TMI Blog2021 (8) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by Ld. AO. It was not a case of new booking but a case wherein the assessee had merely exchanged the flats at the same site to have better location. The area as well as sale consideration was the same and the new flats got substituted from the date of initial booking which is evident from the conduct of the parties.This being the case, the provisions of Sec. 56(2)(vii)(b) as applicable from 01/04/2014 could not have been applied by Ld. AO Proviso to this sub-section provides that where the date of agreement fixing the amount of consideration for the transfer of immoveable property and the date of registration are not the same then the stamp duty value prevailing on the date of agreement may be taken for the purpose of this sub-clause. The said proviso would, alternatively, be applicable to the fact of the case since the consideration has been paid by the assessee though banking channels in terms of requirements of second proviso. Nevertheless, since the provisions of Sec. 56(2)(vii)(b) has been held to be not applicable, the additions made by Ld. AO invoking the said provisions would be unsustainable in law as held by Ranchi Tribunal in Bajrang Lal Naredi [ 2020 (1) TMI 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be brought to the notice of the bench. The Ld. DR, on the other hand, pleaded for restoration of assessment as framed by Ld. AO. Assessment Proceedings 4.1 The material facts are that assessee being non-resident individual purchased two flats viz. 702 703, Green Heights, near New Link Road, Lokhandwala, Andheri (West), Mumbai from a builder i.e., M/s Perfect Constructions for consideration of ₹ 42.99 Lacs ₹ 80 Lacs respectively. However, the stamp duty value of the flats on the date of registration was ₹ 129.39 Lacs ₹ 177.27 Lacs respectively which led Ld. AO to invoke the provisions of Sec. 56(2)(vii)(b) against these transactions. 4.2 The provisions of Sec. 56(2)(vii) were inserted by Finance Act, 2009 w.e.f. 01/10/2009. Clause (b) was inserted in the said Section by Finance Act, 2013 w.e.f. 01/04/2014, which inter-alia, provide that where an individual receives from any person any immoveable property for a consideration which is less than stamp duty value of the property by an amount exceeding ₹ 50,000/- then the stamp duty value of such property as it exceeds such consideration shall be chargeable to tax in the hands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice in full as the builder had not produced original receipts of payment against sale of flat and other documentary evidences. 4.6 Finally, the assessee s submissions were not accepted since the assessee did not furnish allotment letters or agreement for flat nos.1101 1102 specifying the area of the flats. Further, no justification or satisfactory reason was given for entering into agreement after six years of making first payment to the builder. The registered agreement remained silent about all the contentions of the assessee and showed only the lump sum payment. Accordingly, invoking the provisions of Sec.56(2)(vii)(b), the difference between the stamp duty value and agreement value was added to the income of the assessee. Appellate Proceedings 5.1 During appellate proceedings, the assessee pleaded that impugned addition was made by Ld. AO for want of sufficient documentary evidences from the builder. However, Ld. AO overlooked the fact that builder s authorised representative had filed letter dated 28/12/2016 on 29/12/2016. In the said reply, the builder confirmed the fact of change of allotment and filed copies of original allotment letter as well as ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nance Act, 2013 to argue that the said proviso needs to be construed as retrospective in operation, even if the provisions of Section 56(2)(vii)(b) are made applicable in the instant case. 5.4 The assessee also drew attention to builder s letter dated 28/12/2016 filed before Ld. AO which specified the market value of flat Nos. 702 703 as ₹ 44.67 Lacs ₹ 85.39 Lacs respectively as against agreement value of ₹ 42.99 Lacs ₹ 80 Lacs. Thus, the difference in value was only to the extent of ₹ 1.68 Lacs ₹ 5.39 Lacs which was very minuscule reflecting average variation of merely 5%. For this, reliance was placed on the Tribunal decision in John Flower (India) Pvt. Ltd. V/s DCIT (ITA No.7545/Mum/2014 dated 25/01/2017 for A.Y.2010-11) wherein it was held that if the variation between the value adopted by the stamp valuation authority and value declared by the assessee is less than 10%, then no addition could be made in terms of Section 50C of the Act. 5.5 The Ld. CIT(A), taking note of the fact that the entire submissions were not factually examined by Ld. AO and therefore, sought remand report in the case. The Ld. AO, vide remand report d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examine the issue on his own and ultimately held as under: - (a) The assessee had booked the flats way back in F.Y.2007-08 relevant to A.Y.2008-09 itself for which initial payments were also made which are duly supported by allotment letters given by the builder to the assessee. (b) The Ld. AO had lost sight of proviso to Section 56(2)(vii)(b) of the Act which is very clear that the stamp value as on the date of agreement should be considered provided the said payment has been made by the assessee by account payee cheque or account payee demand draft. (c) In the case of assessee, the date of allotment letter supported by the details of payment made on that date has to be considered as the date of purchase of flat. (d) The excess stamp duty value of the two flats considering the year of booking was only ₹ 1.68 Lacs ₹ 5.39 Lacs as tabulated below: - Flat No. Market value in F.Y.2007-08 based on the allotment letter given by the builder (In Rupees) Actual consideration as per the registered document (In Rupees) Difference (In Rupees) 702 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of consideration for the transfer of immoveable property and the date of registration are not the same then the stamp duty value prevailing on the date of agreement may be taken for the purpose of this sub-clause. The said proviso would, alternatively, be applicable to the fact of the case since the consideration has been paid by the assessee though banking channels in terms of requirements of second proviso. Nevertheless, since the provisions of Sec. 56(2)(vii)(b) has been held to be not applicable, the additions made by Ld. AO invoking the said provisions would be unsustainable in law as held by Ranchi Tribunal in Bajrang Lal Naredi Vs ITO (ITA No. 327/Ran/2018 for A.Y.2014-15 dated 20/01/2020) rendered on similar factual matrix. The facts therein were that the stamp duty value on the date of registration of the property on 17/06/2013 was ₹ 22.60 Lacs whereas the stamp duty value at the time of agreement entered into during financial year 2011-12 was ₹ 18,89,350/- as against the actual consideration paid by assessee for ₹ 9,10,000/-. The Ld. AO made similar addition u/s 56(2)(vii)(b) in the hands of assessee purchaser to the extent of ₹ 9,79,350/- ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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