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Facts
The assessee's appeal was against an order for Assessment Year 2017-18. The lower authorities invoked Section 56(2)(x) of the Income Tax Act to add the difference between the actual purchase price and the stamp value of a capital asset as income from "other" sources.
Held
The Tribunal held that the addition was made under Section 56(2)(x) which was inserted by the Finance Act 2017 with effect from 01.04.2017, without any retrospective effect. Since the assessee acquired the asset on 06.06.2016, prior to the effective date of the amendment, the addition was not sustainable.
Key Issues
Whether the provisions of Section 56(2)(x) of the Income Tax Act, introduced w.e.f. 01.04.2017, can be applied to an asset acquired by the assessee on 06.06.2016.
Sections Cited
147, 56(2)(x), 56(2)
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
ORDER This assessee’s appeal for Assessment Year 2017-18 arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2025-26/10758867882(1) dated 29.04.2025, in proceedings u/s 147 of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
It emerges during the course of hearing that both the learned lower authorities have invoked section 56(2)(x) of the Act to add the difference between the assessee’s actual purchase price of Rs.9,00,000/- and stamp value of the relevant capital asset of Rs.19,10,000/-, amounting to Rs.10,10,000/-, as income from “other” sources.
Ish Bhatia 4. That being the case, the Revenue could hardly dispute the clinching fact that the legislature has inserted clause (x) in section 56(2) in the Act vide Finance Act 2017 w.e.f. 01.04.2017 without any retrospective effect as per the relevant Explanatory Memorandum’s clause 33.6 thereto. It is reiterated that the assessee had acquired the asset in issue on 06.06.2016 only. The impugned section 56(2)(x) addition is deleted in very term therefore.