Guhagar Taluka Kunbi Sahakari Patpedhi Ltd Vs ITO (ITAT Mumbai)
In the case of Guhagar Taluka Kunbi Sahakari Patpedhi Ltd vs. Income Tax Officer (ITO), Mumbai, the Income Tax Appellate Tribunal (ITAT) addressed an appeal against the order of the Commissioner of Income Tax (Appeals) (CIT(A)) for the Assessment Year 2018-19. The appellant challenged the addition made by the Assessing Officer (AO) under Section 56(2)(x)(b)(B) of the Income Tax Act, 1961.
The AO noted that the appellant had purchased an immovable property for a consideration of INR 7,20,000, while the stamp duty valuation was INR 67,39,506. Consequently, the AO made an addition of INR 60,19,506, invoking Section 56(2)(x)(b)(B) of the Act, as the purchase consideration was below the stamp duty valuation.
In the appeal before the CIT(A), the appellant contended that the property was initially agreed to be acquired in 2005, and the registration of the sale deed occurred in 2017. The appellant provided documentary evidence, including an agreement from 2005 and bank statements showing payments towards the property. However, the CIT(A) sustained the addition, stating that the condition of the second proviso to Section 56(2)(x)(b)(B) was not satisfied as the consideration was not paid through banking channels.
Upon review, the ITAT found that the CIT(A)’s reasoning was incorrect. The bank statements provided by the appellant showed that the entire consideration of INR 7,20,000 was paid through banking channels, contrary to the CIT(A)’s assertion. Since both conditions of the first and second provisos to Section 56(2)(x)(b)(B) were satisfied, the ITAT concluded that the addition made by the AO could not be sustained.
