BASANTI JAIN,CHENNAI vs. THE DEPUTY COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 7(1), CHENNAI, CHENNAI

The brief facts of the case are that the assessee is an individual who, during the relevant previous year corresponding to Assessment Year 2019-20, was employed with M/s.Parmar Shelters and Infra Projects Private Limited and derived income by way of salary. Apart from the salary income, the assessee was also engaged in money-lending transactions amongst her close family members and friends.

During the previous year relevant to the assessment year under consideration, the assessee, jointly with her spouse, Shri Bhawarlal Jain, purchased an immovable property situated at Mumbai. The stated consideration for acquisition of the said property was Rs.1,50,00,000/-.

Subsequently, the AO noticed that, as against the purchase consideration of Rs.1,50,00,000/- disclosed in the registered instrument, the value adopted by the Stamp Valuation Authority for the purpose of levy of stamp duty was Rs.1,95,25,741/-. Thus, there was a difference of Rs.45,25,741/- between the stated purchase consideration and the stamp duty value of the property. On the basis of the aforesaid information, proceedings for reassessment were initiated u/s.147 of the Act.

Consequently, notice u/s.148 of the Act was issued and served upon the assessee on 30.03.2023, requiring her to furnish the return of income within a period of 30 days from the date of service thereof. In response to the said notice, the assessee filed her return of income on 12.04.2023 declaring a total income of Rs.21,87,350/-.

Thereafter, the reassessment proceedings were taken up by the Faceless Assessment Unit. During the course of the proceedings, notices u/s.143(2) and 142(1) of the Act dated 21.07.2023 and 27.07.2023, respectively, were issued calling upon the assessee to furnish the requisite details and information. Though there was no response to the aforesaid notices,

Upon consideration of the material furnished by the assessee, the Assessment Unit issued a Final Show Cause Notice dated 20.12.2023 proposing an addition of Rs.45,25,741/-, representing the difference between the stated purchase consideration of Rs.1,50,00,000/- and the stamp duty value of Rs.1,95,25,741/-. The assessee was called upon to explain as to why the aforesaid difference should not be brought to tax u/s.56(2)(x) of the Act under the head “Income from Other Sources”.

According to the AO, no response was furnished by the assessee to the Final Show Cause Notice. The AO, therefore, proceeded to make an addition of Rs.45,25,741/- u/s.56(2)(x) of the Act, being the difference between the consideration stated in the registered document and the value adopted by the Stamp Valuation Authority.

Accordingly, the AO determined the total income of the assessee at Rs.67,13,091/-, as against the returned income of Rs.21,87,350/-, by making an addition of Rs.45,25,741/- u/s.56(2)(x) of the Act. The reassessment was thus completed vide order dated 06.02.2024 passed u/s.147 of the Act, determining the total income at Rs.67,13,091/-.

Aggrieved by the above order, the assessee preferred an appeal before the Ld.CIT(A), who dismissed the appeal of the assessee vide the impugned appellate order dated 29.01.2026.

During the course of appellate proceedings before the ld.CIT(A), the assessee filed detailed written submissions along with documentary evidence in support of her claim. The assessee contended that the flat in question had been reserved/allotted by the developer, M/s.Shree Shukarta Developers Pvt. Ltd., vide reservation/allotment letter dated 04.05.2013 and that the total sale

It was further contended by the assessee that part of the consideration had been paid by way of account payee cheque on 30.10.2015, i.e., much prior to the date of registration of the property on 28.12.2018. Therefore, according to the assessee, the stamp duty value prevailing on the date of registration could not be mechanically adopted for the purpose of computing income u/s.56(2)(x) of the Act. On the strength of the allotment letter and the payment made through banking channels prior to the date of registration, the assessee contended that the provisions of section 56(2)(x) of the Act were not attracted in the manner invoked by the AO and, consequently, the addition of Rs.45,25,741/- was liable to be deleted.

The ld.CIT(A), however, was not persuaded by the submissions of the assessee. The ld.CIT(A) observed that, irrespective of the consideration agreed upon between the parties, stamp duty is payable on the value determined by the Stamp Valuation Authority as prevailing on the date of registration. The ld.CIT(A) further observed that, in transactions of this nature, the purchase consideration is generally shown at a value lower than the stamp duty value and that a part of the consideration may be paid in cash to the seller out of the undisclosed income of the purchaser.

Proceeding on the aforesaid reasoning, the ld.CIT(A) held that the provisions of section 56(2)(x) of the Act were required to be invoked and that the difference of Rs.45,25,741/- between the stamp duty value of

Accordingly, the ld.CIT(A) rejected the contentions advanced by the assessee and declined to interfere with the findings of the AO. Consequently, the appeal filed by the assessee was dismissed vide order passed u/s.250 of the Act dated 29.01.2026.

Aggrieved by the above order passed by the Ld.CIT(A), the assessee is in appeal before this Tribunal.

We have heard the rival submissions and perused the material available on record. The dispute before us relates to the addition of Rs.45,25,741/- made by the AO u/s.56(2)(x) of the Act, representing the difference between the consideration of Rs.1,50,00,000/- stated in the registered conveyance deed and the stamp duty value of Rs.1,95,25,741/- adopted by the Stamp Valuation Authority in respect of the immovable property jointly purchased by the assessee and her spouse.

During the course of hearing before us, the ld. AR for the assessee has filed a petition praying for admission of additional evidence. It is the submission of the ld. AR that the additional evidence sought to be placed on record has a direct and material bearing on the issue involved in the present appeal and goes to the very root of the addition made u/s.56(2)(x) of the Act. The ld. AR submitted that the property in question had been reserved/allotted by the developer, M/s Shree Shukarta Developers Pvt. Ltd., as early as on 04.05.2013 for an agreed consideration of Rs.1,50,00,000/- and that part of the consideration had also been paid through banking channels much prior to the date of registration of the property on 28.12.2018.

It is further submitted that the additional evidence is necessary to establish the date on which the consideration for purchase of the property was agreed upon between the parties as well as the factum of payment of part of the consideration otherwise than by cash prior to the date of registration. According to the ld.AR, these documents have a material bearing on the applicability of the provisos to section 56(2)(x) of the Act and, consequently, on the determination of the stamp duty value required to be adopted for the purpose of the said provision.

We have considered the petition for admission of additional evidence and the submissions of the ld.AR. Having regard to the nature of the controversy and the documents sought to be placed on record, we are of the considered view that the additional evidence is relevant for proper adjudication of the issue and ought to be examined before determining the applicability of section 56(2)(x) of the Act. Since the said evidence requires factual verification and the AO has not had an opportunity to examine the same, we deem it appropriate, in the interest of substantial justice, to admit the additional evidence and restore the issue to the file of the AO for fresh examination.

We also find that the assessee has specifically contended that the date of agreement/allotment fixing the consideration for transfer of the immovable property is different from the date of registration and that part of the consideration had been paid by account payee cheque/banking channels prior to the date of registration. These aspects assume significance for determining the value to be adopted for the purposes of section 56(2)(x) of the Act and, therefore, require verification with reference to the contemporaneous documentary evidence.

Accordingly, without expressing any opinion on the merits of the addition, we set aside the findings of the ld.CIT(A) on this issue and restore the matter to the file of the Jurisdictional Assessing Officer (JAO) with a direction to examine

While carrying out the aforesaid exercise, the JAO shall specifically examine the assessee's claim regarding applicability of the provisos to section 56(2)(x) of the Act concerning cases where the date of agreement fixing the amount of consideration and the date of registration are not the same and where the prescribed mode of payment has been made on or before the date of such agreement. The JAO shall thereafter adopt the appropriate stamp duty value, if any, in accordance with the statutory provisions after due verification of the facts.

Needless to state, the JAO shall afford reasonable and effective opportunity of being heard to the assessee and shall permit the assessee to furnish such further evidence and explanations as may be necessary in support of her claim. The JAO shall decide the issue afresh on the basis of the material available on record and in accordance with law, uninfluenced by the observations made by the ld.CIT(A), particularly the general observations regarding possible payment of consideration in cash, unless there is material on record specifically supporting such an inference in the case of the assessee.

In view of the above, the impugned order of the ld.CIT(A) on this issue is set aside and the issue relating to the addition of Rs.45,25,741/- u/s.56(2)(x) of the Act is restored to the file of the JAO for fresh adjudication in terms indicated hereinabove. Accordingly, the relevant grounds raised by the assessee are treated as allowed for statistical purposes.

In the result, the appeal of the assessee is allowed for statistical purposes.