DCIT Vs Nitin Kshirsagar (HUF) (ITAT Mumbai)
The Mumbai ITAT dismissed the Revenue’s appeal against the CIT(A)’s deletion of a ₹2,38,32,715 addition made under section 56(2)(x)(b) of the Income-tax Act, 1961. The assessee, a HUF and proprietor of M/s Admyre Advertising Agency, had originally booked a residential flat with the developer in 2001 for ₹70,25,000 and paid ₹51,000 as earnest money. An MOU was executed in 2003, followed by a revised allotment in 2009 for ₹1,02,80,000. Due to revised building plans, the allotment was again revised in 2019, with the final consideration, including an additional parking slot, being ₹1,74,75,285. The registered agreement was executed on 13.12.2019, while the stamp valuation authority valued the property at ₹4,13,08,000.
The Assessing Officer treated the difference of ₹2,38,32,715 as deemed income under section 56(2)(x)(b), taking the stamp duty value prevailing on the registration date. The assessee contended that the transaction originated from the 2001 allotment and subsequent 2003 MOU and 2009 revised allotment, and that the stamp duty value on the later registration date should not be adopted. The assessee also relied on payments through banking channels made in 2001, 2009 and 2015 and CBDT Circular No. 471 dated 15.10.1986.
The CIT(A), relying on Parth Dashrath Gandhi v. Addl./Deputy/Asst. Commissioner of Income-tax, NFAC, Delhi, ITA No. 1990/Mum/2022, dated 31.01.2023, and Balkrishna Venkappa Bhandary v. Deputy Commissioner of Income-tax [2024] 169 [com] 76 (Mumbai-Trib.), held that allotment letters could be regarded as agreements to sell for section 56(2)(x) purposes where consideration had been partly paid through banking channels. Accordingly, the stamp duty value on the relevant allotment dates was required to be considered, and the addition was deleted.
