2026 (7) TMI 494

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....ther:- 1. The Hon' CIT (A) has erred in passing the order in ignorance of the facts and submissions made by the Appellant as well as the provision of Law. 2. The Hon' CIT (A) has erred in confirming the additions made by the Learned AO u/s 56(2) (vii) amounting to Rs. 16.19,770 /-,being the difference between stamp duty value and agreement value of property purchased. 3. The Hon' CIT (A) failed to acknowledge the fact that the Appellant had made the payment as well as booking of the said flat in the stamp Fin Year 2016-17 and therefore the Market Valuations as of Fin year 2016- 17 were applicable to invoke the Provisions of Sec. 56(2)(vii) 4. The Hon' CIT (A) erred in endorsing the finding....

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....uation arose due to revision of reckoner rates with effect from 01/04/2017. Therefore, according to the assessee, the stamp duty value prevailing in F.Y. 2016-17 ought to be adopted for the purpose of section 56(2)(vii). 2.2. The Ld.AO observed that the registered agreement for purchase of the property was dated 29/04/2017 and no documentary evidence was furnished to establish that any agreement had been entered into during F.Y. 2016-17. Since the agreement and registration were in the same financial year, the Ld.AO rejected assessee's contention and adopted the stamp duty value of Rs. 2,34,69,000/- as against the purchase consideration of Rs. 2,18,49,230/-. The differential amount of Rs. 16,19,770/- was treated as income from other sour....

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....e present appeal pertains to the difference between the purchase consideration disclosed by the assessee and the stamp duty valuation adopted by the registration authority. It was contended that the difference between the agreement value of Rs. 2,18,49,230/- and the stamp duty value of Rs. 2,34,69,000/- works out to less than 10% of the consideration. Therefore, in view of the tolerance band provided under the provisions of section 56(2)(vii)(b) of the Act, no addition could be sustained in the hands of the assessee. In support of the aforesaid contention, reliance was placed upon the decision of the Coordinate Bench of the Tribunal in the case of Joseph Mudaliar vs. DCIT reported in (2021) 130 taxmann.com 250, wherein it was held that the ....

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....nd 56(2)(x) of the Act makes the legislative intent abundantly clear that, wherever the statute provides for adoption of the value determined by the stamp valuation authority as deemed consideration, exceptions have also been carved out where the variation between the actual consideration and stamp duty valuation remains within the prescribed tolerance limit. The object behind such amendments is to address genuine hardships arising on account of marginal variations in valuation and to avoid taxation of notional differences. 4.4. We further find that the Coordinate Bench of the Tribunal in Joseph Mudaliar vs. DCIT (supra) held that the benefit of the tolerance band cannot be denied merely because section 56(2)(vii)(b) did not expressly co....