Kruti Rajubhai Manvar Vs ITO (ITAT Rajkot)
The Rajkot Bench of the Income Tax Appellate Tribunal (ITAT) heard the assessee’s appeal against the order passed by the National Faceless Appeal Centre (NFAC) under Section 250 of the Income-tax Act, 1961 for Assessment Year 2020-21, arising from an assessment made under Sections 147 read with 144.
The assessee had filed the return declaring total income of ₹7,15,000. Based on information available with the Department, reassessment proceedings under Section 147 were initiated after it was noticed that the assessee had purchased an immovable property. The registered sale deed recorded a sale consideration of ₹1,41,00,000, while the stamp duty valuation adopted by the Stamp Valuation Authority was ₹1,55,28,571, resulting in a difference of ₹14,28,571.
During the reassessment proceedings, the assessee explained that he had acquired only a 25% undivided share in the property jointly with other co-owners. His investment amounted to ₹35,25,000, while the corresponding stamp duty valuation of his share was ₹38,82,142. The assessee also explained the sources of investment, stating that the amount had been funded through ₹30,00,000 received from his father, ₹1,70,000 from his HUF, ₹2,50,000 from his grandmother and the balance from his own funds.
The Assessing Officer observed that the overall difference between the sale consideration and the stamp duty valuation of the property was ₹14,28,571. Considering the assessee’s 25% share, the Assessing Officer computed the proportionate difference at ₹3,57,142 and treated it as income under Section 56(2)(x) of the Act.
