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Facts
The assessee jointly purchased a flat with her husband for Rs. 4.5 crore. The allotment letter was dated 21.04.2016, and the agreement for sale was registered on 23.08.2017. The AO considered the stamp duty valuation as on the date of registration (Rs. 4,55,55,939) and added 50% of the difference (Rs. 2,70,970) to the assessee's income under section 56(2)(x) of the Act.
Held
The Tribunal held that the stamp duty valuation as on the date of allotment, which was 21.04.2016 (Rs. 4,19,98,028), should be considered as the basis for valuation, as the consideration was paid through banking channels and the allotment occurred in an earlier year than the agreement for sale.
Key Issues
Whether the stamp duty valuation as on the date of allotment or the date of agreement for sale is to be considered for the purpose of computing income under section 56(2)(x)/56(2)(vii)(b) of the Act.
Sections Cited
56(2)(x), 56(2)(vii)(b)
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Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: SHRI ANIKESH BANERJEE & SHRI PRABHASH SHANKAR
Sarayu Krishna Kamat vs DCIT Circle 22(1), Mumbai 1061 Om Apartment, Dr M B Piramal Chambers Mumbai- Raut Road, Shivaji Park Dadar 400012 Mumbai-400028 PAN : AAHPK4713D APPELLANT RESPONDENT Assessee by : Shri Sampat Nagap Respondent by : Shri Swapnil Choudhary (SR AR) Date of hearing : 24/12/2026 Date of pronouncement : 07/01/2026 O R D E R Per: Anikesh Banerjee (JM): The instant appeal of the assessee preferred against the order of the NFAC, Delhi [for brevity, ‘Ld.CIT(A)’] order passed under section 250 of the Income-tax Act, 1961 (for brevity, ‘the Act) for the Assessment Year 2018-19, date of order 26/08/2025. The impugned order emanated from the order of the National e- Assessment Centre, Delhi (for brevity, ‘the Ld.AO’) order passed u/s 143(3) r.w.s. 143(3A) and 143(3B) of the Act, date of order 10/04/2021.
Sarayu Krishna Kamat 2. The brief facts of the case are that the assessee individual capacity filed the return. During the impugned assessment year assessee with the joint ownership with her husband booked flat for A.Y. 2016-17 through a letter of allotment dated 21.04.2016 issued by the Builder, “M/s. Tridhhaatu Construction Pvt. Ltd”. The agreement of sale was duly registered on 23.08.2017 and the stamp duty valuation of the property was taken by the Ld. AO for F.Y. 2017-18 related AY 2018-19. The assessee has booked the flat by paying the account pay cheque and transaction made through banking channel. The assessee purchased the said flat with joint ownership with amount of Rs.4.5 crore. But during the impugned assessment year the stamp duty valuation of the property was Rs.4,55,55,939/-. So the difference amount of Rs.5,55,939/- was treated as the contravention of section 56(2) of the Act. Considering the 50% share of the assessee, half of the amount of Rs.5,55,939/- which comes to Rs.2,70,970/- was added back with the total income of the assessee. The aggrieved assessee filed an appeal before the Ld. CIT(A). The assessee has taken plea that the said property was duly allotted on assessment year 2017-18 and the ready reckoner value of the said property was Rs.4,19,98,028/- and the Ld. AO should adopt the valuation in the year when the flat was allotted. So, the valuation adopted for AY 2018-19 is against the statute. Accordingly, the adoption of the ready reckoner value for the F.Y. 2016-17 related to A.Y. 2017-18 is the correct implication of the Act. The Ld. AR further stated that difference of stamp duty value of and the set forth value is lesser than the 10% so addition is illegal U/s 56(2) of the Act. But without considering the same the Ld. CIT(A) rejected the appeal of the assessee. Being aggrieved assessee filed an appeal before us.
Sarayu Krishna Kamat 3. The Ld. AR argued and filed a paper book which is containing page 1 to 187 which is placed on record. The Ld. AR contended that the assessee had allotted the flat by an allotment letter dated 21.04.2016 related to F.Y. 2016-17. The copy of the allotment letter is annexed in APB page 71 to 73. He further stated that the details calculation of ready reckoner value amount to Rs.4,19,98,028/- for 2016 was duly submitted before the Ld. AO and copy of the letter is annexed in APB page 129 to 130. He further stated that the agreement of sale was duly executed in impugned assessment year but the assessee had made the entire payment through banking channel during allotement of the said flat. So, the value of the falt is applicable only related to the assessment year 2017-18.
He further argued that entire issue was duly submitted before the revenue authorities. The Ld. AO has taken note the assessee’s submission in the impugned assessment order. The relevant paragraph of the assessment order paragraph-8 is reproduced as below: “8. The reply of the assessee has been considered and found devoid of merit. It is seen from the Letter of the builder, Tridhaatu, allotting provisionally the 3 BHK flat to the assessee for a aggregate provisional consideration of Rs. 4,14,00,000/- on 21/04/2016 and also from the bank account statement of the assessee that she has paid various amounts to the builder on different dates in 2015-16 and 2016-17, viz. Rs. 40,00,000/- on 19/02/2016, Rs. 49,00,000/- on 02/03/2016, Rs. 48,50,000/- on 31/03/2016, Rs. 6,52,500/- on 26/04/2016 etc. The Agreement to Sale was registered on 23/08/2017 wherein at page no.8 shows that the Builder had already received a sum of Rs. 1,60,00,000/- from the assessee before the execution of the agreement, and the schedule for later payments was also specified therein. Therefore, it is clear that the assessee's case is squarely covered by the 1st proviso to section 56(2)(x) of the Act the stamp duty value applicable in her case would be as on the date of agreement, which is 23/08/2017, which makes her liable to be covered under the provisions of section 56(2)(x). However, the assessee is trying to read into the 2nd proviso to section 56(2)(x) and going by her payment history, to claim that in effect the date of agreement is the date of allotment, which is 21/04/2016, whereby the value of her intended property was only Rs. 4,19,98,028/-, which she is purchasing for a higher value of Rs. 4,50,00,000/-. The Sarayu Krishna Kamat contention of the assessee cannot beaccepted, as the letter of offer/allotment cannot be construed to mean the agreement to sale. The 1st proviso is clear that the stamp duty value has to be that as on the date of agreement and not on the date of allotment. Accordingly, the assessee is squarely struck by the provisions of section 56(2)(x) for an amount of 2,70,970/-. In view of the above mentioned factual and legal position, an amount of Rs.2,70,970/- 50% of Rs. 5,55,939/- is deemed to be income of the assessee as per provisions under section 56(2)(x) of the I.T. Act, 1961. Accordingly, addition of Rs.2,70,970/- made to the total income of the assessee.”
The Ld. DR argued and stands in favor of the orders of the revenue authorities.
We have heard the rival submissions and examined the documents available on record. A plain reading of the proviso to Section 56(2)(vii)(b) of the Act reveals the following: “56(2)(vii) ………………………… (b) Any immovable property,— (i) Without consideration, if the stamp duty value exceeds fifty thousand rupees, the stamp duty value of such property shall be considered. (ii) If acquired for consideration that is less than the stamp duty value by an amount exceeding fifty thousand rupees, the portion of the stamp duty value exceeding such consideration shall be considered. Provided that where the date of the agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value as on the date of the agreement may be taken for the purposes of this sub-clause: Provided further that this proviso shall apply only if the consideration, or part thereof, has been paid by any mode other than cash on or before the date of the agreement for the transfer of such immovable property.” (Emphasis supplied)
Sarayu Krishna Kamat In the present case, the assessee entered into an agreement for purchase of the property, pursuant to which an allotment letter was duly issued by the promoter. The consideration was paid through proper banking channels. Accordingly, the stamp-duty valuation of the property is required to be adopted as on the date of allotment, i.e., Financial Year 2016-17. On perusal of the ready- reckoner value applicable for F.Y. 2016-17, it is observed that the stamp-duty valuation of the property was Rs.4,19,98,028/-, whereas the actual purchase consideration paid by the assessee was Rs.4,50,00,000/-, which is significantly higher than the ready-reckoner value. Consequently, the addition of Rs.2,70,970/- being 50% of Rs.5,55,939/- representing the difference between the stated consideration and the stamp-duty valuation, is unsustainable in the impugned assessment year. It is an undisputed fact that the assessee purchased the flat jointly with her husband for a total consideration of Rs.4,50,00,000/-. The stamp-duty valuation of the property in the year of registration was Rs.4,55,55,939/-. However, the documentary evidence placed on record clearly establishes that the assessee had booked the flat during F.Y. 2016-17 and the allotment letter was duly issued during the said financial year. The assessee has rightly adopted the stamp- duty/ready-reckoner value applicable in F.Y. 2016-17, wherein the valuation of the property was Rs.4.19 crore, which is lower than the actual cost of acquisition. In view of the provisions of section 56(2)(vii)(b) of the Act, where the consideration has been paid through banking channels and the allotment has taken place in an earlier year, the stamp-duty valuation as on the date of allotment alone is relevant. Therefore, the observations and conclusions drawn by the Ld. AO as well as the Ld. CIT(A) are contrary to the statutory provisions of