Navketan Premises Pvt. Ltd Vs DCIT (ITAT Mumbai)
Transfer effective on possession, Not registration – ITAT applies Section 2(47)(v)- Section 43CA cannot override completed Transfer : ITAT Mumbai; DVO Valuation irrelevant when sale & possession completed in prior year
The issue before the Tribunal was the addition of ₹3.56 crore u/s 43CA for alleged undervaluation in sale of commercial property based on stamp duty/DVO valuation, rather than declared sale consideration.
Assessee, a real estate developer, sold four commercial units in “Hi-Life Mall,Mumbai. The possession & full payment were completed on 13.07.2013 (i.e., A.Y. 2014–15). However, registration of agreements was done in FY 2014–15 (A.Y. 2015–16), on 03.03.2015. AO invoked Sec 43CA & made addition based on DVO valuation dated 03.05.2015.
Assessee argued that the transfer was complete in A.Y. 2014–15 u/s 2(47)(v) read with Sec 53A of Transfer of Property Act & entire consideration was received in July 2013 through banking channels. AO had already taxed the same income in A.Y. 2014–15 in reassessment proceedings. CIT(A) deleted the addition in A.Y. 2014–15 & the Revenue didn’t challenge it, thus finality was attained. As per Sec 43CA(3) & (4), stamp duty value on the date of agreement should be considered when consideration is received before registration.
