Sulochana Saijan Modi Vs ITO (ITAT Mumbai)
Summary: ITAT Mumbai considered an addition under section 56(2)(x)(b) arising from purchase of a jointly held residential property where the stamp duty valuation exceeded the transaction value. The assessee and her son had booked an under-construction residential house on 22.11.2010 at an agreed cost of Rs.83,20,500/-, with Rs.2,00,000/- paid by cheque dated 11.11.2010.
The property was registered on 29.07.2017 at a stamp duty valuation of Rs.1,45,55,800/- against transaction value of Rs.87,70,500/-. The AO rejected the allotment letter as an agreement for sale and invoked section 56(2)(x)(b), while the CIT(A) upheld the addition. The Tribunal, following Parth Dasrath Gandhi vs Addl./Deputy/Asst. CIT, held that an allotment letter should be considered as an “Agreement to sell” for purposes of section 56(2)(x).
Since part consideration had been paid through banking channels before execution of the sale agreement, the provisos to section 56(2)(x) applied. However, as the stamp duty value prevailing on the allotment date was not on record, the issue was restored to the AO for the limited purpose of comparing that value with the transaction value recorded in the registration document. The Tribunal also held that CIT vs Balbir Singh Maini concerned interpretation of “transfer” under section 2(47) and was not applicable to the facts. The assessee’s grounds and appeal were allowed. :chatgpt-content-reference{index=”0″}
