Curative tolerance band for stamp duty variation held applicable, so marginal difference in property valuation was not taxable.

A curative and beneficial enhancement of the tolerance band for comparing purchase consideration with stamp duty value was treated as applicable to Assessment Year 2018-19. On the facts, the variation of 7.44% fell within the revised 10% band, so section 56(2)(x)(b)(B) could not be invoked to tax the marginal difference. The Tribunal noted that the deeming provision should not extend to small valuation differences covered by the amended tolerance limit, and the Revenue's reliance on the general presumption against retrospectivity did not prevail over the beneficial character of the amendment. The addition was deleted.

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Issues: Whether the addition made under section 56(2)(x)(b)(B) of the Income-tax Act, 1961, on account of difference between the purchase consideration and the stamp duty value of immovable property, could be sustained for Assessment Year 2018-19 when the variation was 7.44% and the amended 10% tolerance band was claimed to be applicable retrospectively.

Analysis: The assessee purchased immovable property for Rs. 1,50,00,000/- against a stamp duty valuation of Rs. 1,61,16,500/-, resulting in a difference of Rs. 11,16,500/- or 7.44%. The Tribunal noted the consistent view of coordinate benches that the enhancement of the tolerance band from 5% to 10% is curative and beneficial in nature and is to be applied to Assessment Year 2018-19. It further held that the deeming provision under section 56(2)(x)(b)(B) cannot be extended to tax marginal variations that fall within the revised tolerance band, and that the Revenue's reliance on the general presumption against retrospectivity did not override the beneficial character of the amendment.

Conclusion: The addition under section 56(2)(x)(b)(B) was not sustainable and was directed to be deleted.

Ratio Decidendi: A curative and beneficial amendment enhancing the tolerance band for marginal difference between purchase consideration and stamp duty value applies retrospectively to pending assessments, and no addition can be made where the variation remains within that tolerance band.

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