SURESHKUMAR LAXMICHAND JAIN,MUMBAI vs. THE INCOME TAX OFFICER WARD 22(3)(1), MUMBAI

This appeal is filed by the assessee against the appellate order passed by the National faceless appeal Centre Delhi (the learned CIT – A) for assessment year 2018 – 19 dated 27/12/2023 wherein the appeal filed by the assessee against the assessment order passed under section 143 (3) of the income tax act, 1961 dated 16/4/2021 was dismissed. Therefore the assessee is in appeal before us.

The brief facts of the case shows that assessee is an individual who filed his return of income on 5/7/2018 declaring total income of ₹ 558,410/–. The case was selected for scrutiny with specific reason about information of tax evasion. Notice under section 143 (2) was issued on 28/9/2019 and further notice under section 142 (1) was also issued. 3. As per the information of the Department the assessee has made transaction for purchasing of flat amounting to ₹ 90 lakhs and has paid the stem duty value amounting to ₹ 9,748,000 and therefore the difference of ₹ 748,000 was established in transaction amount and stem duty value. Therefore the differential amount was required to be added under section 56 (2) (x) of the act. In the submission before the AO, the assessee has accepted the above difference and therefore the assessment order under section 143 (3) of the act was passed determining the total income of the assessee at ₹ 1,306,410. 4. The aggrieved assessee preferred an appeal before the learned CIT – A wherein it was stated that the differences within 10% of the tolerance range and therefore those such amendment is made under section with effect from 1/4/2021 but it applies retrospectively. The learned CIT – A the same and confirmed the addition. 5. Therefore the appeal is made on this issue. We have carefully considered the rival contention and perused the orders of the learned lower authorities. Undisputedly in this case the difference is only of ₹ 748,000 on the transaction value of ₹ 90 lakhs. Therefore the above difference. In the 10% of the tolerance limit. Whether such tolerance limit applies to the assessment year 2018 – 19 or though it is made with effect from 1/4/2021. The assessee has submitted several judicial precedents wherein it has been held that such tolerance limit applies with retrospective effect. Therefore respectfully following the decision of the coordinate bench we find that as the difference between the stamp duty value and the transaction value is less than 10% of the transaction value, the addition under section 56 (2) (x) cannot be made in the hence of the assessee. Therefore the learned AO is directed to delete the addition. Accordingly we allow the appeal of the assessee reversing the orders of the learned lower authorities. 6. In the result appeal of the assessee is allowed.