KRUTI RAJUBHAI MANVAR,MORBI vs. INCOME TAX OFFICER WARD 1 MORBI, MORBI

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ITA 752/RJT/2026Status: DisposedITAT Rajkot08 July 2026AY 2020-214 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 the difference between the sale consideration and stamp duty valuation was within the 10% tolerance limit prescribed by the proviso to Section 56(2)(x). Therefore, no addition was warranted.

What were the facts?

The assessee purchased an immovable property, and the stamp duty valuation exceeded the sale consideration. The Assessing Officer made an addition under Section 56(2)(x) for the proportionate difference in valuation for the assessee's share.

What were the issues?

Whether the addition made under Section 56(2)(x) is sustainable when the difference between sale consideration and stamp duty valuation falls within the statutory tolerance limit.

Which sections of the Income-tax Act were involved?

Section 56(2)(x),Section 147,Section 148,Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Rajkot Bench, Rajkot

Before: Dr. Arjun Lal Saini & Shri Sonjoy Sarma

For Appellant: Shri K. T. Hemani, Ld. AR
For Respondent: Shri Ganesh Iyer, Ld. Sr. DR
Hearing: 08/07/2026Pronounced: 08/07/2026

आयकर अपीलीय अिधकरण, राजकोट �यायपीठ, राजकोट। In The Income Tax Appellate Tribunal, Rajkot Bench, Rajkot Before Dr. Arjun Lal Saini, Accountant Member And Shri Sonjoy Sarma, Judicial Member

आयकर अपील सं./ITA No. 752/RJT/2026 [ �नधा�रण वष�/Assessment Year: 2020-21 ] Kruti Rajubhai Manvar Income Tax Officer Ward 1 Morbi 202 Rameshwar Apartment, Lalapar Income Tax Office Aayakar Vibhag, Vs. Road, Morbi, Dist Morbi-363641 J.K.Chamber, National Highway 8-A Gujarat At Lalpar, Morbi-363642 Gujarat �थायीलेखासं./जीआइआरसं./PAN/GIR No.: CNMPM7131D (अपीलाथ�/Appellant) (��यथ�/Respondent) Appellant by : Shri K. T. Hemani, Ld. AR Respondent by : Shri Ganesh Iyer, Ld. Sr. DR Date of Hearing : 08/07/2026 Date of Pronouncement : 08/07/2026

:: ORDER :: Per, Shri Sonjoy Sarma, JM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2020-21, is directed against the order under section 250 of the Income- tax Act, 1961 [hereinafter referred to as ‘the Act’] passed by the National Faceless Appeal Centre [hereinafter referred to as ‘NFAC’], dated 17.03.2026, which in turn arises out of an order passed by assessing officer u/s 147 r.w.s. 144 of the Act, dated 08.02.2025.

ITA No. 752/RJT/2026 Kruti R. Manvar 02. Brief facts of the case are that the assessee filed the return of income for the Assessment Year 2021-22 declaring a total income of ₹7,15,000. Based on information available with the Department, it was noticed that the assessee had purchased an immovable property. The sale consideration recorded in the registered sale deed was ₹1,41,00,000, whereas the stamp duty valuation adopted by the Stamp Valuation Authority was ₹1,55,28,571, resulting in a difference of ₹14,28,571. Consequently, proceedings under Section 147 of the Income-tax Act, 1961 were initiated by issuing notice under Section 148, followed by notice under Section 142(1) of the Act. In response, the assessee explained that he had acquired only a 25% share in the property, which had been jointly purchased along with other co-owners. The assessee’s investment amounted to ₹35,25,000, against which the corresponding stamp duty valuation was ₹38,82,142. It was further explained that the investment of ₹35,25,000 was made out of genuine sources, namely ₹30,00,000 received from his father, ₹1,70,000 from his HUF, ₹2,50,000 from his grandmother and the balance from his own funds. The Assessing Officer, however, observed that the difference between the sale consideration and the stamp duty valuation of the entire property was ₹14,28,571. Since the assessee held a 25% share in the property, the Assessing Officer computed the assessee’s proportionate difference at ₹3,57,142 and treated the same as income under Section 56(2)(x) of the Act.

3.

Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A), who dismissed the appeal and confirmed the addition made by the Assessing Officer.

4.

Dissatisfied with the order of the Ld. CIT (A) assessee is in appeal before this tribunal. At the time of the hearing the Ld. AR submitted that the

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ITA No. 752/RJT/2026 Kruti R. Manvar assessee had purchased only a 25% undivided share in the property and had fully explained the source of investment. It was further submitted that even assuming the provisions of Section 56(2)(x) were applicable, the difference between the sale consideration and the stamp duty valuation of the entire property was only ₹14,28,571, which is almost equal to 10% of the sale consideration of ₹1,41,00,000. It was contended that the proviso to Section 56(2)(x) provides that where the difference between the sale consideration and the stamp duty valuation does not exceed the prescribed tolerance limit of 10%, no addition can be made. Since the difference falls within or is substantially covered by the permissible tolerance limit, the addition of ₹3,57,142 made in the hands of the assessee is unsustainable in law.

5.

On the other hand, Ld. AR supported the orders of the authorities below but could not controvert the factual submissions made on behalf of the assessee.

6.

We have heard the rival submissions and perused the material available on record. It is an undisputed fact that the difference between the registered sale consideration of ₹1,41,00,000 and the stamp duty valuation of ₹1,55,28,571 is ₹14,28,571. The difference is approximately 10% of the sale consideration, which falls within the tolerance limit prescribed under the proviso to Section 56(2)(x) of the Act. Once the variation between the actual consideration and the stamp duty valuation falls within the permissible statutory tolerance, no addition is warranted under Section 56(2)(x). The Assessing Officer was, therefore, not justified in making a proportionate addition of ₹3,57,142 in the hands of the assessee merely because he held a 25% share in the property. Accordingly, we set aside the orders of the

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ITA No. 752/RJT/2026 Kruti R. Manvar authorities below on this issue and direct the Assessing Officer to delete the addition of ₹3,57,142 made under Section 56(2)(x) of the Act.

7.

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

Order pronounced in the open court on this 8th day of July, 2026.

Sd/- Sd/- [ Dr. Arjun Lal Saini ] [ Shri Sonjoy Sarma ] लेखा सद�य/Accountant Member �याियक सद�य/Judicial Member राजकोट/Rajkot िदनांक/ Date: 08/07/2026 Copy of the order forwarded to : 1. The assessee 2. The Respondent 3. CIT 4. The CIT(A) 5. DR, ITAT, Rajkot 6. Guard File By order //True Copy// Sr. Private Secretary ITAT, Rajkot

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