIONS MADE BY R IVAL SIDES AND HAVE EXAMINE D THE ORDERS OF LOWER AUTHORITIES AND THE DOCUMENTS ON WHICH THE LEARNED A R HAS PLACED RELIANCE. THE SOLIT ARY ISSUE RAISED BY THE ASSESSEE IN PRESENT APPEAL IS AGAINST INVOKING OF THE PROVISIONS OF SECTION 56(2)( VII)(B)(II) OF THE ACT TO MAKE THE ADDITION OF 7,91,500/ - . 5. UNDISPUTEDLY, THE ASSESSEE BOOKED A FLAT IN BUILDING ROYAL ACCORD DEVELOPED BY M/S ANURADHA REAL ESTATE DEVELOPERS (P) LTD. IN AUGUST, 2012 AND PAID THE BOOKING AMOUNT. THIS FACT IS EVIDENT FRO M PAGE | 4 ITA NO.2252/ MUM/ 2019 POONAM RAMESH SAHAJWANI; AY 14 - 15 THE BOOKING LETTER DATED 2 ND AUGUST, 2012 AT PAGE 117 OF THE PAPER BOOK. A PERUSAL OF THE SAID LETTER ALSO REVEALS THAT THE FLAT NO. 1803 ON 18 TH FLOOR WAS PROPOSED TO BE ALLOTTED TO THE ASSESSEE . THE TOTAL PURCHASE CONSIDERATION FOR THE FLAT WAS AGREED AT 1,05,60,000/ - . THUS, CONSIDERATION AMOUNT FOR PURCHASE OF FLAT WAS MUTUALLY AGREED BETWEEN THE PARTIES AT THE TIME OF BOOKING OF THE FLAT ITSELF. THE ASSESSING OFFICER INVOKED THE PROVISIONS OF SECTION 56(2)(VII)(B)(II) OF THE ACT TO MAKE ADDITION OF 7,9 1,500/ - I.E. THE DIFFERENCE BETWEEN THE MARKET VALUE AND PURCHASE CONSIDERATION ON THE DATE OF REGISTRATION OF SALE. BEFORE PROCEEDING FURTHER, IT WOULD BE RELEVANT TO REFER TO THE RELEVANT PROVISION S OF SECTION 56(2) OF THE ACT. THE SAME ARE REPRODUCED HE REIN BELOW: - INCOME FROM OTHER SOURCES 56 . XXXXXXX. (2) IN PARTICULAR, AND WITHOUT PREJUDICE TO THE GENERALITY OF THE PROVISIONS OF SUB - SECTION (1), THE FOLLOWING INCOMES, SHALL BE CHARGEABLE TO INCOME - TAX UNDER THE HEAD 'INCOME FROM OTHER SOURCES', NAME LY: (I) XXXXX (IA) XXXXX (IB) XXXXX (IC) XXXXX (ID) XXXXX PAGE | 5 ITA NO.2252/ MUM/ 2019 POONAM RAMESH SAHAJWANI; AY 14 - 15 (II) XXXXX (III) XXXXX (IV) XXXXX (V) XXXXX (VI) XXXXX (VII) WHERE AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY RECEIVES, IN ANY PREVIOUS YEAR, FROM ANY PERSON OR PERSONS ON OR AFTER THE 1ST DAY O F OCTOBER, 2009 BUT BEFORE THE 1ST DAY OF APRIL, 2017, (A) XXXXX (B) ANY IMMOVABLE PROPERTY, (I) XXXXX (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 VA LUE 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 T HE AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF THIS SUB - CLAUSE: PAGE | 6 ITA NO.2252/ MUM/ 2019 POONAM RAMESH SAHAJWANI; AY 14 - 15 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 CASH ON OR BEFOR E THE DATE OF THE AGREEMENT FOR THE TRANSFER OF SUCH IMMOVABLE PROPERTY; 6. A BARE PERUSAL OF FIRST PROVISO TO SUB - CLAUSE (B) MANDATES THAT WHERE THE DATE OF AGREEMENT FIXING THE AMOUNT OF CONSIDERATION OF IMMOVABLE PROPERTY AND THE DATE OF REGISTRATION IS N OT THE SAME , T HE STAMP DUTY VALUE ON THE DATE OF AGREEMENT SHA LL BE TAKEN FOR THE PURPOSE OF S UB CLAUSE (B) . IN THE PRESENT CASE, THE SALE CONSIDERATION OF THE FLAT WAS AGREED ON 2 ND AUGUST, 2012. IT IS PERTINENT TO MENTION HERE THAT THE TERM AGREEMENT USED IN PROVISO TO SUB - CLAUSE (B) DOES NOT NECESSARILY MEAN A DOCUMENT WITH THE TITLE AGREEMENT. TH IS WOULD ALSO INCLUDE A FIRST DOCUMENT BY WHATEVER NAME CALL ED , THAT REFLECTS THE INTENTION OF THE PARTIES MUTUALLY AGRE EING TO FIX AMOUNT OF CONSIDERATION. IN OUR CONSIDERED VIEW , IN THE INSTANT CASE THE PROVISO TO S UB C LAUSE (B) OF SECTION 56(2)(VII) OF THE ACT GETS ATTRACTED AND THE STAMP DUTY VALUE AS ON THE DATE OF BOOKING THE FLAT WHEREIN THE CONSIDERATION WAS MUTUALLY AGREED BETWEEN THE PARTIES WAS FIXED SHALL BE TAKEN FOR THE PURPOSE OF SUB CLAUSE (B). THE ASSESSEE HAS ALSO FILED A REPORT FROM THE REGISTERED VALUER , (PAGE 119 OF THE PAPER BOOK) ACCORDING TO WHICH THE STAMP DUTY VALUE OF THE FLAT IN AUGUST, 2012 HAS BEEN DETERMINED AT 98,68,000/. WE FIND MERIT IN THE CONTENTION S RAISED BY THE ASSESSEE. PAGE | 7 ITA NO.2252/ MUM/ 2019 POONAM RAMESH SAHAJWANI; AY 14 - 15 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS CONTENDED THAT THE OWNERSHIP OF FLAT WAS TRANSFERRED IN ASSESSMENT YEAR 2014 - 15 UPON EXECUTION OF REGISTERED AGREEMENT TO SELL, THEREFORE THE MARKET VALUE ON THE DATE OF TRANSFER OF OWNERSHIP SHOULD BE CONSIDERED. WE DO NOT CONCUR WITH THIS SUBMISSION OF THE LEARNED DEPARTMENTAL REPRESENTATIVE. THE PROVISION OF SECTION 56(2)(VII)(B) OF THE ACT DOES NOT ENVISAGE TRANSFER OF OWNERSHIP FOR DETERMINATION OF STAMP DUTY VALUE. THE DETERMINATION OF STAMP DUTY VALUE HINGES ON THE DATE OF AGREEMENT FIXING THE AMOUNT OF CONSIDERATION FOR TRANSFER OF IMMOVABLE PROPERTY. IN THE PRESENT CASE, THE DATE IS AUGUST 2, 2012. I.E. THE DATE OF BOOKING THE FLAT. AT THE TIME OF BOOK ING FLAT THE TOTAL AMOUNT OF CONSIDERATION WAS FIXED BETWEEN THE PARTIES. THE DATE OF TRANSFER OF TITLE IN IMMOVABLE PROPERTY HAS NO SIGNIFICANCE UNDER THE PROVISIONS OF SECTION 56(2)(VII)(B) OF THE ACT. 8. IN THE R ESULT, IMPUGNED ORDER IS SET ASIDE AND APPEA L OF THE ASSESSEE IS ALLOWED . ORDER P RONOUNCED IN THE OPEN COURT ON __ MON DAY THE 23 RD DAY OF NOVEMBER 2020 . SD/ - SD/ - ( / RAJESH KUMAR ) ( / VIKAS AWASTHY ) ( / ACCOUNTANT MEMBER) ( / JUDICIAL MEMBER ) , / MUMBAI, DATED: 23 . 11 .2020 , . / SUDIP SARKAR, SR.PS PAGE | 8 ITA NO.2252/ MUM/ 2019 POONAM RAMESH SAHAJWANI; AY 14 - 15 / 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// / (ASSTT. REGISTRAR) , / ITAT, MUMBAI