Case Law Details
Shyamkumar Madhavdas Chugh Vs ACIT (ITAT Delhi)
The order from the Income Tax Appellate Tribunal (ITAT) Delhi in the case of Shyamkumar Madhavdas Chugh vs. ACIT represents a significant interpretation of the provisions related to the taxation of immovable property transactions under Section 56(2)(vii)(b) of the Income Tax Act, 1961. This case highlights the application of the proviso to Section 56(2)(vii)(b) concerning the determination of the stamp duty value for the purpose of taxing the consideration paid for the purchase of immovable property when there is a discrepancy between the date of agreement and the date of registration of the property.
The key issue in this appeal was whether the stamp duty value on the date of the agreement (21.06.2010) or the stamp duty value on the date of registration (13.08.2013) should be considered for the purpose of computing the income from other sources under Section 56(2)(vii)(b)(ii). The assessee argued for the consideration of the stamp duty value as on the date of the agreement, supported by the payment made through banking channels before the date of agreement, as per the proviso to Section 56(2)(vii)(b)(ii).
The ITAT Delhi allowed the appeal in favor of the assessee, holding that the stamp duty value on the date of the agreement should be considered for the purpose of Section 56(2)(vii)(b). The Tribunal clarified that the language “may be taken” in the proviso to Section 56(2)(vii)(b)(ii) allows for the consideration of the stamp duty value on the date of the agreement when the conditions specified in the provisos are met, i.e., when part of the consideration is paid by any mode other than cash on or before the date of the agreement.
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