ANIL KUMAR PAIK,KOLKATA vs. ACIT, CIRCLE 7(1),, KOLKATA

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ITA 1178/KOL/2026Status: DisposedITAT Kolkata16 July 2026AY 2016-201717 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition made under Section 43CA was not sustainable as the difference between the declared value and the DVO's valuation was less than 10%. This was based on the principle that the 10% tolerance band, considered curative and retrospective, applies to Section 43CA similar to Section 50C.

What were the facts?

The assessee, engaged in property development, had additions made under Section 43CA based on a DVO's valuation of properties. The difference between the declared sale value and the DVO's fair value was ₹8,99,780.

What were the issues?

Whether the addition made under Section 43CA is sustainable when the difference between the declared sale consideration and the DVO's valuation is within the 10% tolerance band, and if the 10% tolerance band is applicable retrospectively.

Which sections of the Income-tax Act were involved?

Section 43CA,Section 50C,Section 56(2)(x)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

For Appellant: Shri Somnath Ghosh, AR
For Respondent: Shri Sallong Yaden, DR
Hearing: 08.07.2026Pronounced: 16.07.2026

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 08.01.2026 for the AY 2016-17.

2.

The only issue raised by the assessee during the course of hearing is against the order of ld. CIT (A) confirming the addition of ₹8,99,780/-, which were made by the ld. AO u/s 43CA of the Act.

Sl Name of the Deed No. Flat Declared Fair Value Difference No. purchaser No. value adopted by DVO 1. Priyabrata I-1160704436/-2015 3E 31,00,000 32,66,300 1,66,300 Chatterjee dated 09.06.2015 (AFCPC8685G) 2. Shibnath Das I-01915/2015 dated 1D 32,32,800 35,55,700 3,22,900 (ALXPD4194Q) 03.03.2015 3. Shri Paras & I-160701679/20 16 2D 45,00,000 49,10,580 4,10,580 Madan Kenith dated 22.02.2016 Total variation proposed by DVO 8,99,780

4.

The ld. AO accordingly made the addition which were confirmed by the ld. CIT (A) in the appellate proceedings.

5.

After hearing the rival contentions and perusing the materials available on record, we find that in this case the addition has been made u/s 43CA of the Act of ₹8,99,780/- being

“6. We have heard the rival contentions and perused the material available on record. It is noted that the amendment to section 56(2)(x) of the Act brought in by Finance Act, 2020 of increasing tolerance limit from 5% to 10% is w.e.f. 01.04.2021.The point for consideration before us in the present appeal is, if this increase in tolerance limit is to be treated as clarificatory/curative in nature having retrospective application or otherwise. Admittedly, quantification of the difference between the valuation for stamp duty and the actual consideration is undisputed. 6.1. Before delving on the issue in hand, the relevant provisions of section 56(2)(x) of the Act are extracted below: “Income from other sources. 56(1)……. (2) In particular, and without prejudice to the generality of the provisions of sub-section (1), the following incomes, shall be chargeable to income-tax under any of the head “Income from other sources”, namely- (i) ……. (ii) …… ……….. (x) where any person receives, in any previous year, from any person or persons on or after the 1s t day of April, 2017,-

“9. We heard the parties and perused the material on record. The AO has received the information from Stamp duty authorities that during the year under consideration, the assessee has sold two properties for a consideration less than the stamp duty valuation. The AO called on the assessee to show cause as to why the provisions of section 43CA cannot be applied to make the addition towards the difference between the stamp duty value and sale consideration. Therefore before proceeding further we will look at the provisions of section 43CA which read as under - 43CA. - Special provision for full value of consideration for transfer of assets other than capital assets in certain cases. (1) Where the consideration received or accruing as a result of the transfer by an assessee of an asset (other than a capital asset), being

8.

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

Order pronounced on 16.07.2026.

Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 16.07.2026 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT DR, ITAT, 4. 5. Guard file. BY ORDER, True Copy//

Asst. Registrar Income Tax Appellate Tribunal, Kolkata

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