BHOPAL SINGH CHAUDHARY,DEHRADUN vs. ITO SRINAGAR, SRINAGAR GARHWAL

ITA 236/DDN/2025Status: HeardITAT Dehradun09 March 2026AY 2017-18Bench: SHRI MAHAVIR SINGH (Vice President), SHRI MANISH AGARWAL (Accountant Member)12 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition under Section 56(2) should be restricted to the difference between the reduced arbitral value and the purchase price, as it falls within the 10% tolerance limit of Section 50C. The Tribunal also noted that the assessee's offering of income was to buy peace of mind, not an admission of the original higher valuation. The interest on bank FDRs was to be taxed on a receipt basis, not accrual.

What were the facts?

The assessee purchased property for INR 15,78,401, but the stamp valuation authorities valued it at INR 29,73,000. The case was reopened under Section 147, and the assessee offered the differential amount as income under Section 56(2) in response to the Section 148 notice. An Arbitral Tribunal later reduced the property's value to INR 17,14,335.

What were the issues?

Whether the addition under Section 56(2) for property valuation difference should be restricted based on a subsequent arbitral award and the tolerance limit under Section 50C, and whether interest income should be taxed on an accrual or receipt basis.

Which sections of the Income-tax Act were involved?

Section 56(2),Section 147,Section 148,Section 50C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DEHRADUN CIRCUIT BENCH: DEHRADUN

Before: SHRI MAHAVIR SINGH & SHRI MANISH AGARWAL

For Appellant: Shri K.K. Juneja, Adv
For Respondent: Ms. Poonam Sharma, CIT DR
Hearing: 09.03.2026Pronounced: 09.03.2026

PER MANISH AGARWAL, AM : The captioned appeals are filed by assessee against the order, both dated 22.09.2025 passed by Ld. Commissioner of Income Tax (A), National Faceless Appeal Centre (“NFAC”), Delhi [“Ld. CIT(A)”] u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of assessment order, both dated 02.09.2021 passed u/s 147 of the Act pertaining to Assessment Year 2017-18 and penalty u/s 270A of the Act respectively.

2.

Since both the appeals are related to one assessee and against the additions made in reassessment order and consequent levy of penalty u/s 271A of the Act, therefore, they are taken together and ITA No. 236/DDN/2025 & 05/DDN/2026 decided

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 56(2)

All 166 judgments and leading authorities on Section 56(2) →

Recent GST High Court judgments

Search GST case law →