Chhaya Divyesh Patel Vs DCIT (ITAT Ahmedabad)
The ITAT Ahmedabad allowed the assessee’s appeal and deleted the addition made under Section 56(2)(x)(b)(B) of the Income Tax Act after holding that the Assessing Officer and the Dispute Resolution Panel failed to properly consider the facts and supporting evidence relating to the property transaction. The assessee contended that the purchase consideration had been fixed under an earlier agreement executed in 2009, substantial payments had already been made through banking channels, and the delay in registration until 2019 was due to prolonged litigation over the property and other genuine circumstances. Although stamp duty was paid on the Jantri value prevailing on the registration date in compliance with State law, the actual consideration remained as agreed earlier. The Tribunal found that documentary evidence regarding prior agreements and cheque payments had not been duly considered by the lower authorities. Accordingly, it held that invoking Section 56(2)(x)(b)(B) and making the addition based on the stamp duty value was unjustified, and allowed the appeal.
Core Issue: The principal issue before the Tribunal was whether an addition of Rs. 2,25,99,980 under section 56(2)(x)(b)(B) could be sustained by adopting the stamp duty value prevailing on the date of registration of the property, despite the fact that the transaction was governed by an earlier agreement, possession had already been handed over, and substantial consideration had been paid through banking channels before registration.
