Sarayu Krishna Kamat Vs DCIT (ITAT Mumbai)
For Section 56(2)(x), Stamp Duty Value as on Date of Allotment Applies When Consideration Paid Through Banking Channels
The Mumbai Bench of the Income Tax Appellate Tribunal allowed the appeal of Sarayu Krishna Kamat for AY 2018–19, deleting an addition of ₹2,70,970 made under Section 56(2)(x) on account of alleged difference between purchase consideration and stamp duty value of a jointly purchased flat.
The Tribunal noted that the assessee, along with her husband, had booked the flat in FY 2016–17 and was issued an allotment letter dated 21.04.2016, pursuant to which substantial consideration was paid through account payee cheques and banking channels prior to execution of the registered agreement in August 2017. The Assessing Officer had adopted the stamp duty value as on the date of registration (FY 2017–18) and treated the differential amount as income, while the assessee contended that the valuation as on the date of allotment was applicable.
Interpreting the first and second provisos to Section 56(2)(vii)/(x), the Tribunal held that where the date of agreement/allotment and date of registration are different, and consideration (or part thereof) is paid by non-cash modes before the agreement, the stamp duty value as on the date of allotment/agreement must be adopted. On facts, the ready-reckoner value in FY 2016–17 (₹4.19 crore) was lower than the actual purchase consideration of ₹4.50 crore, and therefore no addition could be made.
The Tribunal rejected the Revenue’s view that an allotment letter cannot be equated with an agreement, holding that for the purpose of Section 56, what is relevant is the fixing of consideration and payment through banking channels, both of which were satisfied in the year of allotment. Relying on coordinate bench decisions in Awadhnarayana Bhagwanta Singh and Manjulaben Himmatlal Jain, the Tribunal set aside the orders of the AO and CIT(A) and deleted the entire addition.
The ruling reinforces that in property transactions, stamp duty valuation must be aligned to the allotment/agreement date when statutory conditions are met, and additions under Section 56(2)(x) cannot be made by mechanically adopting the registration-year value
FULL TEXT OF THE ORDER OF ITAT MUMBAI
