The two member bench of Income Tax Appellate Tribunal (ITAT) Mumbai bench directed readjudication with respect to date of acquisition of property to determine the stamp duty value of immovable property sold by the assessee Rajkumar Anandchand Jain.
The assessee is an individual who filed his return of income on 31/10/2018 at a total income of Rs. 5,225,180/– .thereafter assessee case was selected for scrutiny for verification of investment in a property. The issue was purchase of immovable property where the purchase value is less than the stamp value determined by authority.
In this case Assessee has purchased the property for Rs. 3,620,000 values of which for stamp duty purposes Rs. 17,718,500 and therefore there is a difference of Rs. 14,098,500/- which was required to be taxed in the hands of the assessee.
Before the AO the assessee submitted that stamp duty value may be considered as on 1/7/2016, which is the date of allotment of the flat coupled with payment of consideration also.
However Rs. 14,098,500 being the difference between the registration deed value of Rs. 3,620,000 and the stamp duty value as on the date of Rs 17,718,500 was added to the total income of the assessee as income from other sources under section 56 (2) (x) (b) of the Income Tax Act.
Aggrieved by the order, the assessee filed an appeal before the tribunal. After analyzing the submission the CIT(A) upheld the assessment order passed by the AO . Thus the assessee filed a second appeal before the tribunal.
Assessee representative ,Arati Vissanji, argued that assessee was issued an allotment letter on 13 April 2007 wherein assessee was allotted a commercial premises on the third floor and one basement parking in project ‘ Draun Height.
Subsequently, on 6 December 2020 it was stated by the builder to the assessee that the name of the project has changed to Sethia Grandeur and now the characteristics of the project has also changed from commercial project to residential project
Therefore the counsel for assessee argued that allotment was made to the assessee on 13 April 2007 wherein the assessee paid part of the sum by cheque of Rs. 5 lakhs and therefore the stamp duty value as on that date should be taken for the purpose of computation of income under section 56 (2) (x) (b) of the Income Tax Act.
Mahita Nair, the Department representative,submitted that assessee has failed to respond to the any of the notices issued by the learned CIT – A and therefore the learned CIT – A did not have any other option but to decide the issue on the merits of the case wherein he has upheld the action of the learned assessing officer and therefore there is no infirmity in the order of the CIT(A).
The tribunal during the adjudication observed that assessee had paid a sum of Rs 5 lakhs for booking of the commercial property. Further the first appellate authority issued three notices, for adjudicating the issue , which were not responded to by the assessee. Thus, as no information was available before the CIT(A) in the form of submission made by the assessee, he upheld the action of the assessing officer.
Therefore the two-member bench Of Rahul Chaudhary,(Judicial Member) and Prashant Maharishi, (Accountant Member) directed readjudication with respect to date of acquisition of property to determine the stamp duty value of immovable property sold by the assessee
Accordingly the bench allowed the appeal for statistical purposes.
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