SURAJMAL MISTRY HUF,MUMBAI V. INCOME TAX OFFICER, WARD 22(3)(4), MUMBAI

ITA 5830/MUM/2024

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The case involves Surajmal Mistry HUF, who appealed against the order of the National Faceless Appeal Center (NFAC)/Commissioner of Income Tax (Appeals), which added a differential amount between the stamp duty value and the purchase value of two commercial properties to the Assessee's income under 'Income from other sources'. The properties were purchased in 2010, and the Assessing Officer (AO) initially added Rs. 28,85,923 to the Assessee's income, citing the difference between the declared purchase values and the stamp duty values as per the registrar. The Assessee contested this, providing alternative valuations based on a ready reckoner, which the Commissioner accepted, reducing the addition to Rs. 17,81,145. The Tribunal further reduced this amount to Rs. 12,66,684, accepting the Assessee's valuation for one of the properties.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 24147 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KIRAN UNAVEKAR
• Assessee Lawyers: JITENDRA SINGH; OBSERVING; HOLDING
• Keywords: Sale consideration of property below Jantri Value
• Section: 250; 271(1)(c); 56(2)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “SMC” BENCH, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JM आयकर अपील सं./ITA No.5830/MUM/2024 (\u0001नधा\u0005रण वष\u0005 / Assessment Year :2015-16) Surajmal Mistry HUF 401, Exclusive Tower, Tagore Road, Santacruz (West), Mumbai-400054 Vs. ITO,Ward-22(3)(4), Mumbai 304, Piramal Chambers, Lalbaug, Parel, Mumbai-400012 \u0001थायी लेखा सं./PAN No. : AAJHS1615L (अपीलाथ\r /Appellant) .. (\u000e\u000fयथ\r / Respondent) िनधा\u000e\u000fरती की ओर से /Assessee by : Shri Jitendra Singh, AR राज\u0011व क\u000b ओर से /Revenue by : Shri Kiran Unavekar, Sr. DR. सुनवाई क\u0016 तार\u0018ख / Date of Hearing : 15/01/2025 घोषणा क\u0016 तार\u0018ख/Date of Pronouncement : 28/02/2025 आदेश / O R D E R PER NARENDER KUMAR CHOUDHRY: This appeal has been preferred by the Assessee against the order dated 19.09.2024 impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) under section 250 of the Income Tax Act, 1961 (in short 'the Act') for the A.Y. 2015-16. ITA No.5830/Mum/2024 Surajmal Mistry HUF 2 2. In this case, the Assessee had purchased two commercial properties bearing numbers 306 & 307 at Rustomjee Sterling, 14B, SV Road, Santacruz (W), Mumbai 400 054, on a consideration of Rs.76,66,779/- & Rs.1,30,82,298/- respectively, as against the stamp duty value as on 2010 to the tune of Rs.1,79,59,500/- and Rs.2,76,95,500/- respectively, as per stamp duty valuation and therefore the Assessing Officer (AO) show caused the Assessee “as to why the differential amount of the stamp duty valuation and the purchase value be not added in the income of the Assessee”. The Assessee in response to show cause, responded and submitted that booking of the said properties has been made in the year 2010 and payments were spread over the years 2010-11, 2011-12 and 2014-15. The AO verified the claim and the payment schedule of the properties and observed the difference of Rs.28,85,923/- in both the properties in the purchase value declared and stamp duty value. For brevity, the calculation is reproduced herein below: Particulars Property-1 (Unit No. 306) Property-2 (Unit No. 307) Total Stamp duty value of 2010 90,44,500/- 1,45,90,500/- Purchased value 76,66,779/- 1,30,82,298/- Difference 13,77,721/- 15,08,202/- 28,85,923/- 3. The Assessee, in reply to the aforesaid calculation, has submitted as under: 4.0 It is submitted that the stamp duty valuations received from the registrar for the year 2010 seems to be on estimated basis. Also for the 2nd property i.e. Unit no. 307, it is evident that the Registrar has applied the same rate both for office area and the parking area, whereas the rate for office area and parking area was Rs. 1,58,400/- and Rs. 69,300/- per square meter respectively. The stamp duty values are calculated for your kind perusal, the same should be considered if at all required. Unit-306 ITA No.5830/Mum/2024 Surajmal Mistry HUF 3 Particulars Area (SQM) Ready Recknor Value Value Office area 51.52 1,58,400 81,60,768 Parking area 11.15 69,300 7,72,695 Total value 89,33,463 Unit-307 Particulars Area (SQM) Ready Recknor Value Value Office area 80.96 1,58,400 1,28,24,064 Parking area 11.15 69,300 7,72,695 Total value 1,35,96,759 4. The AO though considered the claim of the Assessee, however, did not find the same acceptable and ultimately made the addition of Rs.28,85,923/- being difference between stamp duty value and the purchase value as disclosed by the Assessee by observing and holding as under: “6. The Assessee has booked the properties in the year 2010 and made the part payments for unit no. 306 at Rs.7,08,000/ and unit no. 307 at Rs. 10,45,000/-. Though the Assessee has booked the properties in the year 2010, majority of the payments have been made in the subsequent years. Even the stamp duty authority has been valued the properties for the year 2010 of Rs.90,44,500/- for unit no 306 and Rs. 1,45,90,500/- for unit no. 307. The provision of section 56(2)(vii)(b) also speak about the difference between the purchase value and stamp duty value to be considered as income from other sources. In view of the above explanation, the submission made by the assessee is not acceptable. Hence, the difference of Rs.28,85,923 / (Rs. 13,77,721/- for unit no.306 and Rs. 15,08,202/-for unit no. 307) is added to the total income under the head \"Income from other sources\". Penalty proceedings u/s. 271(1)(c) of the I.T. Act, 1961 is initiated for filing inaccurate particulars of income and concealing income.” 5. The Assessee, being aggrieved, challenged the said addition before the Ld. Commissioner and submitted various details including the amounts paid for the aforesaid properties. The Assessee also argued that the stamp duty value received from the registrar by the AO seems to be on an estimated basis as the registrar had applied the same rate for both office area and parking area. The stamp duty value of the property as per ready reckoner 2010 is Rs.89,33,463/- for unit no. 306 and Rs.1,35,96,759/- for unit no 307. The Ld. Commissioner accepted the Assessee's submission of the stamp duty value of the properties and worked out the differential amount to the tune of Rs.17,81,145/- and ITA No.5830/Mum/2024 Surajmal Mistry HUF 4 consequently directed the AO to restrict the addition u/s 56(2)(vii)(b)(ii) of the Act to the tune of Rs.17,81,145/- by holding as under: “5.3.5 During the course of assessment proceedings, the AO had requested for the stamp duty value of the properties for the year 2010 which were Rs. 90,44,500/- for unit no. 306 and Rs. 1,45,90,500/- for unit no. 307. The AO then used the same for the calculation of income 56(2)(vii)(b)(ii) of the Act. The appellant argued that the stamp duty valuation received from the registrar seems to be on estimated basis and for the 2nd property ie. Unit no. 307, the registrar had applied the same rate for both office area and parking area. The appellant had submitted the stamp duty value of the properties as per ready reckoner 2010 which is Rs. 89,33,463/- for unit no. 306 and Rs. 1,35,96,759/- for unit no. 307. I am inclined to accept the appellant's submission of the stamp duty value of the properties. The difference in the stamp duty value and the consideration is, therefore, calculated as under: Particulars Property (Unit No.306) Property 2 (Unit No. 307) Total Stamp duty value of 2010 89,33,463/- 1,35,96,759/- 2,25,30,222/- Purchase value 76,77,779/- 1,30,83,298/- 2,07,49,077/- Difference 12,66,684/- 5,14,461/- 17,81,145/- From the above discussions, it is held that the appellant had paid consideration less than the stamp duty value by an amount of Rs. 17,81,145/-. Accordingly, the AO is directed to restrict the addition u/s 56(2)(vii)(b)(ii) of the Act to Rs. 17,81,145/-. Hence, the ground of appeal no. 2 is Partly Allowed.” 6. The Assessee, being aggrieved, is in appeal before us and contradicted the findings of the Ld. Commissioner. 7. On the contrary the Ld. D.R. refuted the claim of the Assessee and supported the impugned order. 8. Heard the parties and perused the material available on record. Admittedly, the Assessee himself has submitted the stamp duty value of the property as per ready reckoner 2010 to the tune of Rs.89,33,463/- for unit no.306 and Rs.1,35,96,759/- for unit no.307, which was accepted by the Ld. Commissioner and therefore only he restricted the addition to the extent of Rs.17,81,145/- as against the addition of Rs.28,85,923/- and thus the Assessee is not entitled to challenge the said decision of the Ld. Commissioner in restricting the addition to the extent mentioned above. ITA No.5830/Mum/2024 Surajmal Mistry HUF 5 8.1 The difference in the stamp duty value and consideration as tabulated below has been determined by the Ld. Commissioner by taking into consideration the submissions of the Assessee himself, which for the sake of gravity is reproduced herein below: Particulars Property (Unit No.306) Property 2 (Unit No. 307) Total Stamp duty value of 2010 89,33,463/- 1,35,96,759/- 2,25,30,222/- Purchase value 76,77,779/- 1,30,83,298/- 2,07,49,077/- Difference 12,66,684/- 5,14,461/- 17,81,145/- 8.2 It is observed by this Court that admittedly the difference in the stamp duty value and the purchase value {as declared by the Assessee} of unit no.307 is of Rs.5,14,461/- which is below than the amount equal to 5% of the consideration, as per exception carved out in the provisions of section 56(2) (x) (b) (B) (ii) and section 50(c) of the Act. Though the provisions of section 56(2)(x) and section 50(c) of the Act are not applicable to the instant case, as this case pertains to A.Y. 2015-16, however such provisions are corollary to the provisions of section 56(2)(vii) of the Act as applicable to the instant case, hence this Court considering the peculiar facts and circumstances in totality, the Assessee’s prayer for taking a lenient/liberal view, the substantial justice and in order to cut short the litigation, is inclined to delete the addition of Rs.5,14,461/- being difference between stamp duty value of Rs.1,35,96,759/- minus purchase value of Rs.1,30,82,298/- of unit no 307, being covered under exception carved out in the provisions of section 56(2) (x) (b)(B)(ii) of the Act. Thus the addition of Rs.5,14,461/- (pertaining to unit no 307) is deleted. Resultantly, addition of Rs.17,81,145/- as restricted by the Ld. Commissioner is accordingly, further reduced to Rs.12,66,684/-. Thus, the Assessee gets part relief. ITA No.5830/Mum/2024 Surajmal Mistry HUF 6 9. In the result the appeal filed by the Assessee stands partly allowed. Order pronounced in the open court on 28/02/2025. Sd/- (NARENDER KUMAR CHOUDHRY) \u0007ाियक सद\f / JUDICIAL MEMBER मुंबई/Mumbai: आदेश क\u000b \u0012\u0001त\u0014ल\u0016प अ\u0019े\u0016षत/Copy of the Order forwarded to : आदेशानुसार/ BY ORDER, (Assistant Registrar) आयकर अपील\u001eय अ\u001fधकरण, मुंबई/ ITAT, Mumbai 1. अपीलाथ\r / The Appellant- . 2. \u000e\u000fयथ\r / The Respondent- 3. आयकर आयु\u0016(अपील) / The CIT(A), 4. आयकर आयु\u001eत / CIT 5. िवभागीय \u001cितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai 6. गाड! फाईल / Guard file. स\u000fया#पत \u000e$त //True Copy// "