BINOD KUMAR SINGH,BHAGALPUR vs. ITO, BHAGALPUR

PDF · subscribers
ITA 1/PAT/2025Status: DisposedITAT Patna03 August 2026AY 2015-167 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that Section 56(2)(vii) was not in force at the time of the agreement and that the stamp duty value on the date of the agreement should be considered, especially since the advance was paid via cheque. The addition made by the AO was deemed incorrect.

What were the facts?

The assessee purchased a flat through an agreement dated May 16, 2010, and paid an advance of Rs. 11,000/- by cheque. The property was registered later, and the Assessing Officer made an addition under Section 56(2)(vii) based on the stamp duty value at the time of registration.

What were the issues?

Whether the stamp duty value on the date of agreement or the date of registration should be considered for the purpose of Section 56(2)(vii), and whether the said section was applicable retrospectively.

Which sections of the Income-tax Act were involved?

Section 56(2)(vii),Section 147,Section 144,Section 144B,Section 139

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “DB” BENCH, PATNA

Before: SHRI LAXMI PRASAD SAHU, AM SHRI YOGESH KUMAR U S, JM

For Appellant: Shri D.V. Pathy, AR
For Respondent: Shri Ravi Kant Chowdhary, DR
Hearing: 30.06.2026Pronounced: 03.08.2026

Per Laxmi Prasad Sahu, AM:

This appeal is filed by the assessee against the orders passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by the NFAC, Delhi [hereinafter referred to as “the Ld. CIT(A)] dated 29.10.2024, ITBA/NFAC/S/250/2024-25/1070005832(1). The assessee has raised following grounds of appeal:

ITA No. 1/PAT/2025 Binod Kumar Singh; A.Y. 2015-16 “1. We have paid Rs.11,000/- by cheque on 16.05.2010 to Anaika Vihar Building Construction and Developer Pvt. Ltd for the purchase of Flat. 2. That the agreement has also been executed. The copy same is enclosed 3. That the learned ACIT has taken the stamp value as on the date of registration. Actually the stamp value should be taken as on 'the date of agreement ie 16.05.2010 4. The copy of money receipts are attached 5. That stamp value is much less that the date of Registration. 6. As per sec 56 (2)(vii)(b)(vi) clearly says that when the date of agreement differs the date of registration then the date of agreement of stamp value is to be taken. In this connection I would like to draw your kind attention toward sec56(2)(vii) (b)(vi) which enumerates as under. For the consideration which is less than the stamp duty value of such property by an amount exceeding fifty thousand rupees, the stamp duty of such property as exceeds such consideration. Provided that where the date of the agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty on the date of agreement may be taken for the purpose of this sub- clause. Provided further that the said proviso shall apply only in case where the amount of consideration referred to therein, or a part thereof, has paid by any mode other then Case on or before the date of agreement for the transfer of such immovable property. 7. date of registration are not the same, the stamp duty on the date of agreement may be taken for the purpose of this sub- clause. Provided further that the said proviso shall apply only in case where the amount of consideration referred to therein, or a part thereof, has paid by any mode other then Case on or before the date of agreement for the transfer of such immovable property. That the learned ACIT has erred by taking valuation as on date of registration when is completely wrong and is not as per Act. It should be taken on the date of agreement.

ITA No. 1/PAT/2025 Binod Kumar Singh; A.Y. 2015-16 8. Hence all the addition are required to be deleted 9. That other ground of Appeal will be made at the time of hearing.” 2. At the outset of hearing, we noticed that the appeal filed by the assessee is delayed by 2 days. Before the co-ordinate bench Patna, the appeal was filed on 2nd Jan 2025. On perusal of the form no.36, it is noticed that the assessee has paid challan for filing fee on 11th December, 2024, which clearly states that there was an intention to file appeal within the due date and the delay for two days is hereby condoned and taking-up for adjudication.

3.

Briefly stated facts are that the assessee filed return of income u/s 139 of the Act on 21st October, 2015, declaring an income of ₹23,48,400/- along with audit report in form no.3CB. Later on, as per information with the income tax department it was noticed that there are certain transactions carried out by the assessee which is escaped income within the purview of the Income Tax Act and accordingly, the notice u/s 148 of the Act dated 31st March, 2021, was issued to the assessee. The other statutory notice u/s 148 of the Act was issued and it was asking to assessee the difference of ₹14,79,000/- being the difference between the purchase value of the flat being flat no.B-101, Angika Bihar Apptt., Rani Talab, Sabour, Bhagalpur-812001, as registration dated 11.11.2021, the stamp duty value of the property of ₹26,40,000/- should not be brought to tax by looking the provisions of Section 56(2) of the Act and further notice was issued to the assessee but there was no response from the assessee’s side. Accordingly, the assessment was completed u/s 147 read with section 144 read with section 144B of the Act. making the addition u/s 56(2)(vii) of the Act as per para no.2.7 of the assessment order of ₹14,70,000/- and total income was assessed at ₹38,27,398/-.

4.

Aggrieved from the above order, the assessee filed before the ld. CIT (A). During the course of first appellate proceedings, the assessee filed detail submissions and remand report was also called from the ld. AO. The ld. AO Page | 3

ITA No. 1/PAT/2025 Binod Kumar Singh; A.Y. 2015-16 submitted the remand report. The ld. CIT (A) after considering the remand report confirmed the addition made by the ld. AO and dismissed the appeal of the assessee.

5.

Aggrieved from the above order, the assessee filed an appeal before ITAT.

6.

The ld. Counsel for the assessee reiterated the submissions made before the ld. CIT (A) and submitted that the provisions of section 56(2)(vii)(b) of the Act, is not applicable in the present facts of the assessee since, the agreement for the purchase of the said property was made on 16th May, 2010 and on the date of agreement the assessee had paid ₹11,000/- by cheque no. 185959/- in favour of the Angika Vihar building construction and developers Private Limited, which was cleared from the bank on 4th Jan 2010 on Central bank of India for the purchase of flat no. B101. He also submitted that the relevant provision was not in force and agreement was made earlier, the letter date the property got registered after the introduction of section well not applicable to the assessee and the details of the payment to M/s Angika Vihar Building Construction & Developers (P). Ltd. is also clear from the agreement and the value of flat is ₹11,61,600/-. In support of arguments the ld. Counsel for the assessee relied on the judgement of the co-ordinate bench in ITA No. 188/RAN/2019, filed for A.Y. 2014-15, vide order dated 30.04.2021, in case of Shri Ashutosh Jha (HUF) Vs. ITO word 2(5), Ranchi. Similarly, relied on the decision of the co-ordinate bench of the Tribunal in ITA no. 3437/CHNY/2018 vide order dated 22.06.2022 in case of Smt. Selvi Chittiraja Vs. ITO.

7.

On the other hand, the ld. DR relied on the order of the ld. lower authorities.

8.

Considering the rival submissions and perusing the entire materials available on record and order of lower authorities below, we noted that here the dispute is the difference between the stamp value adopted by the registering authority

ITA No. 1/PAT/2025 Binod Kumar Singh; A.Y. 2015-16 and the agreement value. Accordingly, the case of the assessee was reopened and the ld. AO made addition u/s 56(2)(vii)(b)(ii) of the Act of ₹14,79,000/-. There is no dispute that the assessee made an agreement with the developer on 16th May, 2010 and paid through cheque no. 185959 by ₹11,000/-, which was encashed from the Central Bank of India on 4th June, 2010. On going through the agreement, it is seen that the agreed value of the property amount to ₹11,61,600/- and the assessee has also produced receipt of the advance payments and bank statements, memorandum leaf of cheque. The judgement relied by the ld. Counsel of the Chennai co-ordinate bench is applicable in this case . The relevant part is as under:-

7.

The next issue that came up for our consideration is additions of Rs.28,40,000/- made u/s.56(2)(vii) of the Income Tax Act, 1961. The facts with regard to impugned dispute are that the assessee has purchased property by entering into sale agreement on 25.07.2012 and paid advance amounting to Rs.7,50,000/- by cheque bearing no.874436 dated 25.07.2012 drawn on Indian Bank in favour of seller. The property has been registered in favour of the assessee on 02.04.2013. At the time of registration of sale deed, guideline value of the property was more than amount of consideration paid by the assessee for purchase of property. The Assessing Officer has invoked provisions of section 56(2)(vii) of the Act and made additions of Rs.28,40,000/- by considering guideline value of the property as on date of registration of sale deed on 02.04.2013. It was explanation of the assessee that as per first and second proviso of section 50C of the Act, where date of agreement fixing amount of consideration and date of registration for transfer of capital asset are not the same, value adopted or assessable by Stamp Valuation Authority on the date of agreement may be taken for the purpose of computing full value of consideration for such transfer, if amount of consideration or part thereof has been received by way of account payee cheque or bank draft or by use of electronic clearance system through a bank account. In this case, there is no dispute with regard to fact that the assessee had paid consideration through proper banking channel and further, guideline value of the property as on date of agreement itself is less than amount of consideration paid for purchase of property. If guideline value of the property as on date of agreement of sale is considered, then there is no difference between consideration paid by the assessee for purpose of purchase of property and value assessed by stamp duty valuation authority and thus, provisions of section 56(2)(vii) of the Act, cannot be invoked. Since, the assessee has satisfied conditions prescribed therein under 1st and 2nd proviso to section 50C of the Income Tax Act, 1961, the Page | 5

ITA No. 1/PAT/2025 Binod Kumar Singh; A.Y. 2015-16 Assessing Officer has erred in invoking provisions of section 56(2)(vii) of the Act, and made additions towards difference between guideline value of the property and sale consideration. Hence, we direct the Assessing Officer to delete additions made towards difference in value of the property u/s. 56(2)(vii) of the Income Tax Act, 1961 9. There is no dispute that the agreement was made on 16th May, 2010. Accordingly, the provisions of Section 56(2)(vii)(b) of the Act was not in force and it was came into effect from 01.04.2014. This provision will not apply retrospectively if the agreement was made prior to the introduction of section. Accordingly, the addition made by the ld. AO is incorrect, the registering authority had valued at ₹26,40,000/- for levy of stamp duty which is not fit to the case of the assessee for reassessment u/s 147 of the Act. The assessee also satisfy the condition of proviso of the relevant section. The case law relied on by the ld. Counsel for the assessee noted supra is squarely applicable in the present facts of the case. Accordingly, we allow the appeal of the assessee.

10.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 03.08.2026.

Sd/- Sd/- YOGESH KUMAR U.S. (LAXMI PRASAD SAHU) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 03.08.2026 Sudip Sarkar, Sr.PS

ITA No. 1/PAT/2025 Binod Kumar Singh; A.Y. 2015-16

Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy//

Asst. Registrar Income Tax Appellate Tribunal, Patna

More judgments on Section 56(2)(vii)

All 365 judgments and leading authorities on Section 56(2)(vii) →

Recent GST High Court judgments

Search GST case law →