Parth Dashrath Gandhi Vs Addl./Deputy/Asst. Commissioner of Income Tax (ITAT Mumbai)
ITAT Mumbai held that stamp duty valuation as on the date of allotment letters, and not the date of execution of agreement to sell, should be considered for the purpose of section 56(2)(x) of the Income Tax Act.
Facts- The assessee has filed this appeal challenging the order dated 09.06.2022 passed by Ld CIT(A), NFAC, Delhi and it relates to the assessment year 2018-19. The assessee is aggrieved by the decision of Ld CIT(A) in confirming the addition made by the AO u/s 56(2)(x) of the Act.
AO noticed that the assessee has purchased two properties during the year under consideration, whose stamp duty value was more than the value of consideration.
The assessee submitted that as per the first and second proviso to sec. 56(2)(x) of the Act, the stamp duty value on the date of agreement should be taken for the purpose of sec. 56(2)(x).
AO held that the stamp duty valuation as on the date of execution of agreement to sale should alone be considered for the purposes of sec.56(2)(x) of the Act. Accordingly, the AO added the difference amount of Rs.25,73,061, referred in the table above, to the total income of the assessee. The Ld CIT(A) also confirmed the same.
Conclusion- We hold that the respective allotment letters issued to the assessee should be considered as “Agreement to sell” for the purposes of sec.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, we are of the view that the provisos to sec.56(2)(x) shall apply to the facts of the present case. Accordingly, the stamp duty valuation as on the date of respective Allotment letters should be considered for the purposes of sec.56(2)(x) of the Act. Hence the AO was not justified in considering the stamp duty valuation as on the date of execution of agreement to sell.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The assessee has filed this appeal challenging the order dated 09.06.2022 passed by Ld CIT(A), NFAC, Delhi and it relates to the assessment year 2018-19. The assessee is aggrieved by the decision of Ld CIT(A) in confirming the addition made by the AO u/s 56(2)(x) of the Act.
2. The facts relating to the care are that the AO noticed that the assessee has purchased two properties during the year under consideration, whose stamp duty value was more than the value of consideration shown in the conveyance deed as detailed below:-
