Allotment letter as agreement under section 56(2)(vii)(b) allows stamp duty value on the earlier agreement date.

An allotment letter can qualify as an agreement for the proviso to section 56(2)(vii)(b) where it identifies the immovable property, fixes the consideration, sets out the payment schedule and is supported by part payment through non-cash mode before registration. On those facts, the document satisfied the statutory requirement of a prior agreement, allowing the stamp duty value to be taken as on the date of the allotment letter rather than the later registration date. The addition based on the higher registration-date value was therefore deleted.

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Issues: (i) Whether an allotment letter fixing the consideration and accompanied by part payment before registration could be treated as an agreement for applying the proviso to section 56(2)(vii)(b) of the Income-tax Act, 1961, so that the stamp duty value on the date of allotment could be adopted instead of the value on the date of registration.

Analysis: The proviso to section 56(2)(vii)(b) applies where an agreement fixing the consideration for transfer of immovable property exists and some part of the consideration has been paid by a mode other than cash on or before the date of that agreement. The allotment letter in question identified the flat, fixed the consideration, set out the payment schedule, and created exclusivity in favour of the assessee. The bank records showed part payment through cheque before the registered sale deed. The document therefore satisfied the essential elements of an enforceable contract and met the statutory conditions for invoking the proviso.

Conclusion: The allotment letter was accepted as an agreement for the purposes of the proviso to section 56(2)(vii)(b), and the addition based on the higher stamp duty value at registration was deleted.

Ratio Decidendi: For the proviso to section 56(2)(vii)(b) to apply, a pre-registration document that fixes consideration and is acted upon by part payment through non-cash mode can be treated as the relevant agreement for adopting the stamp duty value on the date of such agreement.

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