ITO Vs Divya Arun Goradia (ITAT Mumbai)
The Mumbai Bench of the Income Tax Appellate Tribunal dismissed Revenue’s appeals against deletion of addition under section 56(2)(x)(b) of the Income-tax Act, 1961 and consequential penalty under section 270A.
The dispute arose from an addition of ₹21,81,95,300 made by the Assessing Officer on account of the alleged difference between the purchase consideration of an immovable property and its stamp duty valuation. The connected penalty appeal arose from penalty levied under section 270A based on the same addition.
The assessee contended that there was no fresh purchase of property during Assessment Year 2018-19. According to the assessee, the property had already been purchased through an agreement dated 18.12.1998, the entire consideration had been paid during Financial Year 1998-99, possession had been handed over, and the assessee had continuously enjoyed ownership rights, paid maintenance charges and offered rental income from the property to tax in earlier years. The registration carried out on 07.02.2018 was stated to be only formalisation of the earlier transaction as the original agreement had become untraceable.
The CIT(A), after considering documentary evidence including the original agreement, developer’s No Objection Certificate, maintenance records, rental documents and other materials, accepted the assessee’s explanation and deleted the addition. The CIT(A) also deleted the penalty under section 270A since the quantum addition itself did not survive.
