S. 56 : Income from other sources-Transfer-The assessee had acquired right in the ownership of the flat at the time of issuance of allotment letter-Date of allotment letter is to be considered as date of purchase-Addition made on the basis of stamp valuation on the date of registration was deleted. [S. 2(47), 56(2)(vii)(b)]
During the financial year 2010-11, the assessee had booked property in a building known as “Shrikant Chambers-II” at a total consideration of Rs.2.60 crores. The developer issued allotment letter dated 19-5-2010. The entire consideration was paid till financial year 2011-12. The registered sale deed was executed dated 1-8 -2013. The Assessing Officer for the assessment year 2014-15 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 date of registration less actual consideration paid . On appeal the CIT(A) deleted the addition . On appeal by the Revenue dismissing the appeal the Tribunal held that held that a bare perusal of the first Proviso to section 56(2)(vii)(b) of the Act would show that where the date of agreement fixing the amount of consideration for transfer of immovable property and the date of registration are not same, the stamp duty value as on the date of the agreement may be taken. The provisions of clause (b) to section 56(2)(vii) were amended by the Finance Act, 2013. The Memorandum to the Finance Act, 2013 explaining the reason for amending the provisions of section 56(2)(vii)(b) of the Act states that the purpose for introducing proviso to clause (b) to section 56(2)(vii) of the Act was to avoid taxable differential arising due to time gap between the booking of a property and registration of sale deed.
In the instant case, on the date of allotment the building was under construction and even on the date of registration of sale deed the assessee had not taken possession of the immovable property. The assessee had acquired right in the ownership of the flat at the time of issuance of allotment letter. Therefore, in the facts of the case, stamp duty value as on the date of allotment of flat is relevant. Followed PCIT v. Vembu Vaidyantahn (2019) 413 ITR 248 (Bom.)(HC) (SLP of revenue is dismissed PCIT v. Vembu Vaidyanathan (2019) 265 Taxman 535 (SC). (ITA No. 7120/Mum/2018 dated November 09, 2022) (AY 2014-15)
ITO v. Rajni D. Saini (Mum.)(Trib.) (www.itatonline.org)
[Coram : Hon’ble Shri G. S. Pannu, President & Hon’ble Shri Vikas Awasthy, Judicial Member]