VIKAS BEDPRAKASH PANDEY,MUMBAI vs. INCOME TAX OFFICER, WARD 41(4)(4), MUMBAI
Facts
The assessee purchased an immovable property for Rs. 70,00,000/-. The stamp duty value was Rs. 70,74,519/-, resulting in a difference of Rs. 74,519/-. The Assessing Officer (AO) added this difference to the assessee's income under Section 56(2)(vii)(b) of the Act. The CIT(A) confirmed the addition, holding that the amendment to Section 56(2)(x)(b) was not applicable retrospectively for the assessment year 2017-18.
Held
The Tribunal held that the amendments to Section 50C, including the tolerance limit under Section 56(2)(x)(b)(B), are curative in nature and retrospectively applicable. The difference between the stamp duty value and the sale consideration was found to be 1.065%, which is below the 10% tolerance limit. Therefore, the addition made by the AO was not justified.
Key Issues
Whether the difference between the stamp duty value and the purchase price of an immovable property can be added to the income of the assessee under Section 56(2)(x)(b) of the Income-tax Act, especially when the difference is within the prescribed tolerance limit and the amendment is retrospective.
Sections Cited
250, 147, 148A, 144, 56(2)(vii)(b), 56(2)(x)(b), 50C, 56(2)(x)(b)(B)
AI-generated summary — verify with the full judgment below
IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI “J (SMC)” BENCH, MUMBAI BEFORE SHRI BEENA PILLAI, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No. 646/MUM/2026 (AY:2017-18) Vikas Bedprakash Pandey, vs. Income Tax Officer, Ward 1102 Riddhi Tower, Riddhi Garden 41(4)(4),Kautilya Bhavan, Mumbai- Film City Road, Malad E Mumbai- 400051. 400097. PAN/GIR No: ANWPP9823B (Appellant) (Respondent) Appellant by Ms. Dinkle Hariya, Adv. Respondent by Shri Pankaj Kumar (CIT-DR) Date of Hearing 09.03.2026 Date of Pronouncement 10.03.2026 O R D E R PER BIJYANANDA PRUSETH, AM:
This appeal filed by the assessee emanates from the order passed under
section 250 of the Income-tax Act, 1961 (in short, ‘Act’) by the Commissioner of
Income-Tax (Appeals), National Faceless Appeal Centre [in short, ‘CIT(A)’],
dated 27.11.2025 for the assessment year (AY) 2017-18.
The grounds of appeal raised by the assessee are as under:
“1. In the facts and circumstances of the case and in law, the initiation of reassessment proceeding by invoking the provisions of section 147 r.w.s.148A r.w.s. 144 of the Act is bad in law. 2. The Ld. Assessing Officer has erred in adding difference between stamp duty value and purchase price as income of the assessee u/s 56(2)(vii) (b) of the Act even when the difference was mere 1.065 percent. 3. The appellant craves leave to add, alter and amend the Grounds of appeal.”
Facts of the case in brief are that the assessee filed his return of income
for the AY 2017-18 on 31.03.2018 declaring total income at Rs.8,54,160/-.
Subsequently, the case was reopened u/s 147 and notice u/s 148 was issued on 1
ITA No.646/MUM/2026 (AY 2017-18) Vikas Bedprakash Pandey
30.07.2022. As per the information with the AO, the assessee had purchased
immovable property for a consideration of Rs.70,00,000/- whereas the stamp
duty value was Rs.70,74,519/-. Thus, there was difference of Rs.74,519/-. The AO
added the difference of Rs.74,519/- u/s 56(2)(vii)(b) of the Act. The AO did not
accept reliance of the assessee on the provisions of section 56(2)(x)(b) of the Act
by observing that it was effective from 01.04.2019 (AY 2019-20).
Aggrieved by the order of AO, the assessee filed appeal before the CIT(A).
The appellant submitted that the difference in value of Rs.74,519/- is 0.00995%
of the stamp duty value. Since the difference was not more than 10% of the
transaction value, the addition is against law. The appellant referred to section
56(2)(x)(b) of the Act and submitted that the difference was within the
permissible variation in the Act itself. He relied on the decisions of the Hon’ble
Supreme Court in case of CIT vs. Alom Extrusions Ltd., 185 Taxman 416 (SC) and
Allied Motors Pvt. Ltd. vs. CIT, 91 Taxman 205 (SC) where it was held that curative
nature of amendment should be given retrospective effect. The CIT(A), however,
held that the amendment is effective from AY 2019-20 onwards and hence, not
applicable in case of the assessee for AY 2017-18. For the above reason, addition
of Rs.74,519/- u/s 56(2)(x)(b) of the Act was confirmed and appeal of assessee
was dismissed.
Aggrieved by the order of CIT(A), the assessee filed appeal before the
Tribunal. The Ld. AR has filed a small paper book and submitted that the issue is
ITA No.646/MUM/2026 (AY 2017-18) Vikas Bedprakash Pandey
fully covered by a number of decisions by the Tribunals including the jurisdictional
Mumbai Tribunal. He relied on the decisions in cases of Maria Fernandes Cheryl
vs. ITO (ITA No.4850/Mum/2019 dated 15.01.2021) and Saggar Perimmal vs. ITO
(ITA No.84/Mum/2025 dated 21.03.2025).
On the other hand, the Ld. Sr. AR of the revenue relied on the orders of
lower authorities. However, he submitted that bench may decide the matter as it
thinks fit.
We have heard both sides and perused the materials on record. We have
also deliberated on the decisions relied upon by the Ld. AR. Both the sides agreed
that this is a covered issue in the light of various decisions of the Tribunals
including the jurisdictional ITAT in case of Maria Fernandes Cheryl (supra) and
Saggar Perimmal (supra). The Tribunal in case of Maria Fernandes (surpa) held as
under:-
Once legislature very graciously accepts, by introducing the legal amendments in question, that there were lacunas in the provisions of Section 50 C in the sense that even in the cases of genuine variations between the stated consideration and the stamp duty valuation, anti- avoidance provisions under section 50C could be pressed into service, and thus remedied the law, there is no escape from holding that these amendments are effective with effect from the date on which the related provision, i.e., Section 50C, itself was introduced. These amendments are thus held to be retrospective in effect. In our considered view, therefore, the provisions of the third proviso to Section 50C (1), as they stand now, must be held to be effective with effect from 1st April 2003. We order accordingly. Learned Departmental Representative, however, does not give up. Learned Departmental Representative has suggested that we may mention in our order that "relief is being provided as a special case and this 3
ITA No.646/MUM/2026 (AY 2017-18) Vikas Bedprakash Pandey
decision may not be considered as a precedent". Nothing can be farther from a judicious approach to the process of dispensation of justice, and such an approach, as is prayed for, is an antithesis of the principle of "equality before the law," which is one of our most cherished constitutional values. Our judicial functioning has to be even-handed, transparent, and predictable, and what we decide for one litigant must hold good for all other similarly placed litigants as well. We, therefore, decline to entertain this plea of the assessee. 9. We have noted that as against the stated consideration of Rs 75,00,000, the stamp duty valuation of the property is Rs 79,91,500. The difference is just Rs. 4,91,500, which is about 6.55% of the stated sale consideration. As the difference between the stated consideration vis-à-vis the stamp duty valuation is admittedly less than 10% of the stated consideration in this case, and in the light of the above discussions, we are of the considered view that Section 50C will have no application in the matter. The enhancement in capital gain Assessment year: 2011-12 computation, as made by the Assessing Officer, thus stands disapproved. The assessee gets the relief accordingly.
7.1 The Tribunal in case of Saggar Parimmal also decided the issue in favour of
assessee for AY 2018-19, after referring to the decisions in cases of ACIT vs. Sunil
B Dalal, (2022) 145 taxmann.com 313 (Mum. Trib) and Shri Ashutosh Sinha vs. ITO
(ITA No.643/Mum/2023 dated 29.08.2023) by stating as under:-
In light of these decisions, we find that the amendment in question is curative in nature and is retrospectively applicable for impugned assessment year. Consequently, the assessee is eligible for the 10% tolerance limit under section 56(2)(x)(b)(B) of the Act and the impugned addition is deleted. Furthermore, in ITA No. 85/Mum/2025, the Ld. AO has adopted a view that limits the tolerance threshold to 5% of the total consideration. This view is wholly unjustified and contrary to the correct interpretation of section 56(2)(x)(b)(B) of the Act. Therefore, the addition made on this account is directed to be deleted. With respect to ITA No. 84/Mum/2025, we note that the CIT(A) has passed an ex parte order without considering the merits of the case. Since both assessee’s are co- owners of the property and the issue involved is common, we find it
ITA No.646/MUM/2026 (AY 2017-18) Vikas Bedprakash Pandey
appropriate to decide both appeals in favor of the assessee’s. The principle of mutatis mutandis applies, and accordingly, the grounds raised in both appeals are allowed.
The facts of the instant case are similar to the facts of the cases reproduced
above. The difference between the two values in the instant appeal was only
1.065%, which is below the tolerance limit under section 56(2)(x)(b)(B) of the Act.
Hence, following the reasons given in the decisions cited supra, the grounds are
allowed.
Since we have allowed the appeal on merit, there is no need to adjudicate
the legal and jurisdictional issue of reopening u/s 147 of the Act.
In the result, the appeal of the assessee is allowed.
Order is pronounced on 10.03.2026.
Sd/- Sd/- (BEENA PILLAI) (BIJYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER *Aniket Chand; Sr. PS MUMBAI Date: 10.03.2026 Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, MUMBAI 6. Guard File By Order Assistant Registrar ITAT, MUMBAI
