INCOME TAX ACT, 1961

Section 56(2)(vii)(b)

Income from other sources - Addition made under section 56(2)(vii)(b) - Difference between the market value and purchase consideration on date of registration of sale -

Assessee had booked a residential flat during the financial year 2012-13. The total consideration at the time of booking of the flat was fixed at Rs. 1,05,60,000. The assessee paid Rs. 5 lacs on the date of booking vide cheque dated 14-7-2012 and paid another sum of Rs. 22,50,000 by way of cheque dated 17-8-2012. A perusal of allotment letter would show that the developer has acknowledged receipt of Rs. 27,50,000 paid by the assessee in 2012 and has reiterated total consideration of the flat at Rs. 1,05,60,000 as mentioned in the initial letter dated 2-8-2012. The sale agreement was executed on 7-2-2014, the consideration was fixed during the Financial Year 2012-13 when the flat was booked. It was submitted that the stamp duty valuation in August 2012 when the flat was booked was Rs. 98,68,000. The present case, the consideration for purchase of flat was mutually agree in August, 2012 when the assessee had booked the flat. The flat number and the total consideration was specified in the booking letter. Thus, the case of the assessee is squarely covered by the proviso to section 56(2)(vii)(b) of the Act. Held: A bare perusal of first proviso to sub-clause (b) mandates that where the date of agreement fixing the amount of consideration of immovable property and the date of registration is not the same, the stamp duty value on the date of agreement shall be taken for the purpose of sub clause (b). In the present case, the sale consideration of the flat was agreed on 2-8-2012. It is pertinent to mention here that the term 'agreement' used in proviso to sub-clause (b) does not necessarily mean a document with the title agreement. This would also include a first document by whatever name called, that reflects the intention of the parties mutually agreeing to fix amount of consideration. In our considered view, in the instant case the Proviso to sub clause (b) of section 56(2)(vii) of the Act gets attracted and the Stamp Duty value as on the date of booking the flat wherein the consideration was mutually agreed between the parties was fixed shall be taken for the purpose of sub clause (b). The provision of section 56(2)(vii)(b) of the Act does not envisage transfer of ownership for determination of stamp duty value. The determination of stamp duty value hinges on the date of agreement fixing the amount of consideration for transfer of immovable property. In the present case, the date is 2-8-2012, i.e. the date of booking the flat. At the time of booking flat the total amount of consideration was fixed between the parties. The date of transfer of title in immovable property has no significance under the provisions of section 56(2)(vii)(b) of the Act.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2014-15

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