Stamp Duty Value Difference Leads to Addition of Rs.1.28 Crore: ITAT Upholds CIT(A)'s Decision [Read Order]

The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) dismissed the appeal filed by the assessee regarding the addition of Rs. 1.28 crore under Section 56(2)(vii)(b)(ii) of Income Tax Act,1961 on account of stamp duty value difference in a property purchase.

Tejas C Joshi,appellant-assessee,filed his return of income for Assessment Year 2015-16 on 30.03.2016, declaring Rs.45,46,760/- as total income. His case was selected for limited scrutiny. During assessment, it was found that he bought a property for Rs.10,28,28,600/- on 10.03.2015. The appellant paid additional stamp duty after the Deputy Collector valued the property at Rs.12,79,67,530/-.

The Assessing Officer(AO) noted that the stamp duty value was higher than the consideration paid. As a result, the AO added the difference of Rs.2,51,39,530/- as income under Section 56(2)(vii)(b)(ii) of the  Act.

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The assessee, being aggrieved  with the order, appealed to the Commissioner of Income Tax(Appeals)[CIT(A)], who granted partial relief by reducing the addition under Section 56(2)(vii)(b)(ii) to Rs.1,28,54,000/- based on the Departmental Valuation Officer (DVO)'s report.

The assessee then appealed before the tribunal.

A 57-day delay occurred in filing the appeal. The assessee explained that the delay happened because the Accountant, Shri Mehul Jayantilal Shah, was busy with accounts and tax returns. The assessee was also out of the country for a while. An affidavit from the Accountant was provided. The delay was condoned based on this explanation.

The two member bench comprising T.R Senthil Kumar (Judicial Member) and Narendra Prasad Sinha(Accountant Member) reviewed the submissions and found no dispute that the property’s value in the sale deed was Rs.10,28,28,000/-. The assessee argued that the land was 4674 sq.mtr., not 7790 sq.mtr., but the tribunal noted that the sale deed mentioned a total area of 7790 sq.mtr., with 4674 sq.mtr. being the final plot.

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The key issue was the stamp duty value of Rs.12,79,67,530/-, which the assessee disputed, leading to a reference to the DVO. The CIT(A) granted partial relief, reducing the addition to Rs.1,28,54,000/- based on the DVO’s report.

The tribunal found that the CIT(A) had addressed all objections, including the 15% variation claim, which was not applicable under the law. It upheld the addition of Rs.1,28,54,000/- under Section 56(2)(vii)(b)(ii), agreeing with the CIT(A)’s decision.

In short,the appeal filed by the assessee was dismissed.

To Read the full text of the Order CLICK HERE

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