The Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) set aside assessing officers decision under Section 56(2) (x) of the Income Tax Act, 1961 due to failure to consider sale consideration of immovable property as per sale agreement with stamp duty valuation.
The assessment proceedings the Assessing Officer noted that the Appellant had purchased an immovable property along with Shri Pritam Ludhani from M/s Lotus Grah Nirman Private Limited by way of Agreement for Sale, dated 12/08/2017, which was registered on 07/12/2017. The Assessing Officer further noted that as per the Agreement the consideration for purchase of immovable property was INR 81,49,250/- whereas the stamp duty valuation stood at INR 1,61,55,000/-.
Therefore, concluded that purchase consideration for acquisition of the aforesaid immovable property was less than the stamp duty value by INR 80,05,750/- and out of the same Appellant’s share, as computed by the Assessing Officer on the basis of actual payments made, was at 69.95%.
The bench observed that the appellant is entitled to the benefit of the provisions to Section 56(2) (x) of the Income Tax Act in the present case. Accordingly, the stamp duty valuation as on the date of Allotment letter should be considered for the purposes of Section 56(2) (x) of the Income Tax Act. Hence the AO was not justified in considering the stamp duty valuation as on the Sale Agreement.
The tribunal, consisting of Om Prakash Kant (Accountant member) and Rahul Chaudhary (Judicial member), set aside the addition of INR 56,00,022/- under Section 56(2)(x) of the Income Tax Act was set aside. They directed the Assessing Officer to compare the sale consideration of the immovable property as per the sale agreement with the stamp duty valuation as of the date of the Allotment Letter. Subsequently, the Assessing Officer was instructed to make a decision in accordance with the law, ensuring the Appellant was given ample opportunity to be heard. Consequently, the Assessee’s current appeal was partially allowed.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
