DATTARAM NANA SHINDE,ANDHERI WEST MUMBAI vs. ITO 42(2)(1) MUMBAI, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “H(SMC)” MUMBAI

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI KAVITHA RAJAGOPAL (JUDICIAL MEMBER)

ITA No. 1647/MUM/2026 Assessment Year: 2017-18

Late Shri Dattaram Nana ITO 42(2)(1) Shinde, Assessment Unit Income Tax Vs. (through – Legal Department, Mumbai- 400020 Representative, Smt. Priyanka Maharashtra. Dattaram Shinde) A 1201, Serenity Complex, Oshiwara, Mumbai – 400102, Maharashtra. PAN NO. AHZPS 3377 C Appellant Respondent

: Mr. Devendra Kothari Assessee by Revenue by : Shri Pravin Salunkhe, (Sr. DR)

: 13/05/2026 Date of Hearing Date of pronouncement : 20/05/2026 ORDER PER OM PRAKASH KANT, AM

This appeal by the Assessee is directed against order dated 23.12.2025, passed by the learned Commissioner of Income-Tax (Appeals) – National Faceless Appeal Centre, Delhi (in short, “the Ld. CIT(A)”), for Assessment Year (in short ‘A.Y.’) 2017–18, raising following grounds:

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“1. The Learned CIT(A) erred by confirming the additions to the extent of Rs. The Learned CIT(A) erred by confirming the additions to the extent of Rs. The Learned CIT(A) erred by confirming the additions to the extent of Rs. 116250/- without considering the reasons for Valuation difference for property without considering the reasons for Valuation difference for property without considering the reasons for Valuation difference for property purchases and the judicial pronouncement of Mumbai IATA. purchases and the judicial pronouncement of Mumbai 2. We have heard the rival submissions and We have heard the rival submissions and perused the material perused the material available on record. The undisputed facts emerging from the record available on record. The undisputed facts emerging from the record available on record. The undisputed facts emerging from the record are that the assessee, along with her late husband, had purchased are that the assessee, along with her late husband, had purchased are that the assessee, along with her late husband, had purchased an immovable property for a total consideration of Rs.36,00,000/-, an immovable property for a total consideration of Rs.36,00,000/ an immovable property for a total consideration of Rs.36,00,000/ whereas the value adopted by the st whereas the value adopted by the stamp valuation authority for the amp valuation authority for the purposes of stamp duty stood at Rs.38,32,500/ purposes of stamp duty stood at Rs.38,32,500/- 3. The assessee had originally filed the return of income for the The assessee had originally filed the return of income for the The assessee had originally filed the return of income for the year under consideration on 13.07.2017 declaring total income at year under consideration on 13.07.2017 declaring total income at year under consideration on 13.07.2017 declaring total income at Rs.14,26,890/-. Subsequently, on the basis of . Subsequently, on the basis of information received information received from the stamp valuation authority regarding the differential from the stamp valuation authority regarding the differential from the stamp valuation authority regarding the differential valuation of the property, reassessment proceedings were initiated valuation of the property, reassessment proceedings were initiated valuation of the property, reassessment proceedings were initiated under the amended provisions of Section 148 of the Income-tax Act, under the amended provisions of Section 148 of the Income under the amended provisions of Section 148 of the Income 1961 (“the Act”). An order under Sectio 1961 (“the Act”). An order under Section 148A(d) came to be passed n 148A(d) came to be passed on 20.07.2022, followed by issuance of notice under Section 148 on on 20.07.2022, followed by issuance of notice under Section 148 on on 20.07.2022, followed by issuance of notice under Section 148 on 29.07.2022. Since no valid return of income was filed in response 29.07.2022. Since no valid return of income was filed in response 29.07.2022. Since no valid return of income was filed in response thereto, the Assessing Officer proceeded to frame the reassessment thereto, the Assessing Officer proceeded to frame the reassessment thereto, the Assessing Officer proceeded to frame the reassessment and invoked the provisions o and invoked the provisions of Section 56(2)(vii)(b) of the Act on the f Section 56(2)(vii)(b) of the Act on the premise that the differential amount exceeded the threshold limit of premise that the differential amount exceeded the threshold limit of premise that the differential amount exceeded the threshold limit of Rs.50,000/-. 4. In appeal before the learned CIT(A), the legal representative of In appeal before the learned CIT(A), the legal representative of In appeal before the learned CIT(A), the legal representative of the deceased assessee explained the circumstances under which the deceased assessee explained the circumstances under which the deceased assessee explained the circumstances under which the property had been purchased at a value lower than the stamp the property had been purchased at a value lower than the stamp the property had been purchased at a value lower than the stamp

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duty valuation and further contended that the property having been duty valuation and further contended that the property having bee duty valuation and further contended that the property having bee acquired jointly with the assessee’s spouse, the addition, if any, acquired jointly with the assessee’s spouse, the addition, if any, acquired jointly with the assessee’s spouse, the addition, if any, ought to have been restricted to the assessee’s 50% share. ought to have been restricted to the assessee’s 50% share. ought to have been restricted to the assessee’s 50% share.

“6. Observation and Decision of the CIT(Appeals): Observation and Decision of the CIT(Appeals):

Contention of the Appellant: Contention of the Appellant: In her response dated 16/06/2025 the legal heir Smt Priyanka Dattaram N. In her response dated 16/06/2025 the legal heir Smt Priyanka Dattaram N. In her response dated 16/06/2025 the legal heir Smt Priyanka Dattaram N. Shinde had raised the grounds for the appeal regarding the assessment passed Shinde had raised the grounds for the appeal regarding the assessment passed Shinde had raised the grounds for the appeal regarding the assessment passed under Section 147 on May 28, 2023 in the case of the late Mr. Dattaram N. on May 28, 2023 in the case of the late Mr. Dattaram N. on May 28, 2023 in the case of the late Mr. Dattaram N. Shinde for the assessment year 2017 Shinde for the assessment year 2017-18 wherein total income was assessed at 18 wherein total income was assessed at Rs. 1,659,390 against a returned income of Rs. 1,426,890.An addition of Rs. Rs. 1,659,390 against a returned income of Rs. 1,426,890.An addition of Rs. Rs. 1,659,390 against a returned income of Rs. 1,426,890.An addition of Rs. 232,500 was made under Section 56 due to the di 232,500 was made under Section 56 due to the difference between the property fference between the property purchase agreement value (Rs. 3,600,000) and the stamp authority value (Rs. purchase agreement value (Rs. 3,600,000) and the stamp authority value (Rs. purchase agreement value (Rs. 3,600,000) and the stamp authority value (Rs. 3,832,500). The appellant expressed her grievance regarding inadequate response time, The appellant expressed her grievance regarding inadequate response time, The appellant expressed her grievance regarding inadequate response time, stating that the Assessing Officer (A.O.) issued a show stating that the Assessing Officer (A.O.) issued a show-cause no cause notice on May 24, 2023, requiring a response by May 26, 2023. This provided only two days for a 2023, requiring a response by May 26, 2023. This provided only two days for a 2023, requiring a response by May 26, 2023. This provided only two days for a response. The final order was passed on May 28, 2023, before the notice could response. The final order was passed on May 28, 2023, before the notice could response. The final order was passed on May 28, 2023, before the notice could be forwarded to a CA and responded to effectively. The appellant stated that the be forwarded to a CA and responded to effectively. The appellant stated that the be forwarded to a CA and responded to effectively. The appellant stated that the A.O. acknowledged submissions made on January 25, 2023, but the assessee's . acknowledged submissions made on January 25, 2023, but the assessee's . acknowledged submissions made on January 25, 2023, but the assessee's reply was not accepted. reply was not accepted. The appellant argued that the property was purchased in joint names with the The appellant argued that the property was purchased in joint names with the The appellant argued that the property was purchased in joint names with the assessee's wife, Mrs. Priyanka D. Shinde. Consequently, any income addition assessee's wife, Mrs. Priyanka D. Shinde. Consequently, any income addition assessee's wife, Mrs. Priyanka D. Shinde. Consequently, any income addition should have been limited to 50% of the variation (Rs. 116,250) rather than the full have been limited to 50% of the variation (Rs. 116,250) rather than the full have been limited to 50% of the variation (Rs. 116,250) rather than the full amount. The variation between the agreement and stamp value is 6.45%. Under amount. The variation between the agreement and stamp value is 6.45%. Under amount. The variation between the agreement and stamp value is 6.45%. Under the Finance Act 2020, this falls within the acceptable "Safe Harbor" limits. It was the Finance Act 2020, this falls within the acceptable "Safe Harbor" limits. It was the Finance Act 2020, this falls within the acceptable "Safe Harbor" limits. It was argued that the increase in safe harbor limits is curative and should relate back rease in safe harbor limits is curative and should relate back rease in safe harbor limits is curative and should relate back

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to the date the statutory provisions were enacted, as supported by various court to the date the statutory provisions were enacted, as supported by various court to the date the statutory provisions were enacted, as supported by various court rulings. Observation of the CIT(Appeals): Observation of the CIT(Appeals): I have considered the submissions of the appellant and the facts of the case. I have considered the submissions of the appellant and the facts of th I have considered the submissions of the appellant and the facts of th Appellant stated that the reason for difference in the valuation of the property Appellant stated that the reason for difference in the valuation of the property Appellant stated that the reason for difference in the valuation of the property was that it was purchased in haste as the vendor was in hurry to sell the was that it was purchased in haste as the vendor was in hurry to sell the was that it was purchased in haste as the vendor was in hurry to sell the property. The explanation is not satisfactory as in distress sales the value property. The explanation is not satisfactory as in distress sales the value property. The explanation is not satisfactory as in distress sales the value normally is less. Appellant further quoted the safe harbour rule of 5 percent and subsequent 10 Appellant further quoted the safe harbour rule of 5 percent and subsequent 10 Appellant further quoted the safe harbour rule of 5 percent and subsequent 10 percent. However, this law was incorporated in the Act through Finance Act 2018 percent. However, this law was incorporated in the Act through Finance Act 2018 percent. However, this law was incorporated in the Act through Finance Act 2018 and 2020 which is after the present assessment year which is being deliberated. and 2020 which is after the present assessment year which is being deliberated. and 2020 which is after the present assessment year which is being deliberated. Another contention of the appellant was that the property was purchased in joint on of the appellant was that the property was purchased in joint on of the appellant was that the property was purchased in joint names and therefore, the addition if any should be restricted to Rs. 116250/-. I names and therefore, the addition if any should be restricted to Rs. 116250/ names and therefore, the addition if any should be restricted to Rs. 116250/ am in agreement with the appellant that when there are two co-owners, the am in agreement with the appellant that when there are two co am in agreement with the appellant that when there are two co difference u/s 56(2) should be restr difference u/s 56(2) should be restricted to 50 percent. AO is directed to add icted to 50 percent. AO is directed to add Rs.116250/-accordingly. The appellant gets a relief of Rs. 116250/ accordingly. The appellant gets a relief of Rs. 116250/-. accordingly. The appellant gets a relief of Rs. 116250/ In view of the above, appeal is partly allowed. In view of the above, appeal is partly allowed.” 6. Having considered the rival submissions, we find that the sole Having considered the rival submissions, we find that the sole Having considered the rival submissions, we find that the sole controversy requiring adjudi controversy requiring adjudication in the present appeal pertains to cation in the present appeal pertains to the applicability of the tolerance band provided under Section the applicability of the tolerance band provided under Section the applicability of the tolerance band provided under Section 56(2)(x) of the Act in respect of variation between the actual sale 56(2)(x) of the Act in respect of variation between the actual sale 56(2)(x) of the Act in respect of variation between the actual sale consideration and the value adopted for stamp duty purposes. consideration and the value adopted for stamp duty purposes. consideration and the value adopted for stamp duty purposes.

6.1 It is by now well It is by now well-settled through a catena of decisions settled through a catena of decisions rendered by various co rendered by various co-ordinate Benches of the Tribunal that the ordinate Benches of the Tribunal that the enhanced tolerance band introduced by subsequent legislative enhanced tolerance band introduced by subsequent legislative enhanced tolerance band introduced by subsequent legislative amendments is curative and declaratory in nature and, therefore, amendments is curative and declaratory in nature and, therefore, amendments is curative and declaratory in nature and, therefore, deserves to be applied retrospectively from the inception of the to be applied retrospectively from the inception of the to be applied retrospectively from the inception of the relevant provision itself. The object underlying the introduction of relevant provision itself. The object underlying the introduction of relevant provision itself. The object underlying the introduction of such tolerance margin is manifestly to obviate hardship arising such tolerance margin is manifestly to obviate hardship arising such tolerance margin is manifestly to obviate hardship arising from marginal variations between actual transaction value and from marginal variations between actual transaction value and from marginal variations between actual transaction value and stamp duty valuation, which may occur for a variety of bona fide duty valuation, which may occur for a variety of bona fide duty valuation, which may occur for a variety of bona fide commercial reasons. commercial reasons.

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6.2 In the present case, the variation between the purchase In the present case, the variation between the purchase In the present case, the variation between the purchase consideration disclosed by the assessee and the value adopted by consideration disclosed by the assessee and the value adopted by consideration disclosed by the assessee and the value adopted by the stamp valuation authority is approximately 6.45%, as duly the stamp valuation authority is approximately 6.4 the stamp valuation authority is approximately 6.4 noted by the lower authorities. Once the differential falls within the noted by the lower authorities. Once the differential falls within the noted by the lower authorities. Once the differential falls within the permissible tolerance limit of 10%, no addition under Section permissible tolerance limit of 10%, no addition under Section permissible tolerance limit of 10%, no addition under Section 56(2)(x) of the Act can legally survive. Consequently, the addition 56(2)(x) of the Act can legally survive. Consequently, the addition 56(2)(x) of the Act can legally survive. Consequently, the addition sustained by the learned CIT(A) is unsustai sustained by the learned CIT(A) is unsustainable in law and liable nable in law and liable to be deleted. 6.3 We, We, We, accordingly, accordingly, accordingly, direct direct direct deletion deletion deletion of of of the the the addition addition addition of of of Rs.1,16,250/- sustained by the learned CIT(A). The sole ground sustained by the learned CIT(A). The sole ground sustained by the learned CIT(A). The sole ground raised by the assessee stands allowed. raised by the assessee stands allowed. 7. In the result, appeal of the assess In the result, appeal of the assessee is allowed. is allowed.

Order pronounced in the open Court on 20 ounced in the open Court on 20/05/2026. /05/2026. Sd/- Sd/ Sd/- (KAVITHA RAJAGOPAL KAVITHA RAJAGOPAL) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 20/05/2026 Kunal Kumar, P.S.

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

BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai