Section 56(2)(x) not applicable to pre-1 April 2017 property receipt; stamp duty value addition deleted.

Section 56(2)(x) did not apply to an immovable property transaction registered in July 2016 because the provision, inserted by the Finance Act, 2017 with effect from 1 April 2017, operates only for property received on or after that date. As a deeming fiction, its scope cannot be extended beyond the period expressly covered by the statute. The addition made for the difference between stamp duty value and purchase consideration was therefore deleted for Assessment Year 2017-18, and the remaining grounds became academic.

---

---

Issues: Whether addition made under section 56(2)(x) of the Income-tax Act, 1961 on account of difference between stamp duty value and purchase consideration of immovable property was sustainable for Assessment Year 2017-18.

Analysis: The property was registered in July 2016 and thus was received in the previous year relevant to Assessment Year 2017-18. Section 56(2)(x) was inserted by the Finance Act, 2017 with effect from 1 April 2017 and its language applies only to property received on or after that date. The provision creates a deeming fiction and, as such, its scope cannot be enlarged beyond the period expressly covered. Since the assessment year in question is 2017-18, the provision had no application to the impugned transaction. The other grounds became academic after deletion of the addition.

Conclusion: The addition under section 56(2)(x) was deleted and the assessee succeeded on this issue.

---