KOPPAL RAMACHARI RAMESH,SALEM vs. DCIT, CIRCLE-1(1), SALEM

Aggrieved by the order of assessment making addition u/s.56(2)(x) of the Act amounting to Rs.3,31,900/-, assessee filed appeal before the First Appellate Authority (FAA). Before the FAA, it was submitted that the stamp duty value of the property is only Rs.30,31,900/- and not Rs.32,31,900/-. It was submitted that assessee had inadvertently, in reply to notice u/s.148A(b) of the Act, had mentioned the figure of Rs.32,31,900/- but however, showed the correct difference of value between purchase and stamp duty value on the correct figure at Rs.1,31,900/- (Rs.30,31,900/- – Rs.29,00,000/-). It was submitted if the correct figure of stamp duty value is taken, the purchase price of assessee being at Rs.29,00,000/-, the difference would be not exceeding 5% of the tolerance limit. Alternatively, it was contended by the assessee even assuming if the stamp duty value is Rs.32,31,900/- section 56(2)(x) of the Act has been amended, whereby tolerance :- 4 -: limit has been increased from 5% to 10%. Hence, it was contended that the difference of Rs.3,31,900/- would come within the tolerance limit of 10%.

The FAA however, rejected the contention of the assessee. The FAA held that assessee himself had stated the market value / stamp duty value at Rs.32,31,900/- in proceedings u/s.148A of the Act. It was further held by the FAA since no other documents were filed in support of subsequent claim of the assessee that the market value of the property is Rs.30,31,900/-. Therefore, the market value adopted by the AO is to be upheld. The FAA has also rejected the alternative contention of the assessee by holding that for the relevant assessment year, the tolerance limit is only 5% and not 10%, which was effective only for and from assessment year 2021-22 onwards.

Aggrieved by the order of the FAA, assessee has filed the present appeal before the Tribunal. The assessee has filed two sets of paper-book. In one set of paper-book, assessee has enclosed the notices issued during the course of proceedings before the AO, the FAA, the written submissions filed before the FAA. In the other set of paper-book, assessee has furnished the :- 5 -: evidences in support of his claim that the market value / stamp duty value fixed for the impugned property is only Rs.30,31,900/- instead of Rs.32,31,900/- as adopted by the AO for making the addition u/s.56(2)(x) of the Act. The Ld.AR reiterated the submissions made before the income-tax authorities.

The Ld.DR strongly supported the orders of the AO and the FAA.

I have heard the rival submissions and perused the materials available on record. The assessee has contended that the Stamp Duty Authority had fixed the value of the impugned property at Rs.30,31,900/- as against Rs.32,31,900/- adopted by the AO. If the correct value of Rs.30,31,900/- is considered, the difference between the stamp duty value and the purchase consideration would be less than 5%. Hence, no addition is warranted under section 56(2)(x) of the Act. It is seen that the AO had adopted the value of Rs.32,31,900/- based on the assessee’s letter dated 13.03.2023, wherein the stamp duty value was inadvertently mentioned as Rs.32,31,900/-, though the difference was correctly shown as Rs.1,31,900/-. Subsequently, the assessee had given reply dated 03.10.2023 stating the inadvertent error committed earlier. The assessee also furnished :- 6 -: the certificate of Encumbrance which clearly shows that the stamp duty fixed by the Special Deputy Collector (Stamps) was at Rs.30,31,900/-. The said evidence that was produced before the AO is placed on record in the paper-book filed by the assessee. On careful perusal of the same, it is evident that the correct value determined by the Special Deputy Collector (Stamps) is Rs.30,31,900/-. Accordingly, since the purchase price of Rs.29,00,000/- is within the permissible tolerance limit of 5%, no addition is warranted under section 56(2)(x) of the Act. It is ordered accordingly.

In the result, the appeal filed by the assessee is allowed.

Ĥ×यथȸ/Respondent 3. आयकर आयुÈत /CIT, Salem 4. ͪवभागीय ĤǓतǓनͬध/DR

गाड[ फाईल/GF.