VIPUL NARSHIBHAI SAVANI,SURAT vs. ITO WARD 3(3)(5), SURAT

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT (PHYSICAL HEARING) Before: Smt. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member

ITA No: 445/SRT/2025 Assessment Year: 2012-13

Vipul Narshibhai Savani Income Tax Officer 11, Shivam Swetrajhans Ward-3(3)(5), Society, Khodiyar Nagar, Vs Surat Varchha Road, Surat-395006 PAN: ARXPS7401F (Appellant) (Respondent) Assessee Represented: Shri Yogesh B Shah, AR Revenue Represented: Shri Ajay Uke, Sr. D.R. Date of hearing : 28-04-2026 Date of pronouncement : 06-07-2026 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

This appeal is filed by the Assessee as against the appellate order dated 30.04.2024 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the reassessment order passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2012-13. 2. Brief facts of the case are the assessee is in individual, filed his return of income for the assessment year 2012-13 on 24.11.2012

I.T.A No. 445//SRT/2025 A.Y. 2012-13 Page No 2 Vipul Narshibhai Savani vs. ITO

declaring total income of Rs. 4,85,260/-. The AO has information that the assessee purchased agricultural land vide sale deed dated 12.005.2011 (along with 7 co-owners) for a sale consideration of Rs. 88,20,000/- but paid stamp duty of Rs.7,34,500/- as his share of cost. For the purpose of stamp duty the property was valued at Rs. 8,77,65,400/- thereby assessee’s share works out to Rs.51,63,600/-. Therefore assessment was reopened and a show cause notice issued, as to why not brought to tax as assessee’s income under Section 56(2)(vii)(b) of the Act. The assessee has not responded to the notice which was resulted in passing ex-parte order making an addition of Rs. 51,63,600/- under Section 56(2)(vii)(b) of the Act and demanding tax thereon. 3. Aggrieved against the reassessment order, assessee filed an appeal before Ld. CIT(A) and contended that provisions of Section 56(2)(vii)(b) of the Act will not be applicable to the present assessment year 2012-13. Since amendment made to Section 56(2)(vii)(b) of the Act were with effect from 01.04.2014, prospective only. The assessee further claimed the land purchased being agricultural land no question of invoking provisions of Section 50C of the Act. The above submission was considered by Ld. CIT(A) however, rejected the same and dismissed the assessee appeal. Aggrieved against the same, the assessee is in appeal before 4. us raising following Grounds of Appeal:-

I.T.A No. 445//SRT/2025 A.Y. 2012-13 Page No 3 Vipul Narshibhai Savani vs. ITO

of mine. That such amendments are prospective and cannot be enforced with restropective effect. 2. The learned CIT (APPEAL) has erred in not taken in to account of non- observation of rules made by the Hon. Supreme court in the case of G.K.N Where Assessing Officer is required to provide the reason for re-opening my case U/S 147 of the Act and thereby prevented the assesse from raising abjections against the Re-opening. In my case, reasons for re-opening were not provided by the A.O. 3. The learned CIT (APPEAL) (NFAC) has erred in not taking into account various submission made by the assessee manually before the Assessing Officer, ward 3(3)(5), Surat where at the relevant time period, the assessee was allowed manual submission in response to the notices U/S 142 issued by the assessing officer. 4. The learned Assessing Officer ward 3(3)(5), Surat has erred in charging interest U/S 234-A, U/S 234-B, U/S 234-C of the Act. The same is also confirmed by the CIT (A), NFAC on the facts of the case, the same should not be charged. 5. The learned Assessing Officer, ward 3(3)(5), Surat has erred in issue of notice U/S 271(1)(c) of the act. On the facts and in the circumstances of the case such notice should not be issued. 6. The appellant may be allowed to alter, rectify, modify or to withdraw grounds of appeal duly raised by the assesse or to raise new grounds of appeal during the appellate proceeding.

I.T.A No. 445//SRT/2025 A.Y. 2012-13 Page No 4 Vipul Narshibhai Savani vs. ITO

“The existing provisions of sub clause (b) of clause (vii) of sub-section (2) of section 56 of the Income-tax Act, inter alia, provide that where any immovable property is received by an individual or HUF without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property would be charged to tax in the hands of the individual or HUF as income from other sources.

The existing provision does not cover a situation where the immovable property has been received by an individual or HUF for inadequate consideration. It is proposed to amend the provisions of clause (vii) of sub-section (2) of section 56 so as to provide that where any immovable property is received for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration, shall be chargeable to tax in the hands of the individual or HUF as income from other sources.

Considering the fact that there may be a time gap between the date of agreement and the date of registration, it is proposed to provide that where the date of the agreement fixing the amount of consideration for the transfer of the immovable property and the date of registration are not the same, the stamp duty value may be taken as on the date of the agreement, instead of that on the date of registration. This exception shall, however, apply only in a case

I.T.A No. 445//SRT/2025 A.Y. 2012-13 Page No 5 Vipul Narshibhai Savani vs. ITO

where the amount of consideration, or a part thereof, has been paid by any mode other than cash on or before the date of the agreement fixing the amount of consideration for the transfer of such immovable property. This amendment will take effect from 1s1 April, 2014 and will, accordingly, apply in relation to the assessment year 2014-15 and subsequent assessment years. [Clause 9]” 9. It has been explicitly mentioned in the Memorandum that the existing provision was applicable to immovable property received without consideration only and that it did not cover cases of inadequate consideration. In order to include the cases of inadequate consideration, the provision of Section 56(2)(vii)(b) of the Act was amended with effect from 01.04.2014. It is categorically mentioned that this amendment was effective from 01.04.2014 onwards and applicable to A.Y. 2014-15 and subsequent years. Therefore, this amendment cannot be extended to past years. Accordingly, no addition u/s. 56(2)(vii)(b) of the Act could have been made in A.Y. 2012-13 u/s. 56(2)(vii)(b) of the Act in the case of inadequate consideration. Therefore, the addition as made by the AO cannot be sustained.”

7.1 Respectfully following the above decision of the Tribunal, we have no hesitation in holding that the addition made by the Assessing Officer under Section 56(2)(vii)(b) of the Act is not sustainable in law for the assessment year 2012-13. Thus the legal ground raised by the assessee is hereby allowed. Therefore, the remaining grounds does not require separate adjudication. 8. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 06-07-2026

Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat : Dated 06/07/2026 *Santosh आदेश क� �ितिलिप अ�ेिषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue

I.T.A No. 445//SRT/2025 A.Y. 2012-13 Page No 6 Vipul Narshibhai Savani vs. ITO