Sujauddian Kasimsab Sayyed Vs ITO (ITAT Mumbai)
The case of Sujauddian Kasimsab Sayyed Vs ITO (ITAT Mumbai) revolves around the tax implications of a property purchase and the applicability of Section 56(2)(vii)(b) of the Income Tax Act, 1961. The dispute primarily concerns the valuation of the property for stamp duty purposes and the interpretation of when the property was effectively transferred to the assessee.
The appeal was filed by Sujauddian Kasimsab Sayyed for the assessment year 2015-16, challenging the order of the Commissioner of Income Tax (Appeals)-3, Thane (CIT(A)). The primary contention was the addition of ₹1,00,14,951 to the assessee’s income under the head “Income from Other Sources” as per Section 56(2)(vii)(b) of the Income Tax Act.
On 10th September 2014, Sujauddian purchased a flat in Mumbai for ₹88,30,008. However, the stamp duty valuation of the property was ₹1,88,44,959. The Assessing Officer (AO) issued a show-cause notice to the assessee, stating that the difference of ₹1,00,14,951 should be treated as income from other sources under Section 56(2)(vii)(b).
The assessee argued that the initial agreement with the builder was made on 27th April 2012, with an advance payment of ₹3,00,000, which falls in the assessment year 2013-14. The provision of Section 56(2)(vii)(b) was introduced effective 1st April 2014 and thus should not apply to the assessment year 2015-16.
