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Facts
The assessee purchased a property for ₹.86,40,000. The Assessing Officer and CIT(A) confirmed an addition of ₹.20,40,000 based on the difference between the sale consideration and the stamp duty value. The assessee argued that the stamp duty value was incorrect due to a downward revision by the government.
Held
The Tribunal noted the downward revision in the guideline value by the Government of Tamil Nadu after the property purchase. Citing similar precedents, the Tribunal set aside the orders of the lower authorities.
Key Issues
Whether the addition made by the Assessing Officer based on the difference between sale consideration and stamp duty value is justified, especially after a subsequent downward revision of the guideline value.
Sections Cited
56(2)(vii)(b), 148, 50C(1)
AI-generated summary — verify with the full judgment below
Before: Shri S.S. Viswanethra Ravi&
Year: 2018-19 Shri L. Uthayakumar, Vs. The Income Tax Officer, No. 2B, 2nd Street Extn, Jainagar, Ward 4(4), Arumbakkam, Chennai 600 106. Chennai. [PAN:AAAPU7318P] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Shri Y. Sridhar, F.C.A. ��थ� की ओर से/Respondent by : Ms. V. Supraja, Addl.CIT सुनवाई की तारीख/ Date of hearing : 17.07.2025 घोषणा की तारीख /Date of Pronouncement : 14.08.2025 आदेश /O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 20.06.2024 passed by the ld. Commissioner of Income Tax (Appeals)18, Chennai for the assessment year 2018-19.
We find that this appeal is filed with a delay of 247 days. The assessee filed an affidavit for condonation of delay stating the reasons. Upon hearing both the parties and on examination of the said affidavit, we find the reasons stated by the assessee are bonafide, which really prevented in filing the appeal in time. Thus, the delay is condoned and admitted the appeal for adjudication.
The assessee raised 8 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the addition being difference between stamp duty value and sale consideration paid by the assessee in the facts and circumstances of the case.
4. Heard both the parties and perused the material available on record. We note that the assessee purchased property for a consideration of ₹.86,40,000/-. According to the Assessing Officer, the Stamp Value Authority valued the said property at ₹.1,06,80,000/- for the purpose of stamp duty. Accordingly, the Assessing Officer treated the difference of ₹.20,40,000/- [₹.1,06,80,000 – 86,40,000] under section 56(2)(vii)(b) of the Income Tax Act, 1961 [“Act” in short] as income from other sources and added to the total income of the assessee. The ld. CIT(A) confirmed the same.
The ld. AR Shri Y. Sridhar, F.C.A. submits that the ld. CIT(A) erred in holding the action of the Assessing Officer in making the addition under section 56(2)(vii)(b) of the Act. He argued that the value determined by the Stamp Value Authority does not represent correct stamp value and drew our attention to the details in table form placed in page 2 & 3 of the written submissions. He submits that the total value of the building as per PWD guideline value is at ₹.12,84,730/- and the total value for stamp duty purpose is at ₹.92,04,730/- [land value of ₹.79,20,000/- + value of the building at ₹.12,84,730/-]. He submits that the difference between the sale consideration and value of stamp duty at ₹.5,64,730/- was offered as income under section 56(2)(vii)(b) of the Act in the return filed in response to the notice under section 148 of the Act. The ld. AR drew our attention to the guideline value and property valuation of Government of Tamil Nadu as on 17.05.2017 and by referring to Sl. No. 151, he argued that the Government of Tamil Nadu reduced the guideline value of ₹.1474 per sq. ft. as against ₹.2200 per sq. ft., which was considered by this Tribunal in the case of Smt. Sugirda Dinakar v. ITO in vide order dated 12.10.2022. He placed on record copy of the said order and by referring to para 7, submits that the Tribunal remanded the matter to the file of the Assessing Officer with a direction to refer the matter again to the DVO with specific direction to consider the downward revision of guideline value made form 2017 of the relevant area and then estimate the fair market value of the property. Further, he drew our attention to the order of the Delhi Benches of the Tribunal in the case of Vinit Kumar v.
DCIT [2023] 201 ITD 499 (Delhi – Trib.) and also in the case of Mahesh Ramkrishna Bhingare v. JCIT [2024] 207 ITD 694 (Nagpur – Trib.) and argued that the provisions of section 56(2)(vii)(b) of the Act cannot be invoked when there was no under-statement of purchase rate. Further, no addition is maintainable if the tolerance margin given in 50C(1) of the Act of 10%.
The ld. DR Ms. V. Supraja, Addl. CIT relied on the order of the ld. CIT(A).
We note that admittedly, the Government of Tamil Nadu made downward revision in the guideline value from 2017 and the competitive details are placed on record by the assessee. We find that the assessee purchased the property on 17.05.2017 admeasuring 3600 sq. ft. @ rate of ₹.2200 per sq.ft., whereas, approximately within 25 days, the Government of Tamil Nadu made downward revision of guideline value of ₹.1474 per sq. ft. as against ₹.2200 per sq. ft. w.e.f. 09.06.2017. Under such scenario on an identical issue, in the case of Smt. Sugirda Dinakar v. ITO (supra), we find that the Tribunal remanded the matter to the file of the Assessing Officer with a direction to refer the matter again to the DVO with specific direction to consider the downward revision of guideline value made form 2017 of the relevant area and then estimate the fair market value of the property accordingly. Thus, we set aside the orders of authorities below and remand the matter to the file of the Assessing Officer for fresh consideration keeping in view of the order of this Tribunal referred herein above. Thus, the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 14th August, 2025 at Chennai.