Vinit Ramnath Parkar Vs ITO (ITAT Mumbai)
Section 56(2)(x) Addition Partly Sustained as Allotment Letter Held Not Agreement for Sale: ITAT Mumbai
The assessee appealed against the order dated 29.10.2025 for AY 2020-21 challenging an addition of ₹45,51,307 under Section 56(2)(x)(b)(B) of the Income-tax Act. The assessee, a non-resident, was subjected to reassessment proceedings under Sections 148A and 148 based on information received from the Insight Portal. During the assessment, the Assessing Officer noted that the assessee had registered an agreement for purchase of an immovable property. While the assessee claimed a purchase cost of ₹56,42,500 and furnished payment details of ₹44,87,248, the Assessing Officer adopted the stamp duty valuation of ₹1,01,93,807 and, after directions of the DRP, made an addition of ₹45,51,307 under Section 56(2)(x)(b)(B), being the difference between the stamp duty value and the actual purchase consideration.
Before the Tribunal, the assessee submitted that the property was jointly owned with his father and that a letter of allotment dated 29.10.2010 fixed the consideration, whereas registration took place in May 2019. Relying on the first proviso to Section 56(2)(x), the assessee contended that where the date of agreement and the date of registration are different, the stamp duty value as on the date of the agreement should be adopted. It was also argued that the stamp duty value as on 29.10.2010 was ₹33,27,000 and that ready reckoner rates may not reflect the actual value of flats. Alternatively, the assessee submitted that any addition should be restricted to his beneficial ownership share in the jointly owned property. The Revenue contended that an allotment letter could not be treated as an agreement for the purposes of Section 56(2)(x)(b)(B) and supported adoption of the stamp duty value prevailing on the date of registration.
