ITO Vs Vivek Omprakash Abrol (ITAT Mumbai)
₹10.55 Crore Stamp-Value Addition Reduced to ₹21.63 Lakh; ₹3.65 Crore Penalty Deleted
Summary: A difference between the stamp duty value and the stated purchase price of land may produce a taxable addition under a deeming provision. Does that difference, without more, prove concealment of income or furnishing inaccurate particulars for section 271(1)(c) penalty? The Mumbai ITAT has answered no on the facts of this case, upholding cancellation of a ₹3,65,31,395 penalty.
The ruling arose from an unusual assessment history. The original addition of ₹10,55,57,660 was substantially reduced by the Assessing Officer himself after receiving a Departmental Valuation Officer’s report. The penalty was nevertheless levied with reference to the original assessment.
From stamp value to DVO value
Vivek Abrol purchased four agricultural land parcels under agreements showing total consideration of ₹5,74,38,100. Their aggregate value according to the stamp duty authorities was ₹16,29,95,760. The Assessing Officer proposed to tax the difference of ₹10,55,57,660 as income from other sources under section 56(2)(vii)(b)(ii).
The Assessing Officer referred the properties to the DVO, but the report had not arrived when the assessment was completed on 27 December 2018. He therefore made the addition using the stamp duty figures.
