Excel Developers Vs ITO (ITAT Mumbai)
ITAT Mumbai Deletes Addition u/s 43CA on Sale of Flat – Benefit of Agreement Date & Earlier Payments Allowed
In this case, Excel Developers, a builder & developer, filed appeal against order of CIT(A) confirming addition of Rs.9,05,500 u/s 43CA on account of difference between agreement value & stamp duty valuation in respect of sale of Flat.
AO noted that flat was sold for Rs.37,21,000 as per agreement while stamp duty valuation was Rs.46,26,500, resulting in difference of Rs.9,05,500, which was added u/s 43CA. CIT(A) upheld addition rejecting Assessee’s plea that agreement for flat was entered in earlier year i.e. 17.09.2013 & part payment of Rs.3 lakh was received on 18.09.2013 with another Rs.3 lakh on 01.10.2013.
Before Tribunal, Assessee produced bank statement of purchaser & ledger account to substantiate that payments were received at time of agreement in 2013. It was argued that sub-sections (3) & (4) of s.43CA clearly provide that where part of consideration is received by account payee cheque or bank draft or through banking channel on or before date of agreement, stamp duty valuation on date of agreement, and not on date of registration, is to be adopted.
Tribunal observed that lower authorities disregarded documentary evidences placed by Assessee. It noted that part payment was indeed received in September & October 2013, much before registration, & hence provisions of s.43CA(3) & (4) squarely applied. Accordingly, addition made by AO & confirmed by CIT(A) was unsustainable.
