Tamal Kundu Vs ITO (ITAT Kolkata)
Unregistered Agreement vs. Sale Deed: Taxation Year; Unregistered Agreement in One Fiscal Year, Sale Deed in Another: When is Property Gain Taxed?; ITAT: Sale Transfer Incomplete Without Registered Deed; Directs AO to Consider Circle Rate on Agreement Date for Tax Calculation
Income Tax Appellate Tribunal (ITAT) Kolkata has recently addressed a crucial question regarding the year of taxation for immovable property acquired through an unregistered agreement to sell in one financial year and a registered sale deed in a subsequent year. The case of Tamal Kundu vs. Income Tax Officer (ITO) delves into the interpretation of “transfer” under the Income Tax Act, 1961, particularly concerning Section 56(2)(x) and its interplay with the Transfer of Property Act.
The Case at Hand
The dispute arose when Tamal Kundu purchased a rice mill via a registered sale deed on March 21, 2018, for Rs. 86 lakhs. However, the Assessing Officer (AO) noted that the stamp duty value of the property was significantly higher, leading to an addition of Rs. 1,05,84,328/- to Kundu’s income under Section 56(2)(x) for Assessment Year (AY) 2018-19. This section taxes the difference between the stamp duty value and the consideration paid if it exceeds certain thresholds.
