Raghavendra Ramakrishna Naik Vs ITO (ITAT Mumbai)
The appeal was decided by the Income Tax Appellate Tribunal, Mumbai Bench and arose from the final assessment order passed for Assessment Year (AY) 2016–17 pursuant to directions issued by the Dispute Resolution Panel under section 144C of the Income-tax Act, 1961.
The dispute concerned an addition of ₹18,95,000 made under section 56(2)(vii)(b) of the Act in relation to the purchase of an immovable property. The assessee had purchased Flat No. 901 in a building known as “Prathmesh Pearls” at Bhandup (West), Mumbai. The registered sale deed was executed on 18 March 2016, wherein the stamp duty value of the property was recorded at ₹81,80,500, while the consideration mentioned in the agreement was ₹62,88,500. The Assessing Officer treated the difference of ₹18,95,000 as income under section 56(2)(vii)(b).
The assessee had not filed a return of income for the relevant year, and the case was reopened under section 148 based on specific information flagged through the Risk Management Strategy of the CBDT relating to purchase of immovable property. During reassessment proceedings, the assessee furnished copies of the purchase deed, index-2, bank statements, and other supporting documents. The Assessing Officer proposed the addition by adopting the stamp duty value as on the date of registration and ignoring the earlier allotment letter issued by the builder.
