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Facts
The assessee purchased a residential flat, and the stamp duty authority valued it higher than the consideration paid. The Assessing Officer treated the difference as income under Section 56(2)(x). The assessee contended that the stamp duty value as on the date of agreement should be considered.
Held
The Tribunal held that the first proviso to Section 56(2)(x) allows for the stamp duty value on the date of agreement to be considered if the date of agreement and registration are different. It also noted that the DVO's valuation was not done with reference to the agreement date.
Key Issues
Whether the stamp duty value as on the date of agreement should be considered for determining income under Section 56(2)(x), especially when the DVO's valuation was not based on the agreement date and the delay in filing the appeal was due to bonafide medical reasons.
Sections Cited
56(2)(x), 50C, 155, 43CA
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Income Tax Appellate Tribunal, MUMBAI BENCH “A” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAJ KUMAR CHAUHAN
ORDER PER OM PRAKASH KANT, AM
This appeal has been preferred by the assessee against order dated 04.06.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2018-19, raising following grounds:
1. On the facts and circumstances of the Appellant's case and in law, the Ld. CIT(A) erred in directing the ld. AO to considered the valuation report of the DVOdespite the fact the appellant has filed
Amarjit Kaur Ranjit Singh Anand Amarjit Kaur Ranjit Singh Anand the valuation report of the independent valuer thereby disputing the valuation report of the independent valuer thereby disputing the valuation report of the independent valuer thereby disputing the DVO's valuation. the DVO's valuation.
2. On the facts and circumstance of the case Appellant's case and 2. On the facts and circumstance of the case Appellant's case and 2. On the facts and circumstance of the case Appellant's case and in law, the Ld. CIT(A) erred inconf in law, the Ld. CIT(A) erred inconfirming addition u/s 56(2)(x) of irming addition u/s 56(2)(x) of the Act, to the extent of Rs. 22,50,000/ the Act, to the extent of Rs. 22,50,000/-, as per the reasons stated , as per the reasons stated in the impugned order in the impugned order or otherwise.
At the outset, the learned counsel for the assessee submitted At the outset, the learned counsel for the assessee submitted At the outset, the learned counsel for the assessee submitted that the Registry has pointed out a delay of 306 days 306 days in filing the that the Registry has pointed out a delay of present appeal. It was submitted that the assessee has filed an present appeal. It was submitted that the assessee has filed an present appeal. It was submitted that the assessee has filed an affidavit seeking condonation of the said delay. The relevant affidavit seeking condonation of the said delay. The relevant affidavit seeking condonation of the said delay. The relevant averments made therein, in substance, are that the order of the averments made therein, in substance, are that the order of the averments made therein, in substance, are that the order of the learned Commissioner (Appeals) dated 04.06.2024 passed under learned Commissioner (Appeals) dated 04.06.2024 pass learned Commissioner (Appeals) dated 04.06.2024 pass section 250 of the Income section 250 of the Income-tax Act, 1961, could not be acted upon tax Act, 1961, could not be acted upon within the prescribed period as the assessee was suffering from within the prescribed period as the assessee was suffering from within the prescribed period as the assessee was suffering from serious medical ailments, including bronchial asthma, bone density serious medical ailments, including bronchial asthma, bone density serious medical ailments, including bronchial asthma, bone density issues and pneumonia, rendering her completely bedridden for a issues and pneumonia, rendering her completely bedr issues and pneumonia, rendering her completely bedr prolonged period from September 2023 to mid prolonged period from September 2023 to mid-2025. It is further 2025. It is further stated that due to such illness, the assessee was physically and stated that due to such illness, the assessee was physically and stated that due to such illness, the assessee was physically and mentally incapacitated from attending to her legal affairs and, mentally incapacitated from attending to her legal affairs and, mentally incapacitated from attending to her legal affairs and, consequently, could not forward the appellate order to her consequently, could not forward the appellate order consequently, could not forward the appellate order Chartered Accountant. Upon recovery and during the course of Chartered Accountant. Upon recovery and during the course of Chartered Accountant. Upon recovery and during the course of preparation of submissions in penalty proceedings in June 2025, preparation of submissions in penalty proceedings in June 2025, preparation of submissions in penalty proceedings in June 2025, the omission came to light, following which the appeal was filed the omission came to light, following which the appeal was filed the omission came to light, following which the appeal was filed without any further delay. It is asserted that the delay was neither without any further delay. It is asserted that the delay w without any further delay. It is asserted that the delay w deliberate nor attributable to negligence, but occasioned solely due deliberate nor attributable to negligence, but occasioned solely due deliberate nor attributable to negligence, but occasioned solely due to unavoidable medical circumstances. Medical documents in to unavoidable medical circumstances. Medical documents in to unavoidable medical circumstances. Medical documents in support of the said plea have been placed on record. support of the said plea have been placed on record.
Addressing to the affidavit, Addressing to the affidavit, the learned counsel submitted that the learned counsel submitted that the delay occurred due to bona fide and unavoidable reasons and the delay occurred due to bona fide and unavoidable reasons and the delay occurred due to bona fide and unavoidable reasons and that the assessee was prevented by sufficient cause from filing the that the assessee was prevented by sufficient cause from filing the that the assessee was prevented by sufficient cause from filing the appeal within the period of limitation. It was, therefore, prayed that appeal within the period of limitation. It was, therefore, prayed that appeal within the period of limitation. It was, therefore, prayed that the delay be condoned in the interest of substantial justice. ned in the interest of substantial justice. ned in the interest of substantial justice.
Per contra, the learned Departmental Representative opposed Per contra, the learned Departmental Representative opposed Per contra, the learned Departmental Representative opposed the prayer for condonation of delay. the prayer for condonation of delay.
We have carefully considered the rival submissions and We have carefully considered the rival submissions and We have carefully considered the rival submissions and perused the material placed on record. Under the provisions of the perused the material placed on record. Under the pro perused the material placed on record. Under the pro Act, an appeal before the Tribunal is required to be filed within sixty Act, an appeal before the Tribunal is required to be filed within sixty Act, an appeal before the Tribunal is required to be filed within sixty days from the date on which the order appealed against is days from the date on which the order appealed against is days from the date on which the order appealed against is communicated to the assessee. In the present case, there is no communicated to the assessee. In the present case, there is no communicated to the assessee. In the present case, there is no dispute that the appeal has been filed with a de dispute that the appeal has been filed with a delay of 306 days. The lay of 306 days. The assessee has explained the delay by placing reliance on her assessee has explained the delay by placing reliance on her assessee has explained the delay by placing reliance on her prolonged illness, supported by medical records. After examining prolonged illness, supported by medical records. After examining prolonged illness, supported by medical records. After examining the affidavit and the accompanying documentary evidence, we are the affidavit and the accompanying documentary evidence, we are the affidavit and the accompanying documentary evidence, we are satisfied that the assessee was prevented by s satisfied that the assessee was prevented by sufficient cause from ufficient cause from filing the appeal within the prescribed period. It is well settled that filing the appeal within the prescribed period. It is well settled that filing the appeal within the prescribed period. It is well settled that a liberal approach is required to be adopted while considering a liberal approach is required to be adopted while considering a liberal approach is required to be adopted while considering applications for condonation of delay, particularly where no mala applications for condonation of delay, particularly where no mala applications for condonation of delay, particularly where no mala fides or deliberate inaction is at fides or deliberate inaction is attributable to the litigant and tributable to the litigant and substantial justice is at stake. In the facts of the present case, the substantial justice is at stake. In the facts of the present case, the substantial justice is at stake. In the facts of the present case, the explanation explanation explanation furnished furnished furnished appears appears appears reasonable reasonable reasonable and and and credible. credible. credible.
Amarjit Kaur Ranjit Singh Anand Amarjit Kaur Ranjit Singh Anand Accordingly, we condone the delay of 306 days in filing the appeal Accordingly, we condone the delay of 306 days in filing the appeal Accordingly, we condone the delay of 306 days in filing the appeal and admit the appeal for adjudic and admit the appeal for adjudication on merits.
Briefly stated, the relevant facts are that the assessee Briefly stated, the relevant facts are that the assessee Briefly stated, the relevant facts are that the assessee purchased a residential flat situated at Flat No. 705, Supremus, purchased a residential flat situated at Flat No. 705, Supremus, purchased a residential flat situated at Flat No. 705, Supremus, Vihar, Powai, Mumbai, for a consideration of ₹1,75,00,000 1,75,00,000 from Vihar, Powai, Mumbai, for a consideration of M/s Shree Mahavir Metalcraft M/s Shree Mahavir Metalcraft Pvt. Ltd. The sale deed was registered Pvt. Ltd. The sale deed was registered on 27.03.2018. On the date of registration, the stamp duty on 27.03.2018. On the date of registration, the stamp duty on 27.03.2018. On the date of registration, the stamp duty authority valued the property at ₹2,36,86,732. The Assessing authority valued the property at . The Assessing Officer, therefore, proposed to treat the difference between the Officer, therefore, proposed to treat the difference between the Officer, therefore, proposed to treat the difference between the stamp duty value and the stated stamp duty value and the stated consideration as income under consideration as income under section 56(2)(x) of the Act. section 56(2)(x) of the Act.
6.1 The assessee contended before the Assessing Officer that the The assessee contended before the Assessing Officer that the The assessee contended before the Assessing Officer that the property was booked on 06.06.2017, pursuant to which an property was booked on 06.06.2017, pursuant to which an property was booked on 06.06.2017, pursuant to which an allotment letter was issued specifying the consideration at allotment letter was issued specifying the consideration at allotment letter was issued specifying the consideration at ₹1,75,00,000, and that the entire consideration was paid in July and that the entire consideration was paid in July and that the entire consideration was paid in July 2017. It was submitted that in terms of the first proviso to section 2017. It was submitted that in terms of the first proviso to section 2017. It was submitted that in terms of the first proviso to section 56(2)(x), the stamp duty value as on the date of agreement ought to 56(2)(x), the stamp duty value as on the date of agreement ought to 56(2)(x), the stamp duty value as on the date of agreement ought to be adopted. The assessee also furnished a valuation report from an be adopted. The assessee also furnished a valuation report from an be adopted. The assessee also furnished a valuation report from an approved valuer estimating the value of the property at pproved valuer estimating the value of the property at ₹1.84 crore pproved valuer estimating the value of the property at as on the date of agreement. as on the date of agreement.
6.2 The Assessing Officer, however, did not accept the explanation The Assessing Officer, however, did not accept the explanation The Assessing Officer, however, did not accept the explanation and made a reference to the District Valuation Officer (DVO) under and made a reference to the District Valuation Officer (DVO) under and made a reference to the District Valuation Officer (DVO) under the third proviso to secti the third proviso to section 56(2)(x). As the DVO’s report was not on 56(2)(x). As the DVO’s report was not Amarjit Kaur Ranjit Singh Anand Amarjit Kaur Ranjit Singh Anand Assessing received by the time the assessment was completed, the Assessing received by the time the assessment was completed, the Assessing Officer proceeded to make an addition of ₹61,86,732 Officer proceeded to make an addition of 61,86,732, being the difference between the stamp duty value on the date of registration difference between the stamp duty value on the date of registration difference between the stamp duty value on the date of registration and the sale consideration. eration.
6.3 During the first appellate proceedings, the DVO’s report was During the first appellate proceedings, the DVO’s report was During the first appellate proceedings, the DVO’s report was received, wherein the value of the property was determined at ₹1.97 received, wherein the value of the property was determined at received, wherein the value of the property was determined at crore. The learned Commissioner (Appeals) accordingly restricted . The learned Commissioner (Appeals) accordingly restricted . The learned Commissioner (Appeals) accordingly restricted the addition to ₹22 lakh 22 lakh, being the difference between the DVO’s tween the DVO’s valuation and the declared consideration. valuation and the declared consideration.
Before us, the learned counsel for the assessee contended that Before us, the learned counsel for the assessee contended that Before us, the learned counsel for the assessee contended that firstly, (i) the stamp duty value as on the date of the agreement firstly, (i) the stamp duty value as on the date of the agreement firstly, (i) the stamp duty value as on the date of the agreement ought to have been considered in view of the first proviso to section ought to have been considered in view of the first proviso to sect ought to have been considered in view of the first proviso to sect 56(2)(x) and if same is found to be within the tolerance limit of 10% and if same is found to be within the tolerance limit of 10% and if same is found to be within the tolerance limit of 10% provided under section 56(2)(x) section 56(2)(x) of the Act then no addition is of the Act then no addition is warranted.; and secondly, (ii) even otherwise, the DVO erred in ; and secondly, (ii) even otherwise, the DVO erred in ; and secondly, (ii) even otherwise, the DVO erred in valuing the property as on the date of registration instead of the valuing the property as on the date of registration ins valuing the property as on the date of registration ins date of agreement.
We find considerable merit in the submissions advanced on We find considerable merit in the submissions advanced on We find considerable merit in the submissions advanced on behalf of the assessee. The first proviso to section 56(2)(x) clearly behalf of the assessee. The first proviso to section 56(2)(x) clearly behalf of the assessee. The first proviso to section 56(2)(x) clearly provides that where the date of agreement fixing the consideration provides that where the date of agreement fixing the consideration provides that where the date of agreement fixing the consideration and the date of registratio and the date of registration are not the same, the stamp duty value n are not the same, the stamp duty value as on the date of agreement may be adopted, subject to fulfillment as on the date of agreement may be adopted, subject to fulfillment as on the date of agreement may be adopted, subject to fulfillment of the prescribed conditions. Further, the valuation by the DVO has of the prescribed conditions. Further, the valuation by the DVO has of the prescribed conditions. Further, the valuation by the DVO has Amarjit Kaur Ranjit Singh Anand Amarjit Kaur Ranjit Singh Anand admittedly not been carried out with reference to the date of admittedly not been carried out with reference to the date of admittedly not been carried out with reference to the date of agreement. For ready reference, t dy reference, the first proviso to sectio he first proviso to section 56(2)(x) of the Act is reproduced is reproduced as under:
(2) In particular, and without prejudice to the generality of the provisions of sub (2) In particular, and without prejudice to the generality of the provisions of sub (2) In particular, and without prejudice to the generality of the provisions of sub-section (1), the following incomes, shall be chargeable to income following incomes, shall be chargeable to income-tax under the head “Income from other tax under the head “Income from other sources”, namely :- (i) to (ix) …………… …….
48[(x) where any person receives, in any previous year, from any person or persons on or where any person receives, in any previous year, from any person or persons on or where any person receives, in any previous year, from any person or persons on or after the 1st day of April, 2017, after the 1st day of April, 2017,- (a) any sum of money, without consideration, the aggregate value of which exceeds fifty any sum of money, without consideration, the aggregate value of which exceeds fifty any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum; and rupees, the whole of the aggregate value of such sum; and rupees, the whole of the aggregate value of such sum; (b) any immovable property, any immovable property,- (A) without consideration, the stamp duty value of which exceeds fifty thousand rupees, without consideration, the stamp duty value of which exceeds fifty thousand rupees, without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; the stamp duty value of such property; 49[(B) for a consideration, the stamp duty value of such property as exceeds such for a consideration, the stamp duty value of such property as exceeds such for a consideration, the stamp duty value of such property as exceeds such consideration, if the amount of such excess is more than the higher of the following consideration, if the amount of such excess is more than the higher of the following consideration, if the amount of such excess is more than the higher of the following amounts, namely:- - (i) the amount of fifty thousand rupees; and the amount of fifty thousand rupees; and (ii) the amount equal to the amount equal to 50[ten] per cent of the conside-ration:] Provided that where the date of agreement fixing the amount of that where the date of agreement fixing the amount of that where the date of agreement fixing the amount of consideration for the transfer of immovable property and the date of consideration for the transfer of immovable property and the date of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of registration are not the same, the stamp duty value on the date of registration are not the same, the stamp duty value on the date of agreement may be taken for the purposes of this sub agreement may be taken for the purposes of this sub-clause : clause : Provided further that the provisions of the first proviso shall apply only in a that the provisions of the first proviso shall apply only in a case where the amount of consideration referred to therein, or a part case where the amount of consideration referred to therein, or a part case where the amount of consideration referred to therein, or a part thereof, has been paid by way of an account payee cheque or an account thereof, has been paid by way of an account payee cheque or an account thereof, has been paid by way of an account payee cheque or an account payee bank draft or by use of elect payee bank draft or by use of electronic clearing system through a bank ronic clearing system through a bank account 51[or through such other electronic mode as may be prescribed [or through such other electronic mode as may be prescribed [or through such other electronic mode as may be prescribed 52], on or before the date of agreement for transfer of such immovable property: on or before the date of agreement for transfer of such immovable property: on or before the date of agreement for transfer of such immovable property: Provided also that where the stamp duty value of immovable property is disputed that where the stamp duty value of immovable property is disputed that where the stamp duty value of immovable property is disputed by the assessee on grounds mentioned in sub by the assessee on grounds mentioned in sub-section (2) of section (2) of section 50C, the Assessing Officer may refer the valuation of such property to a Valuation Officer, and Assessing Officer may refer the valuation of such property to a Valuation Officer, and Assessing Officer may refer the valuation of such property to a Valuation Officer, and the provisions of section 50C section 50C and sub-section (15) of section 155 section 155 shall, as far as may be, apply in relation to the stamp duty value of such property for the purpose of this y in relation to the stamp duty value of such property for the purpose of this y in relation to the stamp duty value of such property for the purpose of this sub-clause as they apply for valuation of capital asset under those sections: clause as they apply for valuation of capital asset under those sections: clause as they apply for valuation of capital asset under those sections: 53[Provided also that in case of property being referred to in the second proviso to that in case of property being referred to in the second proviso to that in case of property being referred to in the second proviso to sub-section (1) of section 43CA section 43CA, the provisions of sub-item (ii) of item (B) shall have item (ii) of item (B) shall have effect as if for the words “ten per cent”, the words “twenty per effect as if for the words “ten per cent”, the words “twenty per effect as if for the words “ten per cent”, the words “twenty per cent” had been substituted;] (c) any property, other than immovable property, any property, other than immovable property,- (A) without consideration, the aggregate fair market value of which exceeds fifty without consideration, the aggregate fair market value of which exceeds fifty without consideration, the aggregate fair market value of which exceeds fifty thousand rupees, the whole of the aggregate fair market value of such property; thousand rupees, the whole of the aggregate fair market value of such property; thousand rupees, the whole of the aggregate fair market value of such property; (B) for a consideration which is less than the aggregate fair market value of the property for a consideration which is less than the aggregate fair market value of the property for a consideration which is less than the aggregate fair market value of the property by an amount exceeding fifty thousand rupees, the aggregate fair market value of by an amount exceeding fifty thousand rupees, the aggregate fair market value of by an amount exceeding fifty thousand rupees, the aggregate fair market value of Amarjit Kaur Ranjit Singh Anand Amarjit Kaur Ranjit Singh Anand 8.1 In these circumstances, we deem it appropriate to set aside circumstances, we deem it appropriate to set aside circumstances, we deem it appropriate to set aside the order of the learned Commissioner (Appeals) and restore the the order of the learned Commissioner (Appeals) and restore the the order of the learned Commissioner (Appeals) and restore the matter to the file of the Assessing Officer with the following matter to the file of the Assessing Officer with the following matter to the file of the Assessing Officer with the following directions:
(i) The assessee shall furnish documentary evidence to establish the (i) The assessee shall furnish documentary evidence to establish t (i) The assessee shall furnish documentary evidence to establish t stamp duty value as on the date of agreement or the date of stamp duty value as on the date of agreement or the date of stamp duty value as on the date of agreement or the date of payment and demonstrate that the consideration paid falls within payment and demonstrate that the consideration paid falls within payment and demonstrate that the consideration paid falls within the tolerance limit prescribed under the Act. Then, the Assessing the tolerance limit prescribed under the Act. Then, the Assessing the tolerance limit prescribed under the Act. Then, the Assessing officer after considering submission of assessee, decide the issue in officer after considering submission of assessee, decide the i officer after considering submission of assessee, decide the i accordance with law, and accordance with law, and (ii) If the stamp duty value as on the relevant date exceeds the (ii) If the stamp duty value as on the relevant date exceeds the (ii) If the stamp duty value as on the relevant date exceeds the permissible tolerance limit, and the claim of assessee is not permissible tolerance limit, and the claim of assessee is not permissible tolerance limit, and the claim of assessee is not accepted, the Assessing Officer shall refer the matter to the DVO for accepted, the Assessing Officer shall refer the matter to the DVO for accepted, the Assessing Officer shall refer the matter to the DVO for determination of the fair determination of the fair market value as on the date of market value as on the date of agreement/payment and make addition, if any, strictly in agreement/payment and make addition, if any, strictly in agreement/payment and make addition, if any, strictly in accordance with law. accordance with law.
8.2 With the above directions, the matter is restored to the file of With the above directions, the matter is restored to the file of With the above directions, the matter is restored to the file of the Assessing Officer for fresh adjudication. The grounds raised by the Assessing Officer for fresh adjudication. The grounds raised by the Assessing Officer for fresh adjudication. The grounds raised by see are allowed for statistical purposes. the assessee are allowed for Amarjit Kaur Ranjit Singh Anand Amarjit Kaur Ranjit Singh Anand
In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on ounced in the open Court on 24/12/2025. /12/2025.