SPL Shelters Private Limited Vs DCIT (ITAT Chennai)
Chennai ITAT delivered an important ruling in the cases of SPL Shelters Pvt. Ltd. & Sriprop Properties Pvt. Ltd. for AY 2018-19 wherein it was held that the tolerance limit of 5% introduced in s.56(2)(x) is curative in nature & applicable retrospectively. Consequently, additions made by AO on account of difference between stamp duty value & purchase consideration were deleted, while the appeals of the Revenue stood dismissed.
Dispute arose pursuant to a search in the case of Shri Ram Prasath Reddy, where documents indicated that SPL Shelters Pvt. Ltd. & Sriprop Properties Pvt. Ltd. had acquired immovable properties from M/s Gateway Office Parks Pvt. Ltd. for a consideration allegedly below stamp duty valuation. AO initiated proceedings u/s 153C & made additions u/s 56(2)(x) to the tune of ₹15.79 crores after reducing stamp duty & registration charges borne by the seller from the declared purchase price. Disallowance u/s 40A(2)(b) & interest on TDS were also made.
On appeal, CIT(A) granted partial relief by deleting AO’s adjustment towards stamp duty & registration costs, holding that the consideration recorded in the Sale Deed alone should be reckoned. However, CIT(A) upheld the applicability of s.56(2)(x) observing that the 5% tolerance limit, introduced w.e.f. 01.04.2019, could not apply to AY 2018-19 retrospectively.
