Curative amendment and indexation principles deleted deemed property additions, while unexplained investment was remanded for verification.

A curative amendment that removes hardship may apply retrospectively, so the 10% tolerance band for comparing stamp duty value with agreement value was applied and the deemed addition under section 56(2)(vii)(b) was deleted. For capital gains, indexation of an under-construction flat was to run from the date of agreement or allotment, when the capital asset right was acquired, not from later instalment payments, and the recomputation addition was deleted. The unexplained investment issue turned on incomplete factual verification of payment and purchase documents, so it was remanded for fresh examination.

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Issues: (i) Whether the addition made by treating the difference between the stamp duty value and the agreement value of the property as income under section 56(2)(vii)(b) was sustainable; (ii) whether the indexed cost of acquisition of the under-construction flat was to be computed from the date of agreement/allotment or from the dates of actual instalment payments; (iii) whether the addition of Rs. 4,99,944 as unexplained investment under section 69 required deletion or fresh verification.

Issue (i): Whether the addition made by treating the difference between the stamp duty value and the agreement value of the property as income under section 56(2)(vii)(b) was sustainable.

Analysis: The difference between the stamp duty value and the consideration was only about 2.3%. The Tribunal held that the tolerance band of 10% was applicable even for the relevant year, relying on the principle that a curative amendment intended to remove hardship operates retrospectively. As the difference fell within the permissible tolerance limit, the deeming addition was not justified.

Conclusion: The addition under section 56(2)(vii)(b) was deleted and the issue was decided in favour of the assessee.

Issue (ii): Whether the indexed cost of acquisition of the under-construction flat was to be computed from the date of agreement/allotment or from the dates of actual instalment payments.

Analysis: The Tribunal accepted the view that, for capital gains computation, the relevant date for indexation is the date on which the capital asset right is acquired through the agreement/allotment, and not the dates on which instalments are actually paid. The assessee's claim was supported by earlier coordinate bench rulings, which were followed.

Conclusion: The addition on account of recomputation of indexed cost was deleted and the issue was decided in favour of the assessee.

Issue (iii): Whether the addition of Rs. 4,99,944 as unexplained investment under section 69 required deletion or fresh verification.

Analysis: The dispute turned on factual reconciliation of the payment evidence and the correct purchase documents. The Tribunal found that the controversy required verification of the documentary record and that the matter had not been properly examined on the correct factual footing. In the interests of justice, the issue was sent back for factual verification after granting adequate opportunity to the assessee.

Conclusion: The addition was not finally deleted at this stage and the matter was remanded for fresh factual verification.

Final Conclusion: The assessee succeeded on the substantive tax additions concerning deemed value difference and indexation, while the unexplained investment issue was restored for verification; the appeal was thus disposed of in the assessee's favour to the extent of the deletions granted.

Ratio Decidendi: A curative amendment removing hardship may apply retrospectively, and for indexation the relevant date is the date of acquisition of the capital asset right, not the dates of subsequent instalment payments; where the factual basis of an addition is not properly verified, the matter may be remanded for fresh examination.

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