Discrepancy Between Purchase Price and Stamp Duty Value of Land u/s 56(2)(x): ITAT Directs AO to Reconsider Using DVO Valuation [Read Order]

The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) sets aside the addition of ₹44,95,500 made under section 56(2)(x) of Income Tax Act,1961, on account of the discrepancy between the purchase price and the stamp duty value of a jointly held property, and directs the Assessing Officer (AO) to reconsider the matter using a fresh valuation from the District Valuation Officer (DVO).

Debasis Das,appellant-assessee, filed hisincome tax return for the assessment year 2020-21 on 12.11.2020, declaring a taxable income of ₹19,98,390, which was processed under section 143(1) of the Act.

During scrutiny, it was observed that he had purchased a plot of land jointly with his wife, Smt. Nineesha Das, for ₹79,92,000, whereas the stamp duty value of the property was ₹1,39,86,000. The appellant’s share in the property was 3/4th, and the remaining 1/4th belonged to his wife.

The AO issued a notice asking why the difference between the purchase price and the stamp duty value should not be treated as income under section 56(2)(x). The asssessee did not respond to the notice.

Consequently, the AO completed the assessment under section 143(3) read with section 144B on 24.05.2022, adding ₹44,95,500, representing 3/4th of the difference between the purchase price and the stamp duty value of ₹59,94,000.

On appeal, the Commissioner of Income Tax (Appeals) [CIT(A)] confirmed the addition made by the AO.

The assessee counsel stated that in the case of the appellant’s wife, Smt. Nineesha Das (ITA No. 794/Kol/2025, dated 15.07.2025), the Tribunal had set aside the addition made for the difference between the sale price and the fair market value of the property. The AO was directed to obtain a valuation from the DVO and reconsider the issue before making any addition under section 56(2)(x).

Since the present appeal involved the appellant’s 3/4th share in the same property, the counsel requested that the matter be sent back to the AO for fresh consideration along with the wife’s case.

The Departmental counsel agreed that the matter could be remitted to the AO in line with the tribunal’s direction in the wife’s case.

The two member bench comprising Sonjoy Sarma (Judicial Member) and Manjunatha G (Accountant Member) after hearing the parties and reviewing the records and lower authorities’ orders, noted that the assessee and his wife had purchased a plot of land for ₹79,92,000, while the stamp duty authority valued it at ₹1,39,86,000.

The assessee held a 3/4th share, and his wife held 1/4th. The AO had added ₹44,95,500 under section 56(2)(x), representing 3/4th of the difference between the stamp duty value and the purchase price.

The appellate tribunal observed that the wife’s case, Smt. Nineesha Das (ITA No. 794/Kol/2025), on the same issue, had been remitted to the AO with directions to reconsider the matter after obtaining a valuation from the DVO.

Since the present appeal involved the same 3/4th share issue, the tribunal set aside the matter to the AO for fresh consideration along with the wife’s case, applying the fair market value as determined by the DVO while taking into account the registered sale price under section 56(2)(x).

Accordingly the appeal was allowed for statistical purposes.

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