ITAT directs AO to consider  stamp duty value on  date of Letter of Allotment for making addition u/s  56(2)(vii)(b) I.T Act [Read Order]

The Income Tax Appellate Tribunal (ITAT), Mumbai bench, directed the Assessing Officer (AO) to consider the stamp duty value on the date of the letter of allotment for making additions under section 56(vii)(b) of the Income Tax Act, 1961.

After filing the return of income, the assessee, Rekha Singh, had her case selected for scrutiny. The AO observed that she had purchased an immovable property jointly with her husband for ₹84,15,300, and the consideration was paid by both co-owners.

The AO noted that the purchased value was ₹84,15,300, while the Stamp Duty Authority determined the property's value at ₹1,32,82,000. Consequently, the AO made an addition under section 56(vii)(b) of the Income Tax Act.

The assessee appealed to the CIT(A), who rejected it, justifying the AO's addition of ₹24,33,350 under section 56(2)(vii)(b) of the Act.

In response, the assessee filed a second appeal before the tribunal. The counsel argued that, per the proviso to section 56(2)(vii), the Stamp Duty value on the date of agreement should be considered if the dates of agreement and registration differ, provided consideration is paid before the agreement's date.

The counsel further argued that since the property was purchased jointly, it's irrelevant who made the payment before registration.

The Tribunal, after reviewing the facts, directed the AO to consider the stamp duty value on the date of allotment (16.10.2010) for section 56(2)(vii)(b) purposes, not the value on the registration date.

To Read the full text of the Order CLICK HERE

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