RAJESH KUMAR SHARMA,NOIDA vs. ITO 5(2) 2, NOIDA

This assessee’s appeal for Assessment Year 2016-17, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2023-24/1054853837(1) dated 03.08.2023, in proceedings u/s 147 of the Income Tax Act, 1961 (in short “the Act”).

Heard both the parties at length. Case file perused.

Suffice to say, the sole substantive issue between both the parties which arises from the tribunal’s apt adjudication is that of correctness of the learned lower authorities’ action adding an amount of Rs.21,95,375/- representing the difference between actual purchase price of Rs.33,76,625/- and Rajesh Kumar Sharma stamp valuation amounting to Rs.55,72,000/- of the assessee’s residential flat purchased in the relevant previous year, assessed in assessment order dated 21.03.2022 and upheld in the lower appellate discussion.

That being the case, we notice that the learned CIT(A)/NFAC has itself extracted the corresponding sale/purchase deed executed between the parties in the relevant previous year involving “lease rights” than the prescribed capital asset(s) of “land and building” as per section 56(2)(vii) Explanation (d)(i) of the Act. The Revenue could hardly dispute that the impugned statutory provision is pari materia to section 50C of the Act applicable in case of capital gain arising from sale/transfer of the specified capital asset “land and building” only. Faced with this situation, learned departmental representative quotes Vidarbha Veneere Industries Ltd. vs. ITO (2025) 174 taxmann.com 223 (Bom.) that the impugned statutory provision also could be invoked in sale/transfer of lease rights as well. The assessee on the other hand places strong reliance on V.S. Chandrashekar vs. ACIT (2021) 129 taxmann.com 273 (Kar.) deciding the very issue in his favour. No guidance has admittedly come from hon’ble jurisdictional high court at Delhi. We therefore quote CIT Vs. Vegetable Products Ltd. (1973) 88 ITR 192 (SC) that in such an instance of conflicting hon’ble non-jurisdictional high courts’ Rajesh Kumar Sharma decisions, a view which favours the assessee ought to be adopted and delete the impugned section 56(2)(vii) addition herein amounting to Rs.21,95,375/- in very terms. Ordered accordingly.

All other pleadings between the parties on merits stand rendered academic.