Allotment letter as agreement to sell under section 56(2)(x) permits stamp value on allotment date and proportionate valuation.

A document fixing consideration, identifying the property, and setting a payment schedule linked to construction milestones can be treated as an agreement to sell for the proviso to section 56(2)(x), rather than a mere letter of intent. On that basis, stamp duty value is to be taken with reference to the allotment date. Where the property is jointly allotted and the consideration and ownership are shared equally, the valuation and resulting addition must be confined to the assessee's proportionate 50% share. The matter was restored for limited re-determination accordingly, granting relief on the core valuation issue.

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Issues: (i) whether an allotment letter fixing consideration and containing the payment schedule could be treated as an agreement for the purposes of the proviso to section 56(2)(x) of the Income-tax Act, 1961; (ii) whether the addition should be restricted to the assessee's 50% share in the jointly held property.

Issue (i): whether an allotment letter fixing consideration and containing the payment schedule could be treated as an agreement for the purposes of the proviso to section 56(2)(x) of the Income-tax Act, 1961

Analysis: The allotment letter recorded the parties, property description, fixed consideration, instalment schedule linked to construction milestones, and other contractual conditions. It was supported by payments made through banking channels prior to registration. On these features, the document was treated as a complete agreement fixing consideration, and not as a mere tentative letter of intent. The proviso to section 56(2)(x) was therefore held applicable, requiring stamp duty value to be taken as on the date of the allotment letter.

Conclusion: The allotment letter was held to be akin to an agreement to sell, and the proviso to section 56(2)(x) was held applicable in favour of the assessee.

Issue (ii): whether the addition should be restricted to the assessee's 50% share in the jointly held property

Analysis: The property was allotted jointly in favour of the assessee and his wife, and material was placed to show that the consideration and ownership were shared equally. The valuation exercise was therefore required to be confined to the assessee's extent of holding while determining the addition.

Conclusion: The Assessing Officer was directed to restrict the valuation and consequential addition to the assessee's 50% share.

Final Conclusion: The matter was restored to the Assessing Officer for limited re-determination of stamp duty value on the date of allotment and to confine the exercise to the assessee's proportionate share, resulting in relief to the assessee on the core issue.

Ratio Decidendi: For the proviso to section 56(2)(x), a document that fixes consideration and contains the essential terms of transfer, including a payment schedule backed by non-cash payments, can be treated as an agreement to sell for adoption of stamp duty value on the agreement date.

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