The Income Tax Appellate Tribunal (ITAT), Mumbai Bench held that stamp duty value on the date of allotment is to be taken for the purposes of Section 56(2)(vii)(b) of the Income Tax Act, instead of date of registration.
Assessee had a return of income declaring total income at ₹ 5,93,520/- filed on 27.08.2015. The case was subject to limited scrutiny assessment and notice under Section 143(2) of the Income Tax Act was issued and served upon the assessee.
During the course of assessment the AO observed that the assessee has purchased immovable property for a consideration of ₹ 84,15,300/- as a co-owner jointly with her husband Ajay Kumar Singh.
The purchased consideration was paid by both the co-owner. The assessee was a co-owner of the property having 50% share. The AO noticed that purchased value of the property was of ₹
84,15,300/- whereas the value of the property determined by the Stamp Duty Authority was ₹1,32,82,000/-.
Since, the value determined by the Stamp Duty Authority was more than the agreement value of the property, therefore, the AO was of the view that provision of section 56(2)(vii)(b) of the Income Tax Act was to be applied.
On query the assessee explained that as per the proviso to section 56(2)(vii) of the Act where date of agreement fixing amount of consideration for the transfer of immovable property and the date of registration are not the same, the Stamp Duty value on date of agreement may be taken for the purpose of this clause provided that the amount of consideration has been paid by any mode other than cash on or before the date of agreement for the transfer of such immovable property.
In the case of the assessee the date of the agreement was 16.12.2010 whereas the purchase deed was registered on 29.12.2014.
The Counsel submitted that since the agreement for the property was entered on 16.12.2010, therefore, the same should be taken for the purpose of Section 56(2)(vii)(v) of the Income Tax Act and not the date of registration being 28.12.2014.
The Counsel has also placed reliance on the decision of the co-ordinate bench, Mumbai in the case of Poonam Ramesh Shahjwan V/s ITO(IT) 4(2)(1) [A.Y. 2014-15] and the decision of ITAT, Pune in the case of Sanjay Dattatrya Dapodikar V/s ITO, Ward 6(2) (2019).
The Counsel also filed a paper book comprising copies of letter of allotment, registered agreement for sale and stamp duty value of the property.
On the contrary, the revenue representative, Ajay Singh, supported the order of the CIT(A).
The Tribunal Bench of Judicial Member Kuldip Singh and Accountant Member Amarjit Singh observed that, “The registration of the purchased property was made on 29.12.1014. However, the property was allotted as per the letter of allotment filed dated 16.12.2010. The first cheque for payment towards the purchase of the property was made on 18.12.2010. The assessee has paid ₹ 27,73,980/- before registration of the agreement with the registrar of stamps, Maharashtra.”
As per proviso to section 56(2)(vii)(b) as reproduced as above provides that where the date of agreement fixing amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of agreement may be taken for the purpose of the aforesaid provision, provided on or before a part of the consideration has been paid by any mode other than cash, the bench observed.
The bench, also found that, in the case of Poonam Ramesh Shahjwan wherein on the similar facts the value of the flat was determined on the date of booking of flat after taking into consideration the payment made by the assessee through banking channel before the registration of the flat as laid down in the proviso to Section 56(2)(vii)(b) of the Income Tax Act.
Thus the bench directed the AO, that the stamp duty value on the date of allotment in the case of the assessee on 16.10.2010, to be taken for the purpose of Section 56(2)(vii)(b) of the Income Tax Act and not stamp value as on the date of registration of sale deed.
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