Naresh Kumar Morya Vs ITO (ITAT Delhi)
The Delhi Bench of the ITAT allowed the appeal of Naresh Kumar Morya for AY 2017-18 and deleted the addition of ₹3.33 lakh made under section 56(2)(vii)(b) on account of alleged undervaluation of immovable property.
The assessee had purchased a residential flat for a consideration of ₹49 lakh, whereas the stamp duty value was ₹52.33 lakh. The Assessing Officer treated the differential amount as income from other sources and made an addition, which was confirmed by the NFAC/CIT(A).
The Tribunal held that the difference between the actual consideration and the stamp duty value was within the permissible 10% tolerance band. Relying on the principle that provisions of sections 50C, 56(2)(vii)(b) and 56(2)(x) are pari materia, and following the Mumbai ITAT decision in Maria Fernandes Cheryl v. ITO, the Bench observed that the beneficial tolerance provision applies retrospectively from the date of introduction of the deeming provisions.
Since the variation in the present case was less than 10%, the deeming fiction could not be invoked. Accordingly, the addition was held to be unsustainable in law and was deleted.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. The appeal in ITA No.2292/Del/2025 for AY 2017-18, arise out of the order of the ld National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 25.02.2025 against the order of assessment passed u/s 147 r.w.s. 144 r.w.s. 144B of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 09.05.2023 by the Assessing Officer, Assessment Unit, Income Tax Department (hereinafter referred to as ‘ld. AO’).
