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2025 (3) TMI 807 - AT - Income TaxAddition u/s 56(2)(vii)(b)(ii) - differential amount of the stamp duty valuation and the purchase value added in the income of the Assessee - HELD THAT - As observed by this Court that admittedly the difference in the stamp duty value and the purchase value as declared by the Assessee of unit no.307 is of Rs. 5, 14, 461/- which is below than the amount equal to 5% of the consideration as per exception carved out in the provisions of section 56(2) (x) (b) (B) (ii) and section 50(c) of the Act. Though the provisions of section 56(2)(x) and section 50(c) of the Act are not applicable to the instant case as this case pertains to A.Y. 2015-16 however such provisions are corollary to the provisions of section 56(2)(vii) of the Act as applicable to the instant case hence this Court considering the peculiar facts and circumstances in totality the Assessee s prayer for taking a lenient/liberal view the substantial justice and in order to cut short the litigation is inclined to delete the addition of Rs. 5, 14, 461/- being difference between stamp duty value of Rs. 1, 35, 96, 759/- minus purchase value of Rs. 1, 30, 82, 298/- of unit no 307 being covered under exception carved out in the provisions of section 56(2) (x) (b)(B)(ii) of the Act. Thus the addition of Rs. 5, 14, 461/- (pertaining to unit no 307) is deleted. Resultantly addition Assessee gets part relief. Appeal filed by the Assessee stands partly allowed.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS Relevant legal framework and precedents: The case revolves around Section 56(2)(vii)(b) of the Income Tax Act, which mandates the addition of the difference between the purchase value and the stamp duty value of a property as income from other sources if the purchase value is less than the stamp duty value. The provisions of Section 56(2)(x)(b)(B)(ii) and Section 50(c), although not directly applicable to the assessment year in question, provide a framework for exceptions where the difference is within a specified threshold. Court's interpretation and reasoning: The Court considered the Assessee's argument that the stamp duty valuation was estimated and that different rates should apply for office and parking areas. The Court noted that the Assessee himself submitted the stamp duty value as per the ready reckoner of 2010, which was accepted by the Commissioner, leading to a reduction in the addition amount. Key evidence and findings: The Assessee purchased two commercial properties, and the Assessing Officer (AO) noted a discrepancy between the purchase price and the stamp duty value. The Assessee argued that the registrar's valuation was estimated and inconsistent in applying rates for different property areas. The Commissioner accepted the Assessee's ready reckoner values, reducing the addition amount from Rs. 28,85,923 to Rs. 17,81,145. Application of law to facts: The Court applied the provisions of Section 56(2)(vii)(b) to determine the income addition. The Court also considered the Assessee's arguments and the Commissioner's acceptance of the ready reckoner values. Despite the non-applicability of Section 56(2)(x)(b)(B)(ii) and Section 50(c) for the assessment year, the Court took a lenient view based on the principles underlying these provisions. Treatment of competing arguments: The Assessee's argument regarding the estimated nature of the stamp duty valuation was partially accepted by the Commissioner, leading to a reduction in the addition amount. The Court further reduced the addition by considering the leniency principles from Section 56(2)(x)(b)(B)(ii) and Section 50(c). Conclusions: The Court concluded that the Assessee's submission regarding the ready reckoner values was valid, and the addition should be reduced to Rs. 12,66,684, granting partial relief to the Assessee. SIGNIFICANT HOLDINGS Preserve verbatim quotes of crucial legal reasoning: The Court noted, "The Assessee himself has submitted the stamp duty value of the property as per ready reckoner 2010 to the tune of Rs. 89,33,463/- for unit no.306 and Rs. 1,35,96,759/- for unit no.307, which was accepted by the Ld. Commissioner." Core principles established:
Final determinations on each issue:
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