2026 (4) TMI 648

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....n of Rs.26131486/- should not have been confirmed. Reasons assigned by him are wrong and insufficient to justify addition of Rs.26131486/- made by the learned Assessing Officer. 2. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax - Appeals erred in arriving at the conclusion that First proviso to section 56(2)(x) of the Act is not applicable to appellant's case and thereby erred in confirming addition of Rs.26131486/- made by the learned Assessing Officer. Provisions of the Act ought to have been properly construed and regard being had to facts of the case First proviso to section 56(2)(x) of the Act should be made applicable to the appellant's case. 3. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax - Appeals failed to appreciate that provision of section 56(2)(x) is not applicable to appellant's case erred in confirming addition of Rs.26131486/- to the total income of the appellant. 4. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax - Appeals failed to consider report of Departmental Valua....

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.... Since the Stamp Duty Authority made valuation of the flats on the date of the agreement for sale, i.e. on 18/03/2020, at INR 8,05,39,971, the difference between the sale consideration and value determined by the Stamp Duty Authority, i.e. INR 5,80,69,971, was considered as taxable under section 56(2)(x)(b) of the Act. Since the assessee's share was only 45%, the Assessing Officer ("AO"), vide order dated 29/09/2022 passed under section 143(3) of the Act read with section 144B of the Act, made an addition of INR 2,61,31,471 in the hands of the assessee under section 56(2)(x)(b) of the Act. The learned CIT(A), vide impugned order, upheld the addition made by the AO under section 56(2)(x)(b) of the Act and dismissed the ground raised by the assessee on this issue. Being aggrieved, the assessee is in appeal before us. 5. During the hearing, the learned Authorised Representative ("learned AR"), inter alia, submitted that during the assessment proceedings in the case of his brother, i.e. Mr. Deepak O Jain, the AO sought a report from the Department Valuation Officer ("DVO") in respect of the valuation of the aforesaid two flats purchased by the assessee along with his brother. In....

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....aid by way of an account payee cheque or an account payee bank draft or by use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed, on or before the date of agreement for transfer of such immovable property: Provided also that where the stamp duty value of immovable property is disputed by the assessee on grounds mentioned in sub-section (2) of section 50C, the Assessing Officer may refer the valuation of such property to a Valuation Officer, and the provisions of section 50C and sub-section (15) of section 155 shall, as far as may be, apply in relation to the stamp duty value of such property for the purpose of this sub-clause as they apply for valuation of capital asset under those sections;" 8. Thus, as per the 3rd proviso to section 56(2)(x)(b) of the Act, where the stamp duty value of the immovable property is disputed, the AO may refer the valuation of such property to the Valuation Officer, and the provisions of section 50C and section 155(15) of the Act shall apply. In the present case, from the perusal of the assessment order dated 20/04/2023 passed in the case of assessee's brother, i.e. Mr. Deepak O ....

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....ion for stamp duty and the actual consideration is undisputed. 6.1 Before delving on the issue in hand, the relevant provisions of section 56(2)(x) of the Act are extracted below: "Income from other sources. 56(1). . . . . (2) In particular, and without prejudice to the generality of the provisions of sub-section (1), the following incomes, shall be chargeable to income-tax under any of the head "Income from other sources", namely- (i) and (ii) ** ** ** (x) where any person receives, in any previous year, from any person or persons on or after the 1st day of April, 2017,- (a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum; (b) any immovable property, - (A) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property;-(B) for a consideration, the stamp duty value of such property as exceeds such consideration, if the amount of such excess is more than the higher of the following amounts, namely : (i) the amount of fifty thousand rupees; and ....

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.... consideration of a property and stamp duty valuation of the same property, one cannot proceed to draw an inference against the assessee, and subject the assessee to practically prove his being truthful in stating the sale consideration. Clearly, therefore, this insertion of the third proviso to section 50C(1) is in the nature of a remedial measure to address a bona fide situation where there is little justification for invoking an anti-avoidance provision. Similarly, so far as enhancement of tolerance band to 10% by the Finance Act 2020, is concerned, as noted in the CBDT circular itself, it was done in response to the representations of the stakeholders for enhancement in the tolerance band. Once the Government acknowledged this genuine hardship to the taxpayer and addressed the issue by a suitable amendment in law, the next question was what should be a fair tolerance band for variations in these values. As a responsive Government, which is truly the hallmark of the present Government, even though the initial tolerance band level was taken at 5%, in response to the representations by the stakeholders, this tolerance band, or safe harbour provision, was increased to 10%. There is....

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....presentative, however, does not give up. Learned Departmental Representative has suggested that we may mention in our order that "relief is being provided as a special case and this decision may not be considered as a precedent". Nothing can be farther from a judicious approach to the process of dispensation of justice, and such an approach, as is prayed for, is an antithesis of the principle of "equality before the law," which is one of our most cherished constitutional values. Our judicial functioning has to be even-handed, transparent, and predictable, and what we decide for one litigant must hold good for all other similarly placed litigants as well. We, therefore, decline to entertain this plea of the assessee. As has been aptly explained above, the rational for holding newly inserted proviso to sub-section (1) to section 50C of the Act as curative in nature, hence, having retrospective application, the same analogy would apply to the provisions of section 43CA of the Act. Both the sections are similarly worded except that both the sections have application on different sets of assessee. As has been pointed earlier, section 43CA gets attracted where the consideration ....