Rekha Harkishan Jagwani Vs ITO (ITAT Mumbai)
Summary: The Mumbai Bench of the Income Tax Appellate Tribunal considered whether section 56(2)(vii)(b) of the Income-tax Act, 1961 could be invoked by treating the subsequent registration of an immovable property in 2013 as the relevant transaction date, when the property had been allotted and part consideration had been paid in 2007.
The assessee, Rekha Harkishan Jagwani, had jointly purchased an immovable property under a registered sale deed dated 06.05.2013. The agreed value was Rs.1,18,00,000/-. The Assessing Officer considered the stamp duty value of Rs.4,37,53,790/- and made an addition of Rs.1,59,76,895/- under section 56(2)(vii)(b), treating the difference attributable to the assessee’s 50% share as income from other sources. The assessment had been reopened under section 147 and completed under section 143(3) r.w.s. 147 on 29.12.2018. The NFAC/CIT(A) rejected the assessee’s appeal.
Before the Tribunal, the assessee relied upon an allotment letter dated 11.04.2007 recording the agreed consideration of Rs.1,18,00,000/-. The assessee had paid Rs.30,00,000/- through account-payee cheque, with the bank statement evidencing the payment on 12.04.2007. The assessee therefore contended that the transaction had commenced and crystallised in 2007, before the insertion of section 56(2)(vii) by the Finance (No. 2) Act, 2009 with effect from 01.10.2009. TaxGuru’s contemporaneous explanation of the amendment records that clause (vii) was introduced in section 56(2) with effect from 01.10.2009. Finance (No. 2) Act, 2009
