ITO Vs Rajni D. Saini (ITAT Mumbai)
ITAT Mumbai held that as per the provisions of 56(2)(vii)(b) of the Income Tax Act if the date of agreement fixing the consideration and date of registration are not in same, the stamp duty value may be taken as on the date of agreement fixing the consideration, instead of that on the date of registration.
Facts-
During the financial year 2010-11 assessee had booked property at a total consideration of Rs.2.60 crores. Developer issued allotment letter dated 19/05/2010. The assessee had made initial payment of Rs. 10.00 lacs at the time of allotment. Thereafter, installments were paid on behalf of the assessee to the developer by the parents of the assessee through various cheques. The payments were made directly by the parents of the assessee to the developer. Gift deeds to that effect were also made by the parents of the assessee. The entire payment for purchase of property was concluded till Financial Year 2011-12. A registered sale deed dated 01/08/2013 was executed.
During the course of scrutiny assessment proceedings for Assessment Year 2014-15, AO disbelieved the submissions of assessee and the gift deeds executed by parents of the assessee. Thus, the Assessing Officer made addition of Rs.5.31 crores u/s. 56(2)(vii)(b) of the Act being the difference between the Stamp Duty valuation as on the date of registration less the actual consideration paid. Aggrieved by the addition, the assessee filed appeal before the CIT(A). CIT(A) after examining the facts and documents on record deleted the addition.
Conclusion-
“Transfer” in relation to capital assets includes the extinguishment of any right therein. This letter of allotment extinguishes the rights of builder in the said premises in favour of the appellant and by signing the letter of allotment, the assesses agreed to buy the same and for which payment was made according to the letter of allotment. As per the Board Circular No. 672 and the appellant acquired the rights/title in the premises by way of allotment letter on 19.05.2010. Further, it is also evident from the provisions of 56(2)(vii)(b) that if the date of agreement fixing the consideration and date of registration are not in same, the stamp duty value may be taken as on the date of agreement fixing the consideration, instead of that on the date of registration. The value of property as per stamp duty ready reckoner rate on date of the fixing the consideration is Rs.2,54,84,716/-. Agreement value of the property purchased is Rs.2.60 crores and it is higher than the stamp duty value of Rs.2.54 crores on date of the agreement fixing the amount of consideration for the transfer of immovable property. Further, in terms of proviso to the section, payment of consideration has been made by the appellant before the date of the agreement. In view of the above, the provision of the Section 56(2)(vii)(b) is not applicable to the appellant. The A.O. is directed to delete the addition of Rs.5,13,25,000/-. This ground is allowed.
