REKHA KISHORE SHAH (LEGAL HEIR OF KISHOR DHIRAJLAL SHAH ),MUMBAI V. ACIT-42(1)(1), MUMBAI

ITA 4409/MUM/2025

AI Insights

The case involves Rekha Kishor Shah, the legal heir of Kishor Dhirajlal Shah, who appealed against the order of the Commissioner of Income Tax Appeals, which confirmed the reassessment proceedings under section 147 of the Income Tax Act, 1961. The reassessment was based on the difference between the purchase value and the stamp duty value of an immovable property, leading to an addition of Rs. 21,62,000 under section 56(2)(vii)(b). The Tribunal examined whether the date of allotment or the date of registration should be considered for the application of section 56(2)(vii)(b) and concluded that the date of allotment is relevant, as per various judicial precedents and CBDT circulars.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 824835 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2017-2018
• Appeal Filed On: 07-07-2025
• Other Referred Cases: GKN Driveshafts (India) Ltd., Vembu Vaidyanathan v PCIT, PCIT vs Vembu Vaidyanathan, Ms. Madhu Kaul vs CIT, Vinod Kumar Jain vs CIT, Richa Bagrodia vs DCIT, ACIT vs Smt. Vandana Rana Roy, Anita D. Kanjani vs ACIT, Meena A Hemnani vs ITO, Mr. Nitin Parkash vs DCIT, A Suresh Rao v CIT, CIT v. Jitendra Mohan, CIT v. Jindas Panchand Gandhi, CIT v. Anilaben Upendra Shah, ITO vs Monish Kaan Tahilramani, Vijay Harnilapurkar v. Dy. CIT, Sneha Bimal Parekh v. CIT, Shri Keyur Hemant Shah v ACIT, Himmatbhai M. Patel v ITO, PCIT vs. Thomson Press (India) Ltd., Raghavendra Ramakrishna Naik vs ITO, ITO v Rajni D. Saini, Mr. Sajjanraj Mehta v ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANNAVARAN KOSURI
• Assessee Lawyers: MALAV P. SHETH
• Keywords: Condonation of delay; Additional evidence; Reassessment proceedings; Sale consideration of property below Jantri Value; Fair market value; Onus to prove; Reopening of assessment; Valuation report
• Section: 147; 148; 142(1); 54; 56(2)(vii)(b); 56(2); 54F

Judgement Text

" आयकर अपीलीय अिधकरण याय पीठ मुंबई म\u0015। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JM & SHRI ARUN KHODPIA, AM I.T.A. No. 4409/Mum/2025 (Assessment Year: 2017-18) Rekha Kishor Shah (Legal Heir of Kishor Dhirajlal Shah) 901 Hiralaya, J V P D Scheme, Vile Parle (West), Mumbai- 400049 PAN: AAPPS2948L Vs. ACIT-42 (1)(1), Mumbai, Kautilya Bhavan, Bandra East, Mumbai- 400051 Assessee -अपीलाथ\u0007 / Appellant : Revenue - \b यथ\u0007 / Respondent Assessee by : Shri Malav P. Sheth Revenue by : Shri Annavaran Kosuri, Sr. AR Date of Hearing : 23.12.2025 Date of Pronouncement : 30.12.2025 O R D E R Per Arun Khodpia, AM: The captioned appeal is filed by the assessee, directed against the order of Commissioner of income tax appeals (for short “ld. CIT(A)”), NFAC, New Delhi dated 09.01.2025, for the assessment year (AY) 2017-18, which in turn arises from the assessment order dated 30.05.2023, passed by Assistant Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 2 Commissioner of Income Tax, Circle-42(1)(1), Mumbai (for short “Ld. AO”)) under section 147 of the Income Tax Act, 1961 (for Short “The Act”). 2. The grounds of appeal raised by the revenue in the present appeal reads as under: “Being aggrieved by the order of the learned Commissioner of Income Tax (Appeals), NFAC, Delhi, this appeal petition is submitted on the following grounds which it is prayed may be considered independently and without prejudice to one another- 1. Reopening of assessment u/s 147 is bad-in-law. 1.1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the reassessment proceedings as valid without appreciating that the learned AO had not disposed off the specific objections raised (Year of purchase & ownership of the three Galas) by the appellant that the reasons for alleged against reasons recorded for reopening while passing order u/s 148A(d). Thus the learned CIT(A) erred in not appreciating that this being in gross violation of the principles laid down by the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd., the reopening of assessment is bad in law and needs to be quashed. 1.2. Without prejudice to the above, on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming initiation of reassessment proceedings u/s, 147 as valid merely based on the incorrect information available on record without due application of mind to the facts of the case. 1.3. Without prejudice to the above and strictly without admitting, on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating that initiation of reopening proceedings u/s 148A/148 for the year in which the agreement is registered and not for the year of allotment of the said properties can at the most be considered to be a debatable issue. Thus the learned AO erred in not appreciating that no reopening proceedings can be initiated u/s 148A/ 148 on account of change in opinion, thereby the entire additions made must be deleted. 2. Addition u/s. 56(2) (vii)(b) of Rs. 21,62,000/- should be deleted. Without prejudice to the above and without admitting, On the facts and circumstances of the case and in law, the learned AO erred in not appreciating that the appellant had acquired the impugned immovable property vide allotment letter dated 20-04-2011 whereas the agreement of sale and registration was done on 31-03-2017. Thus the learned AO erred in applying the provisions of section 56(2)(vii) (b) to AY 2017-18 instead in AY 2012-13 without appreciating the proviso to the said section. Thus additions made of Rs 21,62,000/- is bad-in-law and needs to be deleted. Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 3 The appellant craves leave to add, to amend, alter/delete and/or modify the above grounds of appeal on or before the final hearing.” 3. It is informed that the instant appeal is defective on the ground of limitation being filed with a delay of 100 days. A condonation petition along with affidavit signed by the assessee, stating the reasons for delay are filed before us. It is explained that the all the notices u/s 250 of the Act were served to the assessee and have been duly responded, however the order was not served on the registered email Id, neither any physical copy was served to assessee. Passing of CIT(A)’s order dated 09-01-2025 was came to the notice of assessee, only on receipt of communication from JAO vide letter dated 25.06.2025. It is mentioned that the delay was occurred solely due to the fact that the impugned order was never served on the assessee. It is also submitted that as per various decisions merely uploading the communications on e-portal does not constitute a valid service. In view of such explanations, it is prayed to condone the delay in filing of appeal. Considering the aforesaid request of the assessee, having sufficient unintentional / undeliberate reasons for delay beyond the control of assessee, in absence of any serious objection by the revenue, following the judicial principle to deal with the matter of condonation of delay with a liberal and justice-oriented approach, we find it appropriate to condone the delay in present matter to decide the same on its merits. The delay in filing of present appeal thus have been condoned. Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 4 4. Brief Facts of the case, as per Para 3 & 4 of the CIT(A) are extracted as under: “3. Brief facts of the case as per the order of of the AO are as under:- The appellant has filed his return of income for A.Y. 2017-18 on 11.10.2017 showing total income of Rs. 2,57,25,980/-. The case was selected on the following issue as under:- \"Information was received from the DIT (I&CI), Mumbai. As per the information received, the Directorate has collected data from various Sub Registrar offices pertaining to Mumbai and came across many instances of possible infringement of section 50C/43CA & 56(2)(x) of the Income Tax Act, 1961. In the instant case, that the assessee has purchased an immovable property wherein the assessee has transacted not as per fair market value of the property and as such violated the provisions of the Act. The assessee has failed to disclose true, correct and fair details of the financial transactions entered so as to determine/ assess the correct income of the assessee for the year under consideration. The information received was as under:- Purchase Value Stamp Duty Value Difference Rs. 30,00,000/- Rs. 51,62,000/- Rs. 21,62,000/- Rs. 30,00,000/- Rs. 51,62,000/- Rs. 21,62,000/- Rs. 30,00,000/- Rs. 51,62,000/- Rs. 21,62,000/- Total Rs. 90,00,000/- Rs. 1,54,86,000/- Rs. 64,84,000/- The assessment was completed u/s 147 of the Act on 30.05.2023 at the income of Rs. 2,78,87,980/- after making addition of Rs. 21,62,000/-on account of purchase of immovable property u/s 56(2)(vii)(b). Aggrieved from the above order appellant has filed the present appeal. 4. The findings of the AO are reproduced as under:- \"6. The explanation of the assessee is considered and is found to be not acceptable. The assessee vide notice u/s 142(1) dt 17.05.2023, as per proviso to section 56(2)(vii) (b) was asked to submit the details of the ready reckoner Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 5 rate of the property prevalent at the time of agreement for the purpose of ascertaining the stamp value of the property In response to the same, the assessee submitted a page of the ready reckoner which is from a magazine of a developer The same was found to be not acceptable and accordingly a final show cause dt 23.05.2023 was sent to the assessee to prove the authenticity of the ready reckoner submitted and also as to why the difference of the purchase consideration and the prevailing stamp duty value be not added back to the total income. In response to the same, the assessee vide submission dt. 26.05.2023, submitted a Detail report of the unit through an advocate and also submitted the extract of a magazine highlighting the ready reckoner rate. The submission made is found to be not acceptable as the valuation report should have been obtained from a Government approved valuer and also the assessee should have submitted the ready reckoner as per government records/ website. The Ready reckoner submitted by the assessee lacks authenticity. Also, on perusal of the submissions made, it is seen that the assessee has made payment in 2011 and the said property was registered in AY 2017-18. The assessee submitted certain details but failed to explain as to why the agreement was registered in FY 2016-17. Merely stating that the property was under construction is not the ground for deferring the registration and payment of stamp duty on the properties. Though the assessee had made major part of the payment for purchase, the onus to prove the genuineness of deferring the registration is on the assessee. Further, the commencement certificate is received by the developer vide CE/5355/WS/AK dated 9th June, 2016. As the developer did not have any commencement certificate to develop the property, there was no right with the developer to either allot or sell the property. Further, in the so called allotment letter, there is mention of only Rs. 10,00,000/- paid by the deceased assessee whereas as per registered agreement, an amount of Rs.20,00,000/- was paid on 23.04.20114. In the instant case, though the payment is made in 2011 and an allotment letter is Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 6 issued to the deceased assessee, the mystery remains unsolved as to how the allotment letter is issued before receiving the commencement certificate. 7. In vide of the above details, it clearly shows that the assessee has entered into a transaction of purchase of immovable property at Rs. 51,62,000/-, but the stamp value of the said property was at Rs.30,00,000/-. Therefore, the assessee has contravened the provisions of section 56(2)(vii) (b) of the Income Tax Act and in the absence of any documentary evidence or explanation, an amount of Rs. 21,62,000/- is added u/s.56(2)(vii) (b) of the IT Act. Penalty proceedings u/s.270A of the Income Tax Act are initiated separately for under reporting of income.\"” 5. Being aggrieved with the aforesaid addition u/s 56(2)(vii)(b) for Rs. 21,62,000/- by the Ld. AO, assessee preferred an appeal before the Ld. CIT(A), wherein the plea of assessee to accept the date of allotment (20.04.2011) for the purpose of consideration u/s 56(2)(vii)(b) of the Act, was denied by the Ld. CIT(A) even though the major part of consideration i.e. Rs, 25,50,000/- out of Rs. 30,00,000/- was paid in April & Mat 2011 to the builder as per the terms of allotment letter. The observations of Ld. CIT(A) while dismissing the contentions of the assessee were as under: “6. I have examined and perused the order of the AO, the submissions of the appellant and the documents available on record. There is no ambiguity viz a viz, the facts that payment of Rs. 25,50,000/-has been made by the purchaser in 2011 but this is also a fact that during the course of assessment proceedings the appellant was asked to submit the details of the ready reckoner rate of property prevalent at the time of agreement for the purpose of ascertaining the stamp value of the property, which was not furnished. During the appellate proceedings a valuation report from the government valuer is furnished, which was not before the AO for verification and Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 7 examination. It is also a fact that no application under rule 46A has been filed for admittance of additional evidence. 6.1 This is also a fact that there is no explanation furnished for a long gap between the payment made and the actual registration of the document. 6.2 In the submissions, the appellant has not furnished any explanation on the observations of the AO, that commencement certificate is received by the developer on 9th June 2016 and that since the developer did not have any right to develop the property, there was no right with the developer t either allot or sell the property in 2011, on which date the appellant claims to have made the payment of substantial portion of the total cost, being 85% of the total cost. 6.3 Another anomly apparent from the submissions of the appellant is that balance amount of Rs. 4,50,000/- alongwith other charges was paid on 11/05/2017, whereas the property was registered with the registrar of Immovable properties on 31.03.2017, i.e. prior to the date of making the complete payment. The said registration document is silent on the issue of balance payment of the cost of purchase of the property. This in itself is an abnormality. No builder will make the registration of the property, without receiving the complete payment am 6.4 After analyzing the submissions of the appellant, I am of the view that the appellant has failed to clarify/proove the stamp duty valuation of the property on the date of the said agreement/allotment letter, on which date the developer could not have legally issued the allotment letter/or have entered into such an agreement. This means that there is no error in the adopting of the stamp duty value by the AO as on the date of registration of the property. 6.5 Keeping in view the above observations, the addition of Rs. 21,62,000/- u/s 56(2) (vii) (b) is confirmed and the 1 and 3 ground of appeal is rejected.” Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 8 6. To challenge the aforesaid findings of Ld. CIT(A), assessee is in appeal before us. 7. At the outset, Ld. Authorised Representative of the assessee (for Short “ld. AR”) submitted that, in present matter the property was allotted to assessee by the builder on 20.04.2011 in terms of allotment letter of the even date. Accordingly, assessee had paid the major portion of consideration in the month of April and May 2011 itself. However, the registration of property could take place in AY 2017-18 only. Ld. AO doubted and placed the onus on assessee to prove the genuineness of deferment in registration. It also doubted by the revenue that how the allotment letter has been issued before the receipt of commencement certificate by the developer on 09.06.2016. Ld. AR submitted that the issue is now squarely covered by various decisions that the date of the allotment letter, supported with part payments in terms of said allotment letter would be relevant and not the date of registration of sale deed of the property u/s 56(2)(vii)(b) of the Act. It is also submitted that the provisions of section 56(2)(vii)(b) can not apply on transaction with inadequate considerations prior to 01.04.2015, reference was made to CBDT Circular No 3/2014 dated 24.01.2014. Besides the CBDT circular, assessee also relied on the decisions furnished in the case law paper book, listed as under: Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 9 Sr. No. Particulars Pages From To Date of allotment relevant and not registration for 56(2)(viib) 25. Vembu Vaidyanathan v PCIT [2019] 101 taxmann.com 436 (Bombay) J134 J136 26. PCIT vs Vembu Vaidyanathan (2019] 108 taxmann.com 339 (SC) J137 J138 27. Ms. Madhu Kaul vs CIT [2014] 43 taxmann.com 417 (Punjab & Haryana) J139 J142 28. Vinod Kumar Jain vs CIT [2010] 195 Taxman 174 (Punjab & Haryana) J143 J147 29. Richa Bagrodia vs DCIT [2019] 103 taxmann.com 73 (Mumbai) J148 J151 30. ACIT vs Smt. Vandana Rana Roy I.T.A. NO.6173/M/2011 dated 07-11-2012 J152 J155 31. Anita D. Kanjani vs ACIT [2017] 79 taxmann.com 67 (Mumbai - Trib.) J156 J162 32. Meena A Hemnani vs ITΟ Ι.Τ.Α. Νο. 5998/M/2010 dated 17.01.2014 J163 J167 33. Mr. Nitin Parkash vs DCIT ITA No.817/mum/2015 dated 22.08.2022. J168 J178 34. A Suresh Rao v CIT [2014] 41 taxmann.com 475 (Karnataka) J179 J189 35. CIT v. Jitendra Mohan [2007] 165 Taxman 524 (Delhi) J190 36. CIT v. Jindas Panchand Gandhi [2005] 279 ITR 552 (Guj.) J191 J192 37. 38. CIT v. Anilaben Upendra Shah [2003] 262 ITR 657/[2004] 134 Taxman 522 (Guj.) J193 J196 39. ITO vs Monish Kaan Tahilramani [2019] 109 taxmann.com 156 (Mumbai - Trib.) J197 J201 40. Vijay Harnilapurkar v. Dy. CIT [ITA No.6048 (M) of 2013] J202 J209 41. Sneha Bimal Parekh v. CIT [ITA No.5489 (M) of 2015] J210 J224 42. Shri Keyur Hemant Shah v ACITI TA. No.6710/Mum/2017 dated 02.04.2019 J225 J233 Sr. No. Particulars Pages From To Prior to AY 2014-15, section 56(2)(vii)(b) does not pertain to any \"inadequate consideration\" 43. CBDT CIRCULAR NO. 3/2014, DT. 24TH JAN,2014 J234 Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 10 44. ITO v Rajni D. Saini ITA NO.7120/MUM/2018 (A.Y.2014-15) dated 09.11.2022 J235 J241 45. Mr. Sajjanraj Mehta v ITO ITA No. 56/Mum/2021 (A.Y. 2014-15) dated 05.09.2022 J242 J252 8. To substantiate the contentions through grounds of appeal of a written Synopsis furnished by the Ld. AR is culled out here under for the sake of completeness: “3. GROUNDS OF APPEAL NO. 1: REOPENING OF ASSESSMENT U/S 147 IS BAD-IN-LAW 3.1. The grounds of appeal are reproduced below. 1.1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the reassessment proceedings as valid without appreciating that the learned AO had not disposed off the specific objections raised (Year of purchase & ownership of the three Galas) by the appellant against reasons recorded for reopening while passing order u/s 148A(d). Thus the learned CIT(A) erred in not appreciating that this being in gross violation of the principles laid down by the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd., the reopening of assessment is bad in law and needs to be quashed. 1.2. Without prejudice to the above, on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming initiation of reassessment proceedings u/s. 147 as valid merely based on the incorrect information available on record without due application of mind to the facts of the case. 1.3. Without prejudice to the above and strictly without admitting, on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating that initiation of reopening proceedings u/s 148A/148 for the year in which the agreement is registered and not for the year of allotment of the said properties can at the most be considered to be a debatable issue. Thus the learned AO erred in not appreciating Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 11 that no reopening proceedings can be initiated u/s 148A/ 148 on account of change in opinion, thereby the entire additions made must be deleted. On perusal of the reasons for reopening dated 26.06.2021 & 30.11.2021 (pages 3,4 & 8,9 of the paper book), The primary reasons are for applying the provisions of section 56(2)(x) on the differential of the purchase value and stamp duty value for the undermentioned properties aggregating to Rs 64,86,000/-. Purchase Value Stamp Duty Value Name in the Agreement Investment made by Rs. 30,00,000/- Rs. 51,62,000/- Shri. Kishor Dhirajlal Shah & Smt. Rekha Kishor Shah (Gala no. 406) Shri. Kishor Dhirajlal Shah Rs. 30,00,000/- Rs. 51,62,000/- Smt. Rekha Kishor Shah & Shri. Kishor Dhirajlal Shah (Gala no. 412) Smt. Rekha Kishor Shah. This is already assessed in the scrutiny assessment of Rekha Shah in her individual capacity. Rs. 30,00,000/- Rs. 51,62,000/- Smt. Rekha Kishor Shah & Shri. Kishor Dhirajlal Shah (Gala no. 413) 3.2. Thus, the relevant Gala owned by the appellant is only Gala no. 406. 3.3. The total purchase amount paid as per agreement dated 31.03.2017 is summarised below. Sr. No. Particulars Amount Paid (Rs) FY Remarks/facts evidenced by documents 1 Paid in April & May 2011 25,50,000 2011-12 a) Booking made and confirmed by letter of allotment dated 20/04/2011. b) 85% of the agreed value already paid in FY 2011-12 le at the time of booking. C) All important terms of contract such as Gala no., Purchase consideration, area, other charges to be paid mentioned and duly acknowledged by the parties concerned. Kindly 2 Service tax paid on 13-6-2012 80,704 2012-13 3 Stamp duty and registration fees paid on 29-3-2017 2,88,100 2016-17 4 Balance consideration and other charges 10,21,020 2017-18 Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 12 refer to pages 27 and 28 of the paper book. d) Copy of agreement dated 31.03.2017 enclosed at pages 114 to 150 of the paper book. Relevant clauses are clause 3.1 (pages 121 & 122), clause 13.3, (Page 131), Clause 28.1 (Page 144). e) It is also pertinent to note that last clause in the Letter of allotment - page 28 clearly mentions that the letter of allotment will be succeeded by the execution of agreement. f) Ledger of the seller in the books of the appellant for the period FY 2011- 12 to FY 2017-18- Enclosed at page 13. g) Copy of relevant bank statement showing payments made - enclosed at pages 14-16, h) Capital account, Balance sheet for the above periods along with schedules -enclosed at pages 18 to 26. Total 39,39,824 3.4. The above facts along with all the aforesaid documents were communicated unequivocally vide objections to the reopening made on 08-12-2021. Please refer to pages 11 to 12 of the paper book. 3.5. The learned AO disposed off the objections vide order dated 29-07-2022. Copy enclosed at pages 41 to 43 of the paper book. On perusal of the same, your Honours will note that none of the above objections have been rebutted by the learned AO. Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 13 Thus the decision of the Hon'ble Supreme Court in the case of GKN Drvieshaft would be applicable which renders the reopening proceedings as void ab initio. 3.6. Further as regards the incorrect reasons, the appellant submits that the reasons lack accuracy for the following issues. a) Gala no. 406 is only owned by the appellant. Other two Galas are owned by the spouse Smt Rekha Shah for which the entire consideration is paid by her. The name of the appellant is only for convenience purpose. b) Purchase value of Gala no. 406 is not just Rs 30 lakhs but Rs 39,39,824/- c) The year in which the applicability or otherwise of section 56(2) is to judged is the year in which the letter of allotment is received ie FY 2011-12 AY 2012-13 and not AY 2017-18. There are several decisions relied on by the appellant for the same. d) Further the learned AO applied the provisions of section 56(2) (viib) as opposed to section 56(2)(x) mentioned in the reasons for reopening. e) It is humbly submitted that section 56(2)(x) is inserted from 1.4.2017 and will not apply to said year. f) Further we hereby draw your honour's kind attention that sub- clause (ii) is inserted in section 56(2)(vii)(b) wef 01.04.2014. Earlier in AY 2011-12, clause (i) was the relevant clause which is considered only the cases wherein there was no consideration received. Thus in AY 2012-13, since the appellant has paid consideration for purchase of Gala no. 406, therefore it is not covered by section 56(2)(viib)(i). 3.7. Furthermore the appellant had also given valuation report of the said property during the course of the assessment and appellate proceedings which are enclosed at pages 61 to 72 wherein the value is arrived at considering the April 2012 as the relevant month. The Fair market value as per the stamp duty ready reckoner is less than Rs 30 lakhs, thereby envisaging no additions. However the learned AO ought not to accept for reasons best known to him. Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 14 3.8. During the course of the first appellate proceedings as well, the appellant has given one more Valuation report as per the registeres Government Valuer wherein the value as on 20-4-2011 is arrived at Rs 29,80,000/- which is less than the agreement value. Kindly refer to pages 81 to 93 of the paper book. 3.9. The appellant relies on the several decisions to the effect that reopening proceedings for incorrect reasons should be considered as void. Kindly refer to pages J70 to J133 of the legal paper book. 3.10. Reliance is placed on the decisions enclosed at pages J134 to J233 of the legal paper book to support that the date of letter of allotment is relevant date for the purpose of considering the applicability of section 56(2). Following few more decisions may be also referred to which are specific on date of allotment being the relevant date for the purpose of section 56(2)(viib). • Himmatbhai M. Patel v ITO ITA No. 1552/Ahd/2025-Ahd ITAT Dated 12.12.2025 • PCIT vs. Thomson Press (India) Ltd. [2025] 176 taxmann.com 237 (Delhi) [02-07-2025] • Raghavendra Ramakrishna Naik vs ITO ITA No. 2027/MUM/2025 dated 16.12.2025. 3.11. Reliance is placed on the decisions enclosed at pages J234 to J252 of the legal paper book to support that prior to AY 2014-15, section 56(2)(vii)(b) does not pertain to any \"inadequate consideration\" 4. GROUND OF APPEAL NO. 2: Addition u/s. 56(2)(vii) (b) of Rs. 21,62,000/- should be deleted. Without prejudice to the above and without admitting, On the facts and circumstances of the case and in law, the learned AO erred in not appreciating that the appellant had acquired the impugned immovable property vide allotment letter dated 20-04- 2011 whereas the agreement of sale and registration was done on 31-03-2017. Thus, the learned AO erred in applying the provisions of section 56(2)(vii)(b) to AY 2017- Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 15 18 instead in AY 2012-13 without appreciating the proviso to the said section. Thus, additions made of Rs 21,62,000/- is bad-in-law and needs to be deleted. Please refer to the synopsis given above in preceding paragraphs. 5. ADDITIONAL GROUND OF APPEAL NO. 1: Addition u/s, 56(2)(vii)(b) of Rs. 21,62,000/- should be deleted, Without prejudice to the above and without admitting, notice issued u/s 148 along with order issued u/s 148A(d) both dated 29-07-2022 is not in accordance with the provision of section 151A read with Notification No. 18/2022/F. No. 370142/16/2022-TPL dated 29-03-2022 as it is issued by Jurisdictional Assessing Officer (JAO) instead of Faceless Assessing Officer (FAO). Thus the said order passed u/s 148A(d) and notice issued u/s 148 both are invalid, bad-in-law rendering the consequent reassessment proceedings illegal. Accordingly the entire additions made thereunder must be deleted. 5.1. Reference may hereby be given to the letter filed requesting the admission of the said ground of appeal. 5.2. Reliance is placed on several decisions enclosed at pages J51 to J69 of the paper book 6. ADDITIONAL GROUND OF APPEAL No. 2: Without prejudice to the above and without admitting, on the facts and circumstances of the case and in law, the learned CIT(A) erred in applying the provisions of section 115BBE for computing the tax of Rs 12,97,200/- on the impugned addition of Rs 21,62,000/- made by the learned AO u/s 56(2)(vii) (b). The learned CIT(A) erred in not appreciating that the provisions of section 115BBE do not apply to the impugned additions u/s 56(2)(vii)(b). While computing tax on the additions made, the learned AO has considered section 115BBE. As mentioned above, on a without prejudice and without admitting basis, even if any addition is made u/s 56(2)(viib) then it can be made only in AY 2012-13 and further any tax, if any, to be levied can be only as per normal rates and not as per section 115BBE which is applicable from AY 2017-18” Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 16 9. Based on aforesaid submissions, it was the prayer by the Ld.AR, that as per various decisions by the Hon’ble Bombay High Court, other Hon’ble High Courts and ITAT Mumbai, it is now a well settled principle of law that in case of allotment of flats or house by Co-operative Society or other institutions whose scheme of allotment and consideration are similar to those of DDA, the date of allotment would be the date on which the purchasers of residential unit can be stated to have acquired the property, consequently the acquisitions of property in question would be the date on which the allotment letter was issued. The aforesaid view is supported with the view taken by Hon’ble Bombay High Court in the case of PCIT vs. Vembu Vaidyanathan (supra) wherein Hon’ble Bombay High Court, while interpreting the date of acquisitions had observed as under: “4. Having heard learned counsel for the parties, we notice that the CBDT in its circular No.471 dated 15th October, 1986 had clarified this position by holding that when an assessee purchases a flat to be constructed by Delhi Development Authority (\"D.D.A.\" for short) for which allotment letter is issued, the date of such allotment would be relevant date for the purpose of capital gain tax as a date of acquisition. It was noted that such allotment is final unless it is cancelled or the allottee withdraw from the scheme and such allotment would be cancelled only under exceptional circumstances. It was noted that the allottee gets title to the property on the issue of allotment letter and the payment of instalments was only a follow-up action and taking the delivery of possession is only a formality. Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 17 5. This aspect was further clarified by the CBDT in its later circular No.672 dated 16th December, 1993. In such circular representations were made to the board that in cases of allotment of flats or houses by co-operative societies or other institutions whose schemes of allotment and consideration are similar to those of D.D.A., similar view should be taken as was done in the board circular dated 15th October, 1986. In the circular dated 16th December, 1993 the board clarified as under: \"2. The Board has considered the matter and has decided that if the terms of the schemes of allotment and construction of flats/houses by the co-operative societies or other institutions are similar to those mentioned in para 2 of Board's Circular No.471, dated 15-10-1986, such cases may also be treated as cases of construction for the purposes of sections 54 and 54F of the Income-tax Act.\" It can thus be seen that the entire issue was clarified by the CBDT in its above mentioned two circulars dated 15th October, 1986 and 16th December, 1993. In terms of such clarifications, the date of allotment would be the date on which the purchaser of a residential unit can be stated to have acquired the property. There is nothing on record to suggest that the allotment in construction scheme promised by the builder in the present case was materially different from the terms of allotment and construction by D.D.A.. In that view of the matter, CIT appeals of the Tribunal correctly held that the assessee had acquired the property in question on 31st December, 2004 on which the allotment letter was issued.” 10. Similar, findings are offered under the various decisions referred (supra) further the aforesaid issues decided by ITAT Mumbai in the case of ITA no. 6651/Mum/2025 Meena Arjun Narang vs. ACIT, Mumbai wherein while deciding the identical issue, has held as under: “10. We have considered the rival submissions and perused the material available on record and the decisions of ITAT, Mumbai relied upon by the assessee. The only issue before us is, whether for the purpose of section 56(2)(x)(b) of the Act, the date of purchase of property for the purpose of stamp duty valuation should be date of Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 18 allotment or date of agreement. On this issue, we refer to the decision of ITAT, Mumbai in the case of Pinstripe Properties (P.) Ltd. v. DCIT (supra), wherein it is held by the Tribunal that where the assessee had paid part of consideration of flat, as per the terms of allotment through banking channels prior to execution of sale agreement, proviso to section 56(2)(x) should apply and no addition could be made to assessee’s income on the ground that stamp duty valuation of the said property was higher than properties price. The relevant findings of the Tribunal are extracted as under: “5. Heard both the sides and perused the material on record. During the course of assessment, the assessing officer noticed that assessee had purchased flat no. 204, B- Wing, \"Insignia\" building situated at Kalina, Santacruz (E), Mumbai for a consideration of Rs. 1,79,94,452/-. However, the value of the said property as per the stamp duty was determined at Rs. 2,73,41,000/-. Therefore, the assessing officer has added difference of Rs. 93,46,548/- in the total income of the assessee after applying the provisions of section 56(2)(x) of the Act. The assessee has submitted the copies of allotment letter of flat no. 1601 & 1701 dated 18.03.2011 wherein it is categorically stated that said flat has been allotted to the assessee and the assessee had paid Rs. 25,00,000/-. The assessee has also referred the allotment letter issued on 26.04.2016 placed in the paper book filed before us. We have perused the said allotment letter wherein it is specifically incorporated that due to change in Development Control Regulation for Greater Mumbai the builder was constrained to alter/amend the building plans. In view of the same assessee has been allotted another flat no. 204 on the 2nd floor in \"Insignia\" building in place of the flat no. 1601 & 1701 which was earlier allotted in A-Wing in \"Insignia\" building on 16th floor for a total consideration of Rs. 1,78,91,327/-. It is also mentioned in the allotment letter that acknowledgement of advance payment already made shall be considered and be treated to have been issued in respect of flat no. 204 in place of the earlier allotment. The assessee has also referred the copy of agreement for sale dated 11.09.2017 placed in the paper book. He also referred copy of bank statemet showing that part of the sale consideration has been paid through banking channel on 08.02.2011. After perusal of the copies of material placed on record, it is evident that assessee has brought before the lower authority that due to change in Development Control Regulation for Greater Mumbai, 1991, the builder was constrained to alter/amend the building plans and in view of the same the builder allotted another flat on a lower Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 19 floor. We find that this fact was not disproved by the assessing officer neither by making any enquiry from the builder nor brought any material on record to controvert the claim of the assessee. The allotment letter issued to the assessee dated 26.04.2016 substantiate that booking of old flat no. 1601 and 1701 was replaced by flat no. 204 because of the circumstances of change in Development Control Regulation as discussed (supra) in this order. We have also perused the provision of section 56(2)(x) of the Act applicable from A.Y. 2017-18, the relevant extract of the provision of section 56(2)(x) is reproduced as under: \"Section 56(2)(x) Where any person receives, in any previous year from any person or persons on or after the 1st day of April, 2017 (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 (A) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property, (4) for a consideration, the stamp duty value of such property as exceeds such consideration, if the amount of such excess is more than the higher of the Following amounts, namely (i) the amount of fifty thousand rupees, and (ii) the amount equal to ten per cent of the consideration: Provided that where 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 agreement may be taken for the purposes of this sub- clause: Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 20 Provided further that the provisions of the first proviso shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by way of an account payee cheque or an account payee bank draft or by use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed28, on or before the date of agreement for transfer of such immovable property:\" 6. The First Proviso to section 56(2)(x) of the Act as above provides that where 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 agreement may be taken. However, the Second Proviso provides that the provisions of first proviso shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by way of an account payee cheque or an account payee bank draft or by use of electronic clearing system through a bank account on or before the date of agreement for transfer of such immovable property. In the case of the assessee it has already made part payment of Rs. 25,00,000/- vide RTGS dated 08.02.2011 through banking channel as discussed (supra) in this order. Apart of this even it is settled issue as per the various decisions of ITAT, Mumbai that Stamp Duty Valuation as on date of allotment letter should be considered for purposes of section 56(2)(vii)(b) of the Act. We consider that the respective allotment letters issued to the assessee should be considered as \"Agreement to sell\" for the purpose of section 56(2)(x) of the Act. Since the assessee has paid the parts of consideration as per the terms and conditions of allotment through banking channels prior to the execution of sale agreement therefore, we consider that proviso to section 56(2)(x) should apply to the facts of the present case. Therefore, as per the proviso to section 56(2)(x) as discussed the date of agreement in the case of the assessee will be taken to 18.03.2011 and not 26.04.2016 since it is clearly demonstrated from the relevant supporting material that allotment of the new flat has been made to the assessee in continuation of the replacing of the earlier allotment which was changed because of the unavoidable circumstances of change in the Development Control Regulation. Therefore, we consider that decision of Id. CIT(A) in sustaining the addition made by the assessing officer is not justified. Accordingly, the ground of appeal of the assessee is allowed. Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 21 7. In the result, the appeal of the assessee is allowed.” 11. In terms of aforesaid observations of the Tribunal in the aforesaid case which is further supported by the other decisions of the Tribunal referred to (supra), we find substance in the contentions raised by the ld. AR on behalf of the assessee, we therefore respectfully following the aforesaid deisons, in absence of any contrary fact or decision brough on records to dis-regard the same, are of the considered view that the date for the purpose of stamp duty valuation in the present matter, as the part payments were already made by the assessee through proper banking channel, prior to execution of sale agreement as per the terms of allotment letter, therefore under the provisions of section 56(2)(x)(b) as observed herein above would be the date of allotment i.e. 11.12.2010 and the date of registration of agreement (03.11.2017). Accordingly, we direct the AO to delete the addition in present matter and re-compute the capital gain in the assessee’s case based on aforesaid directions.” 11. In backdrop of aforesaid decisions, facts and circumstances of the present matter and our aforesaid observations, we are of the considered view that in present matter the allotment letter was issued on 20.04.2011 and also major part of payment were made by the assessee in April and May 2011. It is therefore the date of allotment (20.04.2011), would be considered as date of acquisition or date of agreement for the purpose of stamp duty valuation under the provisions of section 56(2)(vii)(b) of the Act. We thus disagree with the findings of Ld. AO as well as Ld. CIT(A) in considering the stamp duty value as on the date of registration in 2017. Accordingly, we find substance in the contentions raised by the assessee and thus direct the Ld. AO to delete the addition in present matter after verifying the factual aspects furnished by the assessee. Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 22 12. Since, we have directed to delete the addition made u/s. 56(2)(vii)(b) of the Act, the additional grounds raised by the assessee challenging the validity of the issuance of notice u/s. 148 and order issued u/s. 148A(d) are thus remain academic only, so are not adjudicated. 13. Regarding, the second additional ground challenging the applicability of provisions of section 115BBE, since the substantive addition has been deleted this ground being consequential in nature become infructuous. Therefore, the same is treated as dismissed. 14. In the result, the appeal of assessee stands allowed in terms of our aforesaid observations. Order pronounced in the open court on 30-12-2025. Sd/- Sd/- (AMIT SHUKLA) (ARUN KHODPIA) Judicial Member Accountant Member Mumbai, Dated : 30-12-2025. Poonam Mirashi Stenographer Printed from counselvise.com ITA No. 4409/Mum/2025 Rekha Kishore Shah (Legal Heir of Kishor Dhirajipal Shah) 23 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. 5. Guard File CIT BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai Printed from counselvise.com "