Smt. Shashi Yogendra Raj Singhavi Vs ITO (ITAT Mumbai)
The appeal before the ITAT Mumbai arose from the order of the National Faceless Appeal Centre (NFAC) dated 17.09.2021 for Assessment Year 2018-19. The dispute related to an addition of Rs. 45,41,815 made under Section 56(2)(x) of the Income Tax Act, 1961 and assessed as “Income from Other Sources.”
The assessee had filed a return declaring total income of Rs. 49,33,640 after claiming deductions under Chapter VIA. The case was selected for limited scrutiny on issues relating to investment in immovable property and capital gains on sale of property. During assessment proceedings, the Assessing Officer observed that the assessee had purchased a flat at Akar Pinnacle, Borivali East, Mumbai on 13.10.2017 for Rs. 98,94,080, while the stamp duty valuation of the property was Rs. 1,52,01,545. The Assessing Officer treated the difference between the stamp duty value and the purchase consideration, after adjustment for stamp duty paid, as taxable under Section 56(2)(x), resulting in an addition of Rs. 45,41,815. The Commissioner (Appeals) confirmed the addition.
Before the Tribunal, the assessee submitted documents showing that the residential flat had actually been booked in the year 2014 and the consideration of Rs. 98,94,080 had been negotiated at that time. The Tribunal examined the allotment letter dated 28.02.2014 and found that it clearly specified the flat number, wing, and other terms and conditions of the transaction. The assessee had paid Rs. 5 lakh by cheque dated 26.02.2014 and subsequently made further payments in financial years 2013-14, 2014-15, and 2015-16 through banking channels. These payments were reflected in the ledger account of the developer and supported by bank statements and Form 26QB/Form 16B documents.
