Taxation of undervalued immovable property turns on the operative purchase document, not an earlier booking or earnest payment.

Section 56(2)(vii)(b) was applied to an immovable property purchase where the Tribunal found the operative acquisition date to be the registered agreement for sale executed in 2014, not the earlier allotment letter and advance payment in 2012. It treated the 2012 amount as earnest money and concluded that the flat was received under the 2014 agreement, so the difference between stamp duty value and stated consideration remained taxable. Authorities cited by the assessee were distinguished on their facts, and the addition was sustained.

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Issues: Whether the addition under section 56(2)(vii)(b) on account of difference between the stamp duty value and the stated purchase consideration of an immovable property was sustainable where the assessee claimed that the relevant acquisition date was the allotment and advance payment made in 2012, while the registered agreement for sale was executed in 2014.

Analysis: The assessee claimed that the allotment letter and advance payment in 2012 conferred enforceable rights in the flat and that the transaction therefore fell outside the scope of the provision for the relevant assessment year. The Tribunal found that the allotment letter only recorded booking and earnest money, whereas the agreement for sale executed on 10.09.2014 was the operative document for purchase. It held that the 2012 payment was merely earnest money and that the immovable property was received under the registered agreement in 2014. On that basis, the Tribunal applied section 56(2)(vii)(b), which taxs receipt of immovable property for inadequate consideration where the difference exceeds the prescribed threshold, and rejected the argument based on an earlier allotment date. The authorities relied upon by the assessee were distinguished on their facts.

Conclusion: The addition was rightly sustained and the assessee's challenge failed.

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