Shyamsunder Bansidhar Reengusia Vs ITO (ITAT Mumbai)
One Flat, Two Owners, One Inflated Addition: ITAT Sends Section 56(2)(x) Valuation to DVO
Summary: In Shyamsunder Bansidhar Reengusia Vs Income Tax Officer, the Mumbai Bench of the Income Tax Appellate Tribunal considered an addition arising from the difference between the agreed consideration and stamp-duty value of a jointly purchased residential property for AY 2018-19. The assessee and his wife jointly purchased a flat in Chembur, Mumbai, for Rs. 60,00,002 on 14.08.2017, whereas the stamp-duty value determined by the registering authority was Rs. 94,81,500. The difference of Rs. 34,81,500 was treated as taxable under Section 56(2)(x)(b) of the Income-tax Act, 1961.
The assessment was reopened under Section 147 and notice was issued under Section 148. The assessment was passed under Section 147 read with Section 144B. The Assessing Officer rejected the assessee’s explanation that the property was worth less than the stamp-duty valuation because the builder had not obtained an Occupation Certificate and basic amenities were unavailable. The AO treated the entire difference of Rs. 34,81,500 as income from other sources.
Before the appellate authorities, the assessee specifically disputed the stamp-duty valuation and requested reference to the Departmental Valuation Officer. The assessee contended that the statutory safeguard under Section 50C, including Section 50C(2), required the valuation dispute to be considered through the prescribed valuation mechanism. Reliance was placed on Sunil Kumar Agarwal Vs CIT, S. Muthuraja Vs CIT, Amarshiv Construction Pvt. Ltd. Vs DCIT and Hari Om Garg Vs CIT.
