Tarun Mohan Jani Vs ACIT (ITAT Mumbai)
The claim of the assessee is that assessee should be granted the benefit of tolerance limit of 10% as per Section 56(2)(x). If the same is granted the addition does not survive.
In the case of Tarun Mohan Jani vs ACIT, the Income Tax Appellate Tribunal (ITAT) Mumbai ruled in favor of the appellant, granting him relief from an addition of ₹3,92,000 made under Section 56(2)(x) of the Income Tax Act, 1961. The dispute arose over the purchase of an industrial warehouse in Mumbai, where the transaction value was lower than the stamp duty valuation. The Assessing Officer added the difference to the assessee’s income, rejecting the claim that the property’s lower value was due to distress sale conditions and location issues. Although the initial appeal to the CIT(A) was dismissed, ITAT Mumbai accepted the appellant’s argument, supported by precedents, that the difference fell within the 10% tolerance limit as per Section 56(2)(x). The ITAT concluded that when the difference between the market value determined by the Valuation Officer and the actual transaction value is within this 10% margin, no addition should be made to the assessee’s income. The Tribunal directed the deletion of the addition, allowing the appeal in favor of Tarun Mohan Jani.
