LILO SATRAMDAS BALLANI ,MUMBAI V. INCOME TAX OFFICER WARD16(2)(1), MUMBAI

ITA 4332/MUM/2025

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The case involves Lilo Satramdas Ballani, the appellant, who contested the valuation of a property purchased in 2009, which was assessed in 2017-18. The property, originally booked as Flat No. 1403, was later registered as Flat No. 1002 due to issues with the builder's project. The Income-tax Officer (ITO) assessed the property based on its stamp duty value in 2016, leading to a significant tax addition. The Commissioner of Income-tax (Appeals) upheld this assessment, rejecting the appellant's claim that the valuation should be based on the year 2009. The Tribunal, however, accepted the appellant's argument, acknowledging the developer's error in the allotment and directed a re-assessment based on the 2009 valuation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790908 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Appeal Filed On: 01-07-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDRA MOHAN
• Assessee Lawyers: TEJAS CHANDARANA
• Keywords: Opportunity of being heard; Additional evidence; Sale consideration of property below Jantri Value
• Section: 143(3); 56(2)(vii)(b)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A”, MUMBAI BEFORESHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A No.4332/Mum/2025 (Assessment Year: 2017-18) Lilo Satramdas Ballani 401, Veena Tower, OppColaba Post Office, Colaba, Mumbai- 400005 PAN : AAFPB0346K vs Income-tax Officer, Ward 16(2)(1), Mumbai Room NO.443, Aayakar Bhavan Maharishi Karve Road, Mumbai- 400 020 APPELLANT RESPONDENT Assessee by : Shri Tejas Chandarana Respondent by : Shri Surendra Mohan (SR DR) Date of hearing : 27/11/2025 Date of pronouncement : 01/12/2025 O R D E R Per: Anikesh Banerjee (JM): The instant appeal of the assessee was filed against the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter, ‘Ld.CIT(A)] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) for the Assessment Year 2017-18, date of order 20/05/2025. The impugned order was emanated from the order of the Learned Income-tax Officer, Ward 16(2)(4), Mumbai (in short, ‘Ld.AO’) passed under section 143(3) of the Act, date of order 22/12/2019. Printed from counselvise.com 2 ITA No.4332/Mum/2025 Lilo Satramdas Ballani 2. The brief facts of the case are that the assessee e-filed the return of income declaring a total income of Rs.9,32,260/-. Subsequently, the case was selected for limited scrutiny under CASS, and the assessment was completed under section 143(3) of the Act. During the assessment proceedings, the Ld. AO observed that the assessee had purchased a property for Rs.48,00,000/-, whereas the stamp duty valuation of the said property, as per the registered agreement dated 22/08/2016, was Rs.1,73,65,600/-. On perusal of the agreement, the Ld. AO noted that the assessee had purchased Flat No. 1002 in the building “Modern Enclave,” Agripada, Mumbai–400011, from “Vighnaharta Builders & Projects Pvt. Ltd”. The assessee submitted that the flat was originally booked in 2009, supported by payments of Rs.20,00,000/- on 26/08/2009 and Rs.28,00,000/- on 28/10/2009, as evidenced by bank statements placed in the APB. The Ld. AO further observed that while the registration was carried out for Flat No. 1002, the developer had initially issued an allotment letter dated 08/09/2009 for Flat No. 1403 on the 14th floor, admeasuring 700 sq. ft. (super built-up area). However, due to certain issues in the builder’s project, an amended allotment letter dated 01/04/2016 (placed at APB page 24) was issued, wherein the developer allotted Flat No. 1001 in place of Flat No. 1403, with the same area of 700 sq. ft. in the same project. Ultimately, the registration came to be executed for Flat No. 1002, again admeasuring the same area of 700 sq. ft. In the impugned assessment order, the Ld. AO adopted the stamp duty valuation as on 22/08/2016. The assessee, on the other hand, contended that the valuation of the property should be adopted with reference to the year 2009, relevant to A.Y. 2010-11, in view of the Explanation to section 56(2)(vii)(b) of the Act. However, the Ld. AO rejected the claim and made an addition of Rs.1,25,65,000/-, being the Printed from counselvise.com 3 ITA No.4332/Mum/2025 Lilo Satramdas Ballani difference between the stamp duty value and the declared purchase consideration. The aggrieved assessee preferred an appeal before the Ld. CIT(A). After considering the documents furnished, the Ld. CIT(A) dismissed the appeal, observing that the assessee had booked multiple flats with the intention of evading tax, and therefore the change in flat number could not be accepted as a genuine transaction. The Ld. CIT(A) further concluded that since Flat No. 1002 was allotted only on 01/04/2016, the valuation of the earlier cancelled flat could not be adopted. Accordingly, the Ld. CIT(A) upheld the order of the Ld. AO. Being aggrieved, the assessee has now filed an appeal before us. 3. The Ld.AR argued and filed a paper book containing pages 1 to 62, which is kept on record. The Ld.AR filed an additional evidence related to confirmation from developer and allotment letter dated 20/04/2020, with that the affidavit of the assessee related to the reasons for change in flat number. The affidavit is duly affirmed by the assessee and executed on 30/09/2025. The copy of the amended allotment letter dated 20/04/2020 is reproduced as below:- Printed from counselvise.com 4 ITA No.4332/Mum/2025 Lilo Satramdas Ballani 4. The Ld.DR argued and stated that the assessee had booked the Flat No.1403 and made the payment in respect of this flat in 2009. When the flat was cancelled by them, the builder allotted a different flat, so the entire agreement was duly cancelled. So the addition upheld by the Ld.CIT(A) should be sustained. 5. We heard the rival submissions and examined the documents available on record. We find that the assessee had originally booked Flat No. 1403 in the year 2009. The Ld. AR submitted that due to certain complications in the builder’s project, the developer was unable to allot Flat No. 1403 to the assessee. Subsequently, an amended letter of allotment was issued on 01/04/2016, Printed from counselvise.com 5 ITA No.4332/Mum/2025 Lilo Satramdas Ballani whereby the developer allotted Flat No. 1002, having the same carpet area of 700 sq. ft., in the very same project. However, in the said allotment letter, the mention of Flat No. 1001 was a mere typographical error committed by the developer, which the developer has already admitted in the letter dated 20/04/2020. The payment of Rs.48,00,000/- made by the assessee in 2009 has been duly acknowledged and fully adjusted against the new allotment. No additional payment was made, nor was there any variation in the area of the flat. Considering the totality of facts, we hold that the assessee is squarely protected by the Explanation to section 56(2)(vii)(b) of the Act. Accordingly, the valuation is required to be adopted with reference to the financial year 2009–10 relevant to A.Y. 2010–11. In our considered view, the assessee is entitled to the benefit of the said Explanation. The assessee has furnished additional evidence in the form of an affidavit and the developer’s letter dated 20/04/2020. We admit the additional evidence and restore the matter to the file of the Ld. Assessing Officer for the limited purpose of verifying the said letter, the agreement, and the assessee’s contention that the stamp duty valuation of Flat No. 1002 should be considered with reference to A.Y. 2010–11. Needless to say, the assessee shall be afforded a reasonable opportunity of being heard before the completion of the fresh assessment. The assessee, in turn, is expected to remain diligent and co-operative during the remand proceedings. Printed from counselvise.com 6 ITA No.4332/Mum/2025 Lilo Satramdas Ballani 6. In the result, the appeal of the assessee bearing ITA No.4332/Mum/2025 is allowed for statistical purpose. Order pronounced in the open court on 01/12/ 2025 sd/- sd/- (VIKRAM SINGH YADAV) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 01/12/2025 Pavanan Copy of the Order forwarded to: 1. अपीलाथ /The Appellant , 2. ितवादी/ The Respondent. 3. आयकरआयु\u0014 CIT 4. िवभागीय ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, MUMBAI 5. गाड\u0019फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI Printed from counselvise.com "