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Facts
The assessee purchased a plot of land with his wife for Rs. 79,92,000, while the stamp duty valuation was Rs. 1,39,86,000. The Assessing Officer added Rs. 44,95,500 (representing the assessee's 3/4th share of the difference) to his income under Section 56(2)(x) as 'income from other sources' due to no response from the assessee to a show cause notice. The CIT(A) upheld this addition.
Held
The Tribunal noted that a similar issue in the assessee's wife's case had been set aside to the AO with a direction to refer the property valuation to the DVO. Accordingly, the Tribunal remitted the present appeal back to the Assessing Officer to reconsider the issue afresh, along with the wife's case, and to refer the valuation of the property to the DVO if necessary.
Key Issues
Whether the difference between the actual sale consideration and the stamp duty valuation of purchased property can be added as income under Section 56(2)(x) without referring the property's valuation to the Departmental Valuation Officer (DVO).
Sections Cited
143(1), 143(3), 144B, 56(2)(x)
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Income Tax Appellate Tribunal, “C” BENCH, KOLKATA
O R D E R
Per Manjunatha G, AM:
This appeal filed by the assessee is directed against the order passed by the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 17.03.2025 pertaining to assessment year 2020-2021, on the following grounds :-
1. That the addition a sum of Rs. 44,95,500/- is bad. illegal and arbitrary in nature.
2. That without considering the actual purchase consideration of the landed property, the enhance valuation determined by stamp duty valuer is mere a guess work and such enhanced valuation is without any basis. Hence such enhancement shall liable to be quashed.
3. That the Assessing Officer ought to have considered the alternative remedy which are available in Income Tax Act and refer this matter to the DVO for fresh valuation.
4. That on the basis of mere difference between stamp duty valuation and actual sale consideration shall not be the sole determination for such unlawful and illegal addition. Hence the benefit of law which are available and prescribed in the act shall be taken into consideration at the time of such determination of such income tax liability.
2 ITANo.869/Kol/2025 5. That the Assessee craves leave to file any further grounds to appeal or to amend any grounds of appeal in any time or at the time of hearing stage.
2. Brief facts of the case are that the assessee has filed his return of income for the assessment year 2020-2021 on 12.11.2020 declaring a taxable income of Rs.19,98,390/-, which was processed u/s.143(1) of the Act. The case of the assessee was selected for scrutiny and during the course of assessment proceedings it was noticed that the assessee has purchased a plot of land along with his wife Smt. Nineesha Das for a consideration of Rs.79,92,000/- and the stamp duty value on the said property was at Rs.1,39,86,000/-. Further in the said property the assessee’s share was 3/4th of the total landed property and the remaining 1/4th share was with assessee’s wife Smt. Nineesha Das. The Assessing Officer called upon the assessee to explain as to why the provision of Section 56(2)(x) of the Act cannot be invoked and difference between sale consideration and stamp duty value cannot be assessed as income from other sources. The assessee did not respond to the show cause notice issued by the AO. Therefore, the Assessing Officer completed the assessment u/s.143(3) r.w.s.144B of the Act on 24.05.2022 and determined total income at Rs.64,93,890/- by making addition of Rs.44,95,500/- being 3/4th share of difference between the sale consideration as per the registered document and fair market value of the property as determined by the stamp duty authority at Rs.59,94,000/- u/s.56(2)(x) of the Act.
3. On appeal, the ld.CIT(A) sustained the addition made by the AO.
3 ITANo.869/Kol/2025 4. Ld. counsel for the assessee referring to the decision of the coordinate bench of the Tribunal in assessee’s wife’s case namely Smt. Nineesha Das, in order dated 15.07.2025, submitted that the additions made by the Assessing Officer towards difference in sale consideration and fair market value of the property in the case of Smt. Nineesha Das, the wife of the assessee has been set aside to the Assessing Officer with a direction to reconsider the issue after referring the valuation of the property to the DVO before making any addition u/s.56(2)(x) of the Act. Since the issue involved in the present appeal is on the very same issue being 3/4th share of the investment by the assessee in the said property, the matter may be restored to the file of ld.AO to reconsider the issue afresh along with the case of the assessee’s wife which is now pending before the Assessing Officer.
Ld.Sr. DR, on the other hand, fairly agreed that the matter may be remitted to the file of Assessing Officer to reconsider the issue in the light of the direction of the Tribunal given in the case of assessee’s wife namely Smt. Nineesha Das.
We have heard both the parties, perused the material available on record and gone through the orders of the authorities below. There is no dispute in regard to the fact that the assessee along with his wife had purchased a plot of land for a consideration of Rs.79,92,000/-, whereas the value adopted by the stamp valuation authority for the purpose of stamp duty was at Rs.1,39,86,000/-. It is also not in dispute that, in the said property the assessee had invested 3/4th share and his wife had invested 1/4th share. The Assessing Officer made addition u/s.56(2)(x) of the Act for 4 ITANo.869/Kol/2025 Rs.44,95,500/- being 3/4th share of Rs.59,94,000/- (Rs.1,39,86,000 – 79,92,000). We find that the case of Smt. Nineesha Das, wife of the assessee reached to the Tribunal on the very same issue in ITA No.794/Kol/2025, wherein the Tribunal vide order dated 15.07.2025 has set aside the issue to the file of Assessing Officer with a direction to reconsider the issue after obtaining the valuation of the property from the DVO before making any addition u/s.56(2)(x) of the Act. In the present case, since the issue is very same i.e the 3/4th share of difference between sale consideration and fair market value of the property as determined by the stamp duty authority, in our considered view the matter needs to be set aside to the file of Assessing Officer with a direction to reconsider the issue along with the case of the assessee’s wife Smt. Nineesha Das in the light of the direction given by the Tribunal in ITA No.794/Kol/2025 vide order dated 15.07.2025. We further direct the Assessing Officer to refer the valuation of the property to the DVO, if necessary and apply the fair market value as determined by the DVO, after considering relevant sale consideration as per the registered deed in terms of Section 56(2)(x) of the Act.
In the result, appeal of the assessee is allowed for statistical purposes. Order dictated in the open court on 19/09/2025. (SONJOY SARMA) (MANJUNATHA G) न्यधनयक सदस्य / JUDICIAL MEMBER लेखा सदस्य/ ACCOUNTANT MEMBER कोलकाता Kolkata; ददनाांक Dated 19/09/2025 Prakash Kumar Mishra, Sr.P.S.