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2025 (3) TMI 710 - AT - Income TaxReopening of assessment u/s 147 - addition made u/s 56(2)(vii)(b) on difference between the registered value and the set forth value of Flat - HELD THAT - Assessee entered into an agreement and the allotment letter was duly issued by the promoter. The payment was made through banking channels. Therefore the stamp duty valuation of the property should be taken as on the date of allotment i.e. F.Y. 2009-10. Upon perusal of the valuation report it is noted that the valuation of the property as determined by the registered valuer. There is no discrepancy in the purchase value declared by the assessee. Consequently the addition representing the difference between the set forth value and the stamp duty value cannot be sustained in the impugned assessment year. Accordingly the said addition is quashed. Further we remit the matter to the file of the Ld. AO with a direction to consider the stamp duty valuation as per the financial year of the agreement i.e. F.Y. 2009-10 and to recompute the assessment accordingly. Assessee should get reasonable opportunity of hearing in set aside assessment proceeding. The impugned appeal order is set aside and the matter is remanded to the Ld. AO for this limited purpose.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS 1. Validity of Reopening of Assessment The relevant legal framework involves Section 147 of the Income Tax Act, which allows for the reopening of an assessment if the A.O. has reason to believe that income has escaped assessment. The Court's interpretation focused on whether the procedural requirements for reopening were adhered to. The Court did not provide detailed reasoning on this issue, as it was not the primary focus of the appeal. The emphasis was on procedural compliance, and no specific evidence or findings were highlighted regarding this issue. 2. Validity of Assessment Order Due to Jurisdictional Issues The legal question here pertains to the authority of the Jurisdictional Assessing Officer in issuing notices. The Court considered whether the proper authority issued the notices and whether this affected the validity of the assessment order. The Court did not delve deeply into this issue, as the primary contention revolved around the addition under Section 56(2)(vii)(b). No specific findings or evidence were discussed in relation to jurisdictional issues. 3. Validity of Assessment Order Due to Lack of DIN Section 148 of the Income Tax Act requires a valid DIN for notices. The Court briefly considered whether the absence of a DIN rendered the assessment order invalid. Again, the Court did not focus extensively on this procedural issue, as the main contention was the substantive addition under Section 56(2)(vii)(b). 4. Addition of Rs. 97,72,517/- Under Section 56(2)(vii)(b) The relevant legal framework is Section 56(2)(vii)(b) of the Income Tax Act, which deals with the taxation of immovable property transactions where the consideration is less than the stamp duty value. The Court's interpretation centered on the proviso to this section, which allows for the consideration of the stamp duty value as on the date of the agreement if certain conditions are met. The key evidence included the allotment letter dated 08/11/2009, payment details, and a valuation report from a government-approved valuer. The Court found that the payments were made through banking channels, satisfying the proviso's condition that the consideration should be paid by modes other than cash. The Court concluded that the stamp duty valuation should be considered as on the date of the agreement (F.Y. 2009-10) rather than the date of registration (A.Y. 2017-18). The valuation report supported the assessee's declared purchase value of Rs. 1,05,00,000/-, leading to the conclusion that the addition of Rs. 97,72,517/- was unsustainable. The Court quashed the addition and remanded the matter to the A.O. to recompute the assessment based on the stamp duty valuation as per the financial year of the agreement, ensuring the assessee receives a reasonable opportunity for a hearing. SIGNIFICANT HOLDINGS The Court established the principle that when the date of agreement and registration differ, and the consideration is paid through non-cash modes, the stamp duty valuation as on the date of the agreement should be used for assessment purposes. This interpretation aligns with the proviso to Section 56(2)(vii)(b). The Court's final determination on the key issue was to quash the addition of Rs. 97,72,517/- and remand the matter to the A.O. for reassessment based on the correct valuation date. The judgment emphasizes the importance of adhering to the proviso's conditions to avoid unjust additions based on stamp duty valuations.
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