Awadhnarayan Bhagwanta Singh v. ITO

Case snapshot

Sections / provisions: 56(2)(vii)(b)

Questions before the Court / Tribunal

• Allotment/agreement date for stamp-value comparison: The reported ruling concerns whether the allotment/agreement date, rather than later registration date, can control the stamp-value test where consideration moved through banking channels before registration.

Material facts and background

The brief facts of the case are that the assessee filed his return of income,

which was processed under section 143(1) of the Act. The case was subsequently selected for limited scrutiny through CASS. During the assessment proceedings, it was noticed that the assessee had purchased a property for Rs.1,10,00,000/-, whereas the stamp duty valuation of the same property, as on 30/03/2017, was Rs.1,69,87,000/-. The Ld. AO, therefore, added the differential amount of Rs.59,87,000/-, being the difference between the stated consideration and the value adopted by the stamp valuation authority, by invoking the provisions of section 56(2)(vii)(b) of the Act. The assessee, being aggrieved, preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) partly allowed the appeal. In respect of the applicability of section 115BBE, the Ld. CIT(A) granted relief to the assessee; however, the addition of Rs.59,87,000/- made under section 56(2)(vii) was upheld. The assessee has now filed the present appeal before us. 3.

The Ld. AR appeared and filed a paper book containing pages 1 to 215,

which is taken on record. The Ld. AR submitted that the assessee was allotted the property vide allotment letter dated 29/11/2012 issued by M/s Shah Housecon Pvt. Ltd. in respect of Flat No. B-3102 (APB page 69). The assessee had made advance payment of Rs.5,00,000/- through the banking channel on 18/08/2011, drawn on Canara Bank, Matunga Branch. A copy of the receipt is placed at APB page-66, and the corresponding bank statements reflecting the payments to the promoter are annexed at APB pages 10 to 13. The Ld. AR submitted that all relevant documents in support of the assessee’s claim were furnished before the Ld. AO vide letter dated 14/11/2019. The Ld. AO

3 ITA No.6045/Mum/2025 Awadhnarayan Bhagwanta Singh

accepted the proposition that the valuation of the property should be considered with reference to F.Y. 2012-13, relevant to A.Y. 2013-14. However, in the absence of a contemporaneous valuation report, the Ld. AO proceeded to adopt the stamp duty valuation pertaining to the impugned assessment year. 4.

In the first appellate proceedings, the Ld. CIT(A) observed that the assessee

Appellant / assessee submissions

The Ld. AR appeared and filed a paper book containing pages 1 to 215,

which is taken on record. The Ld. AR submitted that the assessee was allotted the property vide allotment letter dated 29/11/2012 issued by M/s Shah Housecon Pvt. Ltd. in respect of Flat No. B-3102 (APB page 69). The assessee had made advance payment of Rs.5,00,000/- through the banking channel on 18/08/2011, drawn on Canara Bank, Matunga Branch. A copy of the receipt is placed at APB page-66, and the corresponding bank statements reflecting the payments to the promoter are annexed at APB pages 10 to 13. The Ld. AR submitted that all relevant documents in support of the assessee’s claim were furnished before the Ld. AO vide letter dated 14/11/2019. The Ld. AO

had not furnished any documentary evidence in support of his claim. The Ld. AR, however, drew our attention to APB pages 80 to 156, demonstrating that all such documents were, in fact, submitted before the Ld. CIT(A). Despite the availability of these documents, the Ld. CIT(A) failed to consider or verify them and proceeded to uphold the addition. 5.

Revenue / respondent submissions

The Ld. DR argued and relied on the order of the revenue authorities.

Court / Tribunal analysis and reasoning

In the present case, the assessee entered into an agreement, and the allotment letter was duly issued by the promoter. The payment was made through banking channels. Therefore, the stamp duty valuation of the property should be taken as on the date of allotment, i.e., F.Y. 2012-13. Upon perusal of the valuation report, it is noted that the valuation of the property, as determined by the registered valuer, is Rs.1,10,00,000/- (APB page-117). There is no discrepancy in the purchase value declared by the assessee. Consequently, the addition of Rs.59,87,000/-, representing the difference between the set forth value and the stamp duty value, cannot be sustained in the impugned assessment year. Accordingly, the said addition is quashed. Further, we remit the matter to the file of the Ld. AO with a direction to consider the stamp duty valuation as per the financial year of the agreement, i.e., F.Y. 2012-13, and to recompute the assessment accordingly. Needless to say, the assessee should get reasonable opportunity of hearing in set aside assessment proceeding. The impugned appeal order is set aside, and the matter is remanded to the Ld. AO for this limited purpose. 7.

Operative decision and relief

which was processed under section 143(1) of the Act. The case was subsequently selected for limited scrutiny through CASS. During the assessment proceedings, it was noticed that the assessee had purchased a property for Rs.1,10,00,000/-, whereas the stamp duty valuation of the same property, as on 30/03/2017, was Rs.1,69,87,000/-. The Ld. AO, therefore, added the differential amount of Rs.59,87,000/-, being the difference between the stated consideration and the value adopted by the stamp valuation authority, by invoking the provisions of section 56(2)(vii)(b) of the Act. The assessee, being aggrieved, preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) partly allowed the appeal. In respect of the applicability of section 115BBE, the Ld. CIT(A) granted relief to the assessee; however, the addition of Rs.59,87,000/- made under section 56(2)(vii) was upheld. The assessee has now filed the present appeal before us. 3.

In the present case, the assessee entered into an agreement, and the allotment letter was duly issued by the promoter. The payment was made through banking channels. Therefore, the stamp duty valuation of the property should be taken as on the date of allotment, i.e., F.Y. 2012-13. Upon perusal of the valuation report, it is noted that the valuation of the property, as determined by the registered valuer, is Rs.1,10,00,000/- (APB page-117). There is no discrepancy in the purchase value declared by the assessee. Consequently, the addition of Rs.59,87,000/-, representing the difference between the set forth value and the stamp duty value, cannot be sustained in the impugned assessment year. Accordingly, the said addition is quashed. Further, we remit the matter to the file of the Ld. AO with a direction to consider the stamp duty valuation as per the financial year of the agreement, i.e., F.Y. 2012-13, and to recompute the assessment accordingly. Needless to say, the assessee should get reasonable opportunity of hearing in set aside assessment proceeding. The impugned appeal order is set aside, and the matter is remanded to the Ld. AO for this limited purpose. 7.

Authorities and precedents appearing in the judgment

• Bhagwanta vs Singh

This list is machine-assisted from the judgment text and is not a substitute for checking the full citation chain in the PDF.

Ratio and legal principle

The decision turns on Allotment/agreement date for stamp-value comparison. The operative result is classified as Partly Allowed. Read the rule only with the statutory version, factual findings and precedent chain recorded in the full judgment.

Why this judgment matters

The case is relevant to taxpayers, advisers and litigators dealing with Allotment/agreement date for stamp-value comparison. Its practical value lies in the interaction between the statutory text, the evidentiary record and the procedural route followed in this case.

Practitioner action points

• Use the judgment as a fact-specific precedent: match the statutory version, assessment period, procedural stage and evidentiary record before relying on the result.
• Check whether a later High Court/Supreme Court order has affirmed, reversed, distinguished or rendered the decision academic.
• For litigation, attach the full judgment/order to the working paper and cite the paragraph/page supporting the proposition rather than relying on a headnote alone.

Full judgment and source trail

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