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Facts
The appellant purchased a property in 2008 for Rs. 7,00,000/-. The Stamp Duty Valuation (SDV) on 10.05.2016 was Rs. 30,97,000/-, leading the AO to make an addition under Section 56(2)(x) for the difference. The appellant contended that the transaction and payment occurred in 2008 and the property was old, thus Section 56(2)(x) was not applicable for AY 2017-18.
Held
The Tribunal held that the transaction was entered into on 10.04.2008, with possession obtained and consideration paid in the same year. Therefore, no part of the transaction could be said to have taken place in FY 2016-17 for AY 2017-18. Additionally, the notice under Section 148A was not issued within the time limit prescribed by Section 149(1)(a) of the Act.
Key Issues
Whether the addition under Section 56(2)(x) is valid when the property transaction and payment occurred in an earlier assessment year, and if the reassessment notice was issued within the prescribed time limits under Section 149.
Sections Cited
147, 144B, 56(2)(x), 148A, 149(1)(a), 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: JUSTICE (RETD.) C.V. BHADANG & SHRI VIKRAM SINGH YADAV
PER JUSTICE (RETD.) C.V. BHADANG, PRESIDENT :
By this appeal, the appellant-assessee is challenging the order dated 12.08.2025 passed by NFAC, Delhi (‘CIT(A)’ for short), which in turn arose out of assessment order dated 10.05.2023 passed by the Assessing Officer (‘AO’ for short) under Section 147 of the Income Tax Act, 1961 (‘Act’ for short) read with Section 144B of the Act thereby making an addition of Rs.1,83,909/- under Section 56(2)(x) of the Act. The appeal relates to assessment year 2017-18.
The brief facts are that the assessee filed her Return of Income (RoI) for the relevant assessment year declaring an income of Rs.5,02,320/-. The case was reopened on account of information relating to purchase of an immoveable property by the assessee for Rs.7,00,000/- during the relevant period. According
Juee Sudhir Gore to the learned AO, the property was purchased on 10.05.2016. The AO found that the Stamp Duty Valuation (SDV) of the property at the relevant date was Rs.30,97,000/- and, therefore, proposed the addition of the difference of Rs.23,97,000/- under Section 56(2)(x) of the Act. Statutory notice was issued on 11.06.2021, which was treated as being issued under Section 148A(b) of the amended provisions of the said Act as per the decision of the Supreme Court in Union of India vs Ashish Agrawal, 444 ITR 1 (SC) read with the Instruction No. 1 of 2022 dated 11.05.2022 issued by the CBDT. The assessee was provided with the reasons for reopening with the copy of the prior approval from the competent authority. In response to the notice, the AO has noted that no reply was filed. Accordingly, the order under Section 148A(d) of the Act was passed on 22.07.2022 in compliance of which the assessee filed her RoI. According to the assessee, the said property was purchased by her alongwith her husband for a consideration of Rs.7,00,000/- on 10.04.2008. The possession of the property was obtained in 2008 itself. It was thus contended that there was no income received or accrued to the appellant during the financial year 2016-17. Only the registration of the property was made during the financial year 2016-17. It was thus contended that the provisions of Section 56(2)(x) of the Act are not applicable for the year under consideration, i.e. assessment year 2017-18. It was contended that the SDV as on 10.04.2008 is relevant instead of SDV as on 10.05.2016. It was further contended that the Occupation Certificate of the property was obtained on 16.02.2000 and on 10.04.2008 the property was eight years old and the prescribed depreciation rate in respect of the same is 10% for which the appellant enclosed the ASR guidelines for valuation of the property issued by the Government of Maharashtra. It was, therefore, contended that the SDV of the appellant’s share of the property (i.e. 50%) is Rs.5,33,909/- only. It was, therefore, contended that the addition, if any, has to be restricted to
Nevertheless, the appellant challenged the same before the First Appellate Authority, inter alia, on the ground of absence of approval under Section 151 of the Act from the appropriate authority. It was also contended that the notice under Section 148 of the Act issued on 22.07.2022 was beyond the period of three years as the time extended by virtue of The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (‘TOLA’ for short) expired on 02.07.2022. It was also contended that the mandate of Section 149(1)(b) of the Act is violated.
The learned CIT(A) has refused to accept the challenge and dismissed the appeal by the impugned order, which is the subject matter of challenge in the present appeal.
We have heard parties. Perused record.
It is submitted by the learned AR that the transaction was entered into on 10.04.2008. The consideration was also paid at the same time. It is thus contended that the transaction cannot be brought to tax in assessment year 2017-18. It is submitted that the authorities below are not justified in reckoning the stamp duty valuation for the year 2016, particularly when the possession was also obtained in 2008 and the Occupation Certificate was issued on 16.02.2000. It is next contended that under Section 149(1)(a) of the Act, the notice under Section 148 of the Act could not have been issued more than three years from the end of the relevant assessment year. It is submitted that the
The learned DR has supported the impugned order.
We have considered the circumstances and the submissions made. We find that the appeal has to succeed on both the grounds as set out above. Firstly, there is material on record to indicate that the transaction was entered into on 10.04.2008 in respect of property for which Occupation Certificate was obtained on 16.02.2000. In the year 2008, when the transaction was entered into, the property was about eight years old. The possession of the property was also obtained in 2008 itself and the amount of consideration has been equally paid by the appellant and her husband through cheque at the same time. Thus, no part of the transaction could be said to have taken place during the financial year 2016-17 relevant to assessment year 2017-18.
Secondly, Section 149 of the Act, which prescribes the time limit for issuance of notices under Section 148 & 148A of the Act provides that no notice under Section 148 of the Act shall be issued for the relevant assessment year if (a) three years have elapsed from the end of the relevant assessment year unless the case falls under clause (b). Indisputably, this case cannot be covered under clause (b) of Sub-section (1) of Section 148 of the Act as the income chargeable to tax which according to the AO has escaped assessment is less than Rs. 50 lacs.
Juee Sudhir Gore 10. In that view of the matter, the notice cannot be said to be in compliance of Section 149(1)(a) of the Act. Although this specific ground was raised before the CIT(A), the same has not been addressed to or dealt with.
In that view of the matter, the appeal is allowed. The impugned addition stands deleted. The appeal is disposed of in the aforesaid terms.
Order pronounced in the open court on 02/03/2026.
Sd/- Sd/- (VIKRAM SINGH YADAV) (JUSTICE (RETD.) C.V. BHADANG) ACCOUNTANT MEMBER PRESIDENT Mumbai; Dated : 02/03/2026 SSL