Retrospective tolerance band for stamp duty valuation protects minor property price differences from anti-avoidance adjustment.

A curative enhancement of the tolerance band between declared consideration and stamp duty value was treated as retrospective, so a difference of 8.5% fell within the permissible range and did not trigger anti-avoidance adjustment. The Tribunal applied this approach to section 56(2)(vii)(b) as well as the related stamp duty valuation rule, holding that small bona fide variations within the tolerated band should not result in addition. On that basis, the assessment addition based on the property valuation difference was deleted and the matter was decided in favour of the assessee.

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Issues: Whether the addition made under section 56(2)(vii)(b) of the Income-tax Act, 1961, on account of the difference between the purchase consideration and the stamp duty valuation of immovable property could survive when the variation was less than 10% and the enhanced tolerance limit under the third proviso to section 50C(1) was relied upon.

Analysis: The Tribunal noted that the difference between the stated consideration and the stamp duty value was 8.5%, i.e. below 10%. It treated the tolerance limit introduced in section 50C as curative in nature and held that the enhancement to 10% related back to the date of insertion of the provision, applying equally to section 56(2)(vii)(b). On that basis, the Tribunal accepted that small bona fide variations within the permissible band should not trigger the anti-avoidance adjustment.

Conclusion: The addition was deleted and the issue was decided in favour of the assessee.

Final Conclusion: The assessment addition based on stamp duty valuation did not survive, and the appeal was allowed.

Ratio Decidendi: A curative enhancement of the permissible variation between declared consideration and stamp duty valuation applies retrospectively and excludes anti-avoidance taxation where the difference remains within the tolerated band.

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