Retrospective tolerance threshold under section 56(2)(x)(b)(B) limits valuation-based addition to the excess over the permissible margin.

The amended tolerance limit under section 56(2)(x)(b)(B) is treated as retrospectively applicable for the relevant assessment year, so the valuation difference is tested against the enhanced statutory threshold rather than the earlier limit. On that basis, only the excess beyond the permissible margin is exposed to addition, and the restricted addition sustained by the appellate authority is upheld. The matter is remanded for giving effect to the incremental adjustment, with only the excess over 10% in Unit No. 103 to be brought to tax.

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Issues: Whether the enhanced tolerance limit under section 56(2)(x)(b)(B) applies retrospectively to the assessment year in question and whether the addition arising from the difference between the stated consideration and the valuation could be restricted accordingly.

Analysis: The dispute turned on the applicability of the amended tolerance threshold under section 56(2)(x)(b)(B) to the relevant assessment year. The Tribunal accepted the view that the amendment is retrospective in operation. On the facts, the difference for the units was to be tested with reference to the allotted date and the valuation basis accepted by the appellate authority, and only the excess over the permissible limit was to be considered for addition. The Tribunal also directed the Assessing Officer to give effect to the incremental adjustment in accordance with the statutory threshold.

Conclusion: The amended tolerance limit was held applicable retrospectively, the restricted addition sustained by the appellate authority was upheld, and the matter was remanded for giving effect to the incremental difference, with the excess over 10% in Unit No. 103 to be brought to tax.

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