INCOME TAX ACT, 1961

Section 56(2)(vii)(b)(ii)

Income from undisclosed source - Addition under section 56(2)(vii)(b) - Difference between consideration paid for purchase of property and SRO value as on date of agreement - Applicability of clause (ii) of section 56(2)(vii)(b) during concerned assessment year 2013-14

Assessee purchased certain property. AO invoking section 56(2)(vii)(b)(ii), taxed difference between consideration paid for purchase of property and SRO value as on date of agreement. Held: From assessment year 2014-15 sub-clause (ii) has been introduced to section 56(2)(vii)(b) so as to enable AO to tax differential consideration if consideration paid is less than stamp duty value. For the period from 1-10-2009 to 1-4-2014, i.e., upto assessment year 2014-15, provisions applicable was that where any individual or Hindu Undivided Family received any immovable property without consideration stamp duty value of such property was required to be considered as consideration paid and said amount was to be taxed under section 56(2)(vii)(b). In the instant case assessee had paid consideration and there was no evidence with AO to show that assessee had paid excess consideration over and above sale deed. Therefore, AO could not be permitted to invoke section 56(2)(vii)(b)(ii) in the absence of sub-clause (ii) as on the date of agreement and as per law applicable as on date of agreement no addition could be made.

Followed:M.Siva Parvathi & Ors. (2010) 129 TTJ 463 (Visakhapatnam) : 2010 TaxPub(DT) 903 (Visakhapatnam-Trib).

REFERRED : D.S.N. Malleswara Rao ITA No. 538/Viz/2018, dated 30-8-2019 : 2019 TaxPub(DT) 5895 (Visakhapatnam-Trib).

FAVOUR : In assessee's favour.

A.Y. : 2014-15

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