DCIT Vs Romell Housing LLP (ITAT Mumbai)
ITAT Mumbai held that since deed of conveyance executed on 31.03.2017, the provisions of section 56(2)(x) of the Income Tax Act are not applicable. Section 56(2)(x) is inserted by Finance Act, 2017 and effective only from 01.04.2017.
Facts- The assessee is a limited liability partnership firm and is engaged in the development and construction of real. The return filed by the assessee was selected for complete scrutiny and statutory notices u/s. 143(2) and section 142(1) of the Act were issued and served on the assessee. During the assessment proceedings, it was observed that the assessee has purchased 4 properties during the year under consideration, whose transaction consideration was less than the value fixed by the Stamp Value Authority. Accordingly, AO held that the crucial date in the present case is the date of registration for the applicability of the provision of section 56(2)(x) of the Act. The difference between stamp value and purchase consideration amounting to Rs.31,49,80,500/- was considered as income of the assessee u/s. 56(2)(x) of the Act.
CIT(A) upheld the finding of AO. Being aggrieved, the present appeal is filed.
Conclusion- Held that since the deed of conveyance was executed amongst the parties in respect of immovable property on 31.03.2017, the provisions of section 56(2)(x), which were inserted by Finance Act, 2017 w.e.f. 01.04.2017, are not applicable to the present case and the said section can be only applicable to the facts wherein the sale deeds are executed on or after 01.04.2017 pursuant to which immovable property is received by any person.
