VAISHALI VISHWAS JOSHI,MUMBAI V. INCOME TAX OFFICER, MUMBAI, MUMBAI

ITA 4425/MUM/2024

AI Insights

The case involves an appeal by Vaishali Vishwas Joshi against the order of the National Faceless Appeal Centre (NFAC), which confirmed the addition of Rs.14,99,500 to her income under Section 69A and Section 56(2)(vii)(b) of the Income-tax Act, 1961, for the Assessment Year 2017-18. The addition was based on the difference between the stamp duty valuation and the transaction value of a property purchased by the assessee. The AO initially made the addition under Section 69A read with Section 115BBE, considering the valuation on the date of registration rather than the date of allotment. The CIT(A) upheld this addition, leading to the current appeal at the ITAT. The ITAT found that the correct date for valuation should be the date of allotment, as per the provisions of Section 56(2)(vii)(b), and remanded the case for reassessment based on this finding.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474429 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASIF KAR MALI
• Assessee Lawyers: SHRIRAVI DASIJA
• Keywords: Set aside; Sale consideration of property below Jantri Value
• Section: 148; 250; 139(1); 56(2)(vii)(b); 69A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “J (SMC)”, MUMBAI BEFOR SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND MISS PADMAVATHY S. ACCOUNTANT MEMBER ITA No. 4425/Mum/2024 (Assessment year : 2017-18) Vaishali Vishwas Joshi 38, Bhaskar, Tejpal Scheme Road No.3, Vileparle (East), Mumbai-400 0057 PAN : AAGPJ5444D vs Income-tax Officer, Wad 26(1)(1), Mumbai, C-41, G Block, Bandra Kurla complex, Bandra (E), Mumbai-400 051 APPELLANT RESPONDENT Assessee by : ShriRavi Dasija, CA Respondent by : Shri Asif Karmali (SR.DR.) Date of hearing : 13/03/2025 Date of pronouncement : /03/2025 O R D E R PER ANIKESH BANERJEE, J.M: The instant appeal of the assessee was filed against the order of theNational Faceless Appeal Centre (NFAC), Delhi [for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), for Assessment Year 2017-18, date of order02.08.2024.The impugned order was emanated from the order of the Assessment Unit, Income-tax Department (in short, ‘the A.O.’) passed under section 147read with section 144Bof the Act, date of order 02/05/2023. 2 ITA No.4425 /Mum/2025 Vaishali Vishwas Joshi 2. The assessee has taken the following modified grounds of appeal:- “1. In the facts and circumstances of the case and in law, learned CIT(A) erred in confirming the addition made u/s 69A of Rs.14,99,500. It is most respectfully submitted that if the provisions of section 69A are invoked, addition of difference between agreement value and reckoner value cannot be made. 2. Without prejudice to the above, In the facts and circumstances of the case and in law, learned CIT (A) erred in confirming addition of Rs. 14,99,500 being the difference in sales consideration and market value u/s sec. 56(2)(vii) ((b). 3. It is most respectfully submitted that learned CIT(A) erred in not considering/and dealing with the following submissions of the Appellant since the difference in the Agreement value and the stamp duty Value was less than 10% the impugned addition is not justified Since the flat was purchased in earlier year, the stamp duty value of that particular year had to be considered. No addition could be made without referring the matter for valuation” 3. The brief facts of the case are that the assessee filed a return of income under Section 139(1) of the Act. During the relevant assessment year, the assessee purchased a property through a registered deed, wherein the stamp duty valuation of the property was Rs.1,61,71,000/-, while the transaction value declared by the assessee was Rs.1,46,71,500/-. The difference between the stamp duty valuation and the actual transaction value amounted to Rs.14,99,500/-, thereby attracting the provisions of Section 56(2)(vii)(b) of the Act.Consequently, the assessment was reopened, and a notice under Section 148 of the Act was issued. The Ld. AO subsequently made an addition of Rs.14,99,500/- under Section 69A read with Section 115BBE of the Act. The Ld. AO justified the addition on the ground that the assessee had entered into an agreement with the promoter on 16/07/2010, but the said agreement was not registered. However, he acknowledged that the property had been allotted to the assessee on the same date and accepted the validity of the allotment letter issued by the 3 ITA No.4425 /Mum/2025 Vaishali Vishwas Joshi promoter. Despite this, the Ld. AO determined the stamp duty valuation based on the date of registration of the property, i.e., 26/05/2016, and accordingly made the addition under Section 69A read with Section 115BBE of the Act. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal, holding that the assessee had not obtained possession of the property in the relevant year and that only the agreement for sale had been registered. Consequently, the addition under Section 69A of the Act was upheld.Notably, in the appellate order, while the Ld. CIT(A) confirmed the addition under Section 69A of the Act, the entire discussion in the order primarily pertained to the confirmation of the addition under Section 56(2)(vii)(b) of the Act.Dissatisfied with the appellate order, the assessee has now filed an appeal before the ITAT challenging the said decision. 4. The Ld.AR filed a written submission containing pages 1 to 179, which is kept on the record. The Ld.AR argued that the addition under section 69A is not applicable in assessee’s case, so the addition made by the Ld.AO is against the provisions of section 56(2)(vii)(b) of the Act. The Ld.AR submitted that the assessee’s property was allotted on 16/07/2010 and copy of the allotment letter was duly filed before the revenue authorities and also submitted before the bench in APB pages 6 to 10. The assessee has started payment on 25/05/2010 with an amount of Rs.22,00,725/- through banking channel and the details of the payment was duly annexed at APB page 11. Further, the assessee has executed an agreement which is annexed in APB pages 12-159. So, it is evident from the above submission that the assessee had complied with the peripherals as directed in provisions of section 56(2)(vii)(b) of the Act. The Ld.AO has taken view which is 4 ITA No.4425 /Mum/2025 Vaishali Vishwas Joshi contrary to the said section. But the Ld.AO had confirmed that the assessee had submitted the allotment letter and agreement and details of payment before him. The Ld.CIT(A) has taken a different view and mentioned that the assessee had not obtained possession of the property in the relevant year and that only the agreement for sale had been registered. But in impugned assessment order the ld. AO has taken contrary view against the observation of the Ld. CIT(A) and noted that the assessee has purchased the alleged property by registered deed. 5. The Ld.DR argued and relied on the orders of revenue authorities. 6. We have heard the rival submissions and examined the documents available on record. A plain reading of the proviso to Section 56(2)(vii)(b) of the Act reveals the following: “56(2)(vii) ………………………… (b) Any immovable property,— (i) Without consideration, if the stamp duty value exceeds fifty thousand rupees, the stamp duty value of such property shall be considered. (ii) If acquired for consideration that is less than the stamp duty value by an amount exceeding fifty thousand rupees, the portion of the stamp duty value exceeding such consideration shall be considered. 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 as on the date of the agreement may be taken for the purposes of this sub-clause: Provided further that this proviso shall apply only if the consideration, or part thereof, has been paid by any mode other than cash on or before the date of the agreement for the transfer of such immovable property.” (Emphasis supplied) 5 ITA No.4425 /Mum/2025 Vaishali Vishwas Joshi In the present case, the assessee entered into an agreement, pursuant to which the allotment letter was duly issued by the promoter. The payment for the property was made through banking channels. Therefore, the stamp duty valuation of the property should be considered as of the date of allotment, i.e., Financial Year (F.Y.) 2010-11. There is no discrepancy in the purchase value declared by the assessee.Consequently, the addition of Rs.14,99,500/-, representing the difference between the declared transaction value and the stamp duty valuation, cannot be sustained in the impugned assessment year. Accordingly, the addition made under Section 69A read with Section 115BBE of the Act is quashed, as the provisions of Section 69A are not applicable to the present case.Furthermore, the matter is remitted to the file of the Ld. AO with a direction to consider the stamp duty valuation as per the financial year relevant to the allotment of the property, i.e., F.Y. 2010-11, and to recompute the assessment accordingly. Needless to say, the assessee must be granted a reasonable opportunity of being heard during the reassessment proceedings.Accordingly, the impugned appellate order is set aside, and the matter is remanded to the Ld. AO for this limited purpose. 7. In the result appeal of the assessee bearing ITA No.4425/Mum/2024 is allowed. Order pronounced in the open court on 21st day of March, 2025. Sd/- sd/- (MISS PADMAVATHY S.) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,दिन ांक/Dated: 21/03/2025 Pavanan 6 ITA No.4425 /Mum/2025 Vaishali Vishwas Joshi Copy of the Order forwarded to: 1. अपील र्थी/The Appellant , 2. प्रदिव िी/ The Respondent. 3. आयकरआयुक्त CIT 4. दवभ गीयप्रदिदनदि, आय.अपी.अदि., मुबांई/DR, ITAT, Mumbai 5. ग र्डफ इल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, Mumbai "