SURENDRA NATH MOHANTY,GURGAON vs. NWC CIRCLE 3(1), GURGAON

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, A : NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SMT. RENU JAUHRI, ACCOUNTANT MEMBER ITA No.1887/Del/2026 Assessment Year : 2018-19 Vs Surendra Nath Mohanty NWC I-302, Maple Cresent, Circle – 3(1) Block – C, Ward No. 3(1), Ph-1, Sushant Lok-1, Gurgaon – 122 009 Gurgaon – 122 009 PAN: AFCPM 8881 Q (Appellant) (Respondent) Assessee by : None Revenue by : Shri Manoj Kumar, Sr. DR Date of Hearing : 20.07.2026 Date of Pronouncement : 24.07.2026 ORDER PER RENU JAUHRI, ACCOUNTANT MEMBER This appeal by the assessee is directed against the order dated 29.12.2025 of the National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as the ‘Ld. CIT(A)’] arising out of the Assessment Order dated 30.03.2023 passed under section 147 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the Assessment Unit, Income Tax Department, (hereinafter referred to as the ‘AO’) pertaining to Assessment Year (A.Y.) 2018-19.

“1. The assessee submits that the learned assessing authority and the Honourable Commissioner of Income tax (Appeals) have passed the impugned order against all the facts and circumstances of the case. 2. The assessee submits that the neither the learned assessing authority and the Appellate Authority has given due weightage to the submissions made in this regard and has drawn conclusions on suspicions and surmises which is not correct in law. 3. The learned assessing authority has not given proper reasons for rejecting the entitlement of the claim of entitlement of the proviso to Section 56 (2) (x) therein. 4. The assessee had produced all the documentary evidences relating to the transaction such as agreements, evidences of bank payments, handing over the property earlier itself in pursuance of this agreement etc which clearly prove that the assessee is right in claiming the option available to him in the proviso to Section 56 (2) (x). 5. The assessee submits that the assessee has claimed the option to use the value related to 2014 itself instead of 2017, as permitted by the provisions of the related section in this regard. 6. The assessee submits that the Honourable Commissioner of Income tax (Appeals) has based his order on the preposition that the related agreement is not registered and hence cannot be considered to entail the assessee to avail the option referred in the proviso to Section 56(2) (x) of the Act. 7. The assessee respectfully submits that the assessee is entitled to exercise the option available to him if a) There is an agreement entered earlier than the date of registration of the sale deed AND b) The payments in pursuance of the said agreement are made by banking channels before the date of registration of the sale deed. 8. The assessee submits that he has given sufficient evidence relating to the above requirements by showing that there was an agreement relating to the transaction as early as 2014 itself and he has also started paying the consideration in regard to the said transaction from 2008 itself as evidenced by the schedule of payments placed before the learned assessing authority and the Appellate Authority as well. 9. The assessee respectfully submits that the contention of the Appellate authority that the agreement should have been registered is not correct, as the reading of the proviso does not place such a restriction and requires only the issues referred in para 7 above, to entitle the assessee to use the option available in the provision to Section 56 (2) (x) of the Act.

4.1 Since the possession was taken over by the assessee in 2014 itself, the assessee claimed that proviso to Section 56(2)(x) allows for adoption of the value as on the date of agreement to purchase the property i.e. in 2008. Rejecting the assessee’s contention, the AO made an addition of Rs.8,60,540/- under section 56(2)(x) of the Act.

4.2 Aggrieved, the assessee preferred an appeal before the CIT(A). The assessee’s contentions were rejected by the CIT(A) with the following observations :- “5.4. Upon detailed examination of the facts, it is observed that while the appellant claims that payments started in 2008, the actual "Deed of Absolute Sale" was executed and registered only on 27/09/2017. The "allotment" mentioned by the appellant as occurring in 2008 was a mere registration for a scheme, and the tentative cost was settled much later. 5.5. The appellant contends that the "agreement" for the purpose of the proviso should be the date of initial allotment or the date of payment of installments. However, for the application of the proviso to Section 56(2)(x), there must be a legally binding agreement that fixes the consideration. In the case of AFNHB, the costs are often "tentative" and subject to revision until the final costing is completed and the sale deed is executed. The Sale Deed itself states: "mutually agreed tentative cost of the dwelling unit for the allotment of Rs. 42,70,705... however, in case final cost worked out by final costing committee at later stage is found more such additional amount will be payable". This indicates that the consideration was not final or fixed in 2008 or 2014. 5.6. Furthermore, the appellant's attempt to provide a self-calculated valuation based on 2008 guideline values (Rs. 296 per sq. ft.) and 2014 PWD rates is not acceptable. The statute is clear the reference point for Section 56(2)(x) is the "Stamp Duty Value" (Guideline Value) as determined by the state authorities. An assessee cannot substitute the official Guideline Value with their own calculations or PWD rates unless they follow the procedure of referring the matter to a Valuation Officer 4 under Section 50C(2), which was not pursued here in the requisite manner during assessment. 5.7. The law explicitly uses the Stamp Duty Value at the time of registration unless a specific, fixed agreement exists prior to that date. Since the registration happened in September 2017 (A.Y. 2018-19), the prevailing Stamp Duty Value of Rs. 51,31,245 is the correct legal benchmark. The difference of Rs. 8,60,540 clearly exceeds the statutory threshold and is squarely covered under the charging provisions of Section 56(2)(x).” 5. We have heard the learned DR and perused the material on record. We note that the assessee has purchased the impugned property from the AFNHB. Admittedly, the property was allotted to the assessee in April, 2008 for total purchase consideration of Rs.42,70,705/- which was paid through Banking channels in instalments during 2008-2014. Thereafter, the allotment and possession certificate was issued to him in October, 2014 and the assessee had taken over possession of the property in 2014 itself. Accordingly, the assessee has claimed that benefit of 1st and 2nd proviso to section 56(2)(x) is admissible to him. In this regard, the relevant provision of section 56(2)(x) read as under:

56(2)(x) where any person receives, in any previous year, from any person or persons on or after the 1st day of April, 2017,— (a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum; (b) any immovable property,— (A) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; (B) 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 amounts, namely:— (i) the amount of fifty thousand rupees; and (ii) the amount equal to ten per cent of the consideration: Provided that where the date of agreement fixing the amount 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 agreement may be taken for the purposes of this sub-clause : Provided further that the provisions of the first proviso shall apply only in a 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 payee bank draft or by use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed, 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 by the assessee on grounds mentioned in sub-section (2) of section 50C, the Assessing Officer may refer the valuation of such property to a Valuation Officer, and the provisions of section 50C and sub-section (15) of section 155 shall, as far as may be, apply 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: Provided also that in case of property being referred to in the second proviso to sub-section (1) of section 43CA, the provisions of sub-item (ii) of item (B) shall have effect as if for the words "ten per cent", the words "twenty per cent" had been substituted; In view of above, it is clear that the date of agreement can be adopted for the purpose of this section provided the amount of consideration is paid in full or part via banking channels on or before the date of agreement.

5.1 We further note that in several decisions of the co-ordinate benches, it has been held that the SDV in the year of allotment should be considered provided full or part payment had been made on or before the date of such agreement. Specifically, in Sulochana Saijan Modi vs. ITO [2023] 152 taxmann.com 56 (Mum-Trib.), it has been held by the Co-ordinate Bench that the allotment letter can be considered as an agreement for sale for the purposes of section 56(2)(x) of the Act.

5.3 Admittedly, in this case, the property was allotted to the assessee in 2008 by the NFNHB and the assessee has paid the consideration through banking channel in installment paid during 2008 to 2014.

5.4 In view of these facts, we are of the considered view that the assessee is entitled to claim the benefit of the proviso to Section 56(2)(x) of the Act and the SDV on the date of allotment in 2008 has to be adopted instead of the SDV on date of registration in 2017.

5.5 We therefore, hold that the AO was not justified in adopting the SDV as on the date of registration in 2017 and direct him to consider the date of allotment in 2008 as the date of agreement in terms of proviso to section 56(2)(x), and adopt the SDV as on that date.