TaxTMI 
TaxTMI 
2025 (7) TMI 1481
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....as raised the following grounds of appeal : "1. On the facts and in the circumstances of the case and in law the Hon'ble Dispute Resolution Panel (DRP), Mumbai erred in upholding the proposed addition made by the Ld. Income Tax Officer (IT) Ward-2, Pune (hereinafter called as the Assessing Officer) of Rs. 7,75,000/- u/s.56(2)(x) of the I.T. Act, 1961 in the Draft Order passed by her u/s.144C(1) of the Act dated 04/07/2024 in the Directions given by the DRP u/s.144C(5) of the said Act dated 20/12/2024 ignoring and without appreciating the facts that such addition made in the Draft Order by the Assessing Officer was against the factual and legal genuine claim made by the appellant that in view of the detailed submissions made bot....
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....ve to add, alter, delete, amend, withdraw, modify, change or substitute any ground or grounds of appeal or to add any new ground or grounds of appeal during or before the hearing of the appeal." Findings and Analysis : 2. We have heard both the parties and perused the documents filed. As per the Assessment Order Assessee Gurudev Chandrashekar Karanth is an individual residing in California, United States of America during the year. The Assessee had stayed in India for 21 days during F.Y.2017-18, hence as per Section 6 of the Income Tax Act, the assessee's status is Non Resident for AY 2018-19. 2.1 The assessee had purchased along with his wife Smt.Isha Bhatt Flat Number 4101, Building Alpine, Thakur Village Road, Phase-1, Samata Na....
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..... 7,75,500/- (which was the difference between the Value of the impugned Flat as per DVO and price paid by the assessee), u/s.56(2)(x) of the Act. Aggrieved by the Draft Assessment Order the Assessee filed Objections before the Dispute Resolution Panel. The DRP held as under : "5.3. Discussion of the Issue by DRP: 5.3.1 In this case, the AO has proposed an addition of Rs. 7,75,500/- u/s 56(2)(x) of the Act being the difference in the difference in the Fair Market Value (FMV) determined by the Valuation Officer, Valuation Cell. Mumbai and the actual purchase consideration of the immovable property ETAX DEPAR 5.3.2 The applicant assessee has argued that the FMV determined by the Valuation Officer was Rs. 1,90,67,000....
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....the Assessee was NRI and source of funds for purchase of flat number 4101, Building Alpine, Kandivali Mumbai was Income earned outside India. During the Assessment proceedings the Assessee had submitted Copies of his Passport, bank statements, employment details which has been accepted by the AO. 4. The only dispute is addition of Rs. 7,75,500/- which was the difference in the Value decided by DVO and the purchase price paid by the assessee as per the Registered Agreement. The difference of Rs. 7,75,500/- is 4 % only of the Value Decided by DVO. 5. Section 56(2)(x) was amended by Finance Act, 2018, the amended section is reproduced here as under : "56(2)(x) where any person receives, in any previous year, from any person or p....
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..... This amendment is with effect from 01/04/2019. 6.1 The relevant paragraph of the Finance Bill 2018 explaining the impugned amendment is reproduced here as under to understand the intention of the Hon'ble legislators: Quote, "Rationalization of section 43CA, section 50C and section 56. At present, while taxing income from capital gains (section 50C), business profits (section 43CA) and other sources (section 56) arising out of transactions in immovable property, the sale consideration or stamp duty value, whichever is higher is adopted. The difference is taxed as income both in the hands of the purchaser and the seller. It has been pointed out that this variation can occur in respect of similar properties in the same area becau....
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....her contentions raised in the present appeal become academic at this stage and therefore are left open. Thus, the addition made under section 56(2)(x) of the Act is deleted. As a result, the impugned order is set aside and grounds raised by the assessee are allowed." Unquote. 7.2 ITAT Mumbai Bench in the case of Glory Shipmanagement Pvt. Ltd. Vs. CIT ITA No.3149/Mum/2023 for A.Y.2018-19 vide order dated 30/01/2024 held as under : Quote, "10. Consistent with the view taken by the Tribunal in the above decisions, we hold that the benefit of tolerance band of 10% shall be available to the Appellant for the Assessment Year 2018-19. Since, in the present case, admittedly the variation is purchase consideration and the fair market val....