The stamp value rose between booking and registration and the AO added the difference under 43CA. Is that right?
Not where sub-sections (3) and (4) of s.43CA are satisfied. The Pune Tribunal deleted the entire addition because the booking dates preceded registration, the agreement values at booking exceeded the stamp duty values then prevailing, and part of the consideration had come through banking channels, so the agreement-date value governed.
Decided by the ITAT (ITAT Pune (R.K. Panda, Vice President and Astha Chandra, Judicial Member), ITA No. 2424/PUN/2024) on 2025-02-20, reported as [2025] 172 taxmann.com 194 / [2025] 211 ITD 658 (Pune)(Trib.); IT Appeal No. 2424 (Pune) of 2024, assessment year 2016-17. It bears on section 43CA, section 43CA(3), section 43CA(4) of the Income Tax Act 1961, in Capital Gains matters.
This is the developer's answer to the routine s.43CA addition on flat sales, where the officer compares the agreement price with the stamp duty value on the registration date and treats the gap as suppressed consideration. The Tribunal also refused to let the addition stand merely because the auditor had flagged a difference at registration, which is how many of these cases are picked up in the first place. Here the entire addition of Rs.38,69,867 on 12 flats went.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee, a partnership firm of builders and developers following the percentage completion method, filed its return for assessment year 2016-17 on 15 October 2016 declaring income of Rs. 4,59,330. In scrutiny the Assessing Officer found that of 50 units held as stock-in-trade and possessed during the year, 12 flats had been sold for Rs. 85,37,500 against a market (government) value of Rs. 1,24,07,367, a difference of Rs. 38,69,867 which the auditor had flagged in column 17 of the audit report. The assessee's answer, reproduced in the assessment order, was a table of the 12 flats showing bookings between September 2009 and March 2011 and agreements between June 2011 and March 2016, and that the flats had been allotted at the prevailing market rate as on the date of booking. The Assessing Officer added the difference under s.43CA, relying on the auditor's own quantification. The Commissioner (Appeals)/NFAC, by order dated 18 September 2024, confirmed the addition, holding that the assessee had not produced documentary evidence that consideration or part of it had been received otherwise than in cash on or before the date of the agreement, as s.43CA(4) requires.
The assessee's appeal was allowed in full and the addition of Rs. 38,69,867 deleted; nothing was restored to the Assessing Officer. The Tribunal found that in all 12 cases the market (government) value as on the date of booking was less than the agreed value, and that the gap between booking and registration explained the later rise in government value (para 13). It held that the auditor's mention of the difference in the audit report could not by itself be the basis for an addition without regard to the provisions of the Act (para 13), and that since a part of the consideration had been received as advance under the agreement and the sale deeds were made on the agreement value, no addition was called for in view of s.43CA(3) and (4) (para 15). The order of the Commissioner (Appeals) was set aside (paras 15 and 16).
Section 43CA(3) permits the stamp duty value on the date of the agreement to be taken instead of the value on the date of registration, and s.43CA(4) makes that available only where consideration or part of it was received by account payee cheque, account payee bank draft, electronic clearing system through a bank account or other prescribed electronic mode on or before the date of the agreement. At para 13 the Bench worked from the assessee's own table, reproduced by the Assessing Officer in the assessment order, which showed bookings well before registration and, in every one of the 12 cases, a government value at booking below the agreed value; the later rise in government value was explained by that gap. It held that the auditor having flagged a difference in the audit report was not a basis for an addition without regard to the section. At paras 14 and 15 it followed Kolte Patil Developers Ltd. v. Dy. CIT [2024] 167 taxmann.com 385 (Pune - Trib.), reproducing paras 13 and 14 of that order, and ACIT v. Rajul Constructions [2024] 159 taxmann.com 1261 (Jabalpur - Trib.). One qualification should be kept in view. The finding that a part of the consideration had been received as advance is recorded at para 15 as something 'admittedly' so; the Bench makes no express finding that the advances came by cheque or any other mode named in s.43CA(4), and the Commissioner (Appeals) had confirmed the addition precisely because no such evidence had been produced. The account of advances by cheque belongs to Kolte Patil, whose facts the Bench reproduced, not to a finding in this case. The Bench also did not deal with the assessee's further ground that s.43CA, introduced by the Finance Act 2013 with effect from 1 April 2014, could not apply where the agreement was entered into in 2012; the appeal was allowed on sub-sections (3) and (4) instead.
Merely because the Auditor has mentioned in the audit report that the assessee has sold certain flats which is less than the market value (Govt. value), the same cannot be the basis for addition without looking to the clear provisions of the Act.
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Handle my notice → Ask a CA on WhatsAppNot where sub-sections (3) and (4) of s.43CA are satisfied. The Pune Tribunal deleted the entire addition because the booking dates preceded registration, the agreement values at booking exceeded the stamp duty values then prevailing, and part of the consideration had come through banking channels, so the agreement-date value governed. This was decided by the ITAT (ITAT Pune (R.K. Panda, Vice President and Astha Chandra, Judicial Member), ITA No. 2424/PUN/2024) and bears on section 43CA, section 43CA(3), section 43CA(4) of the Income Tax Act 1961. It is reported as [2025] 172 taxmann.com 194 / [2025] 211 ITD 658 (Pune)(Trib.); IT Appeal No. 2424 (Pune) of 2024, assessment year 2016-17. This is the developer's answer to the routine s.43CA addition on flat sales, where the officer compares the agreement price with the stamp duty value on the registration date and treats the gap as suppressed consideration. The Tribunal also refused to let the addition stand merely because the auditor had flagged a difference at registration, which is how many of these cases are picked up in the first place. Here the entire addition of Rs.38,69,867 on 12 flats went. If it applies to you, the first step is this: Produce the booking or allotment records establishing the date of the agreement and the stamp duty value prevailing on that date.
The assessee, a partnership firm of builders and developers following the percentage completion method, filed its return for assessment year 2016-17 on 15 October 2016 declaring income of Rs. 4,59,330. In scrutiny the Assessing Officer found that of 50 units held as stock-in-trade and possessed during the year, 12 flats had been sold for Rs. 85,37,500 against a market (government) value of Rs. 1,24,07,367, a difference of Rs. 38,69,867 which the auditor had flagged in column 17 of the audit report. The assessee's answer, reproduced in the assessment order, was a table of the 12 flats showing bookings between September 2009 and March 2011 and agreements between June 2011 and March 2016, and that the flats had been allotted at the prevailing market rate as on the date of booking. The Assessing Officer added the difference under s.43CA, relying on the auditor's own quantification. The Commissioner (Appeals)/NFAC, by order dated 18 September 2024, confirmed the addition, holding that the assessee had not produced documentary evidence that consideration or part of it had been received otherwise than in cash on or before the date of the agreement, as s.43CA(4) requires. The matter was decided on 2025-02-20 by the ITAT (ITAT Pune (R.K. Panda, Vice President and Astha Chandra, Judicial Member), ITA No. 2424/PUN/2024). On those facts the ITAT held as follows. The assessee's appeal was allowed in full and the addition of Rs. 38,69,867 deleted; nothing was restored to the Assessing Officer. The Tribunal found that in all 12 cases the market (government) value as on the date of booking was less than the agreed value, and that the gap between booking and registration explained the later rise in government value (para 13). It held that the auditor's mention of the difference in the audit report could not by itself be the basis for an addition without regard to the provisions of the Act (para 13), and that since a part of the consideration had been received as advance under the agreement and the sale deeds were made on the agreement value, no addition was called for in view of s.43CA(3) and (4) (para 15). The order of the Commissioner (Appeals) was set aside (paras 15 and 16).
Section 43CA(3) permits the stamp duty value on the date of the agreement to be taken instead of the value on the date of registration, and s.43CA(4) makes that available only where consideration or part of it was received by account payee cheque, account payee bank draft, electronic clearing system through a bank account or other prescribed electronic mode on or before the date of the agreement. At para 13 the Bench worked from the assessee's own table, reproduced by the Assessing Officer in the assessment order, which showed bookings well before registration and, in every one of the 12 cases, a government value at booking below the agreed value; the later rise in government value was explained by that gap. It held that the auditor having flagged a difference in the audit report was not a basis for an addition without regard to the section. At paras 14 and 15 it followed Kolte Patil Developers Ltd. v. Dy. CIT [2024] 167 taxmann.com 385 (Pune - Trib.), reproducing paras 13 and 14 of that order, and ACIT v. Rajul Constructions [2024] 159 taxmann.com 1261 (Jabalpur - Trib.). One qualification should be kept in view. The finding that a part of the consideration had been received as advance is recorded at para 15 as something 'admittedly' so; the Bench makes no express finding that the advances came by cheque or any other mode named in s.43CA(4), and the Commissioner (Appeals) had confirmed the addition precisely because no such evidence had been produced. The account of advances by cheque belongs to Kolte Patil, whose facts the Bench reproduced, not to a finding in this case. The Bench also did not deal with the assessee's further ground that s.43CA, introduced by the Finance Act 2013 with effect from 1 April 2014, could not apply where the agreement was entered into in 2012; the appeal was allowed on sub-sections (3) and (4) instead. In the words reproduced by the source cited on this page: "Merely because the Auditor has mentioned in the audit report that the assessee has sold certain flats which is less than the market value (Govt. value), the same cannot be the basis for addition without looking to the clear provisions of the Act." The decision followed or applied Kolte Patil Developers Ltd. v. Dy. CIT [2024] 167 taxmann.com 385 (Pune - Trib.) — followed at para 14 (case review); ACIT v. Rajul Constructions [2024] 159 taxmann.com 1261 (Jabalpur - Trib.) — followed at para 15 (case review).
It was decided by the ITAT on 2025-02-20 and is reported as [2025] 172 taxmann.com 194 / [2025] 211 ITD 658 (Pune)(Trib.); IT Appeal No. 2424 (Pune) of 2024, assessment year 2016-17. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 43CA, section 43CA(3), section 43CA(4), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The assessee's appeal was allowed in full and the addition of Rs. 38,69,867 deleted; nothing was restored to the Assessing Officer. The Tribunal found that in all 12 cases the market (government) value as on the date of booking was less than the agreed value, and that the gap between booking and registration explained the later rise in government value (para 13). It held that the auditor's mention of the difference in the audit report could not by itself be the basis for an addition without regard to the provisions of the Act (para 13), and that since a part of the consideration had been received as advance under the agreement and the sale deeds were made on the agreement value, no addition was called for in view of s.43CA(3) and (4) (para 15). The order of the Commissioner (Appeals) was set aside (paras 15 and 16). It arises in Capital Gains matters, on section 43CA, section 43CA(3), section 43CA(4) of the Income Tax Act 1961, and was decided by ITAT Pune (R.K. Panda, Vice President and Astha Chandra, Judicial Member), ITA No. 2424/PUN/2024. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Show that at least part of the consideration was received by account payee cheque or other banking channel on or before the agreement date, since sub-section (4) turns on it. Compare flat by flat against the stamp duty value on the agreement date rather than the registration date, and check the tolerance band before conceding any part of the addition. Do not let a tax audit note recording a difference at registration be treated as an admission of undervaluation.
Searched for later treatment; none was found. That is not the same as a source affirming it. The order has been read in full: [2025] 172 taxmann.com 194/211 ITD 658 (Pune - Trib.), IT Appeal No. 2424 (Pune) of 2024, assessment year 2016-17, decided 20 February 2025 by R.K. Panda (Vice President) and Ms. Astha Chandra (Judicial Member), the assessee's appeal allowed. It carries no citator banner and nothing later applying, following or affirming it was traced; absence of a reported challenge is not good law, which is why the status previously recorded here has been changed. It sits in an established line rather than standing alone — it follows Kolte Patil Developers Ltd. v. Dy. CIT [2024] 167 taxmann.com 385 (Pune - Trib.) and ACIT v. Rajul Constructions [2024] 159 taxmann.com 1261 (Jabalpur - Trib.), both recorded in its case review. On the provision, the text of s.43CA has now been checked in the Acts module: the first proviso to sub-section (1) exempts the case where the stamp duty value does not exceed one hundred and ten per cent of the consideration, and a second proviso substitutes one hundred and twenty per cent for a residential unit first allotted between 12 November 2020 and 30 June 2021 where the consideration does not exceed two crore rupees. Sub-section (4) requires an account payee cheque, account payee bank draft, electronic clearing system through a bank account or other prescribed electronic mode. The Finance Act and effective date behind the ten per cent figure were not verified in this read, and the Income-tax Act, 1961 is now flagged as repealed. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The order has been read in full and no longer rests on a single secondary source. It is reported at [2025] 172 taxmann.com 194 and [2025] 211 ITD 658 (Pune - Trib.), the assessment year is 2016-17, and the Members are R.K. Panda (Vice President) and Ms. Astha Chandra (Judicial Member). The sentence previously quoted here was a news site's paraphrase and has been replaced with the Bench's own words at para 13. Three things a reader should know before citing it. The Bench recorded at para 15 that a part of the consideration was 'admittedly' received as advance but made no finding that it came by any of the modes s.43CA(4) requires; the description of advances received by cheque belongs to Kolte Patil Developers Ltd., whose paragraphs the Bench reproduced. The assessee's further ground that s.43CA could not apply at all to agreements entered into before the section commenced on 1 April 2014 was not dealt with. And the report designates the Bench 'SMC' although two Members sat, which appears to be a printing slip. The s.43CA tolerance band has now been verified against the section: the first proviso exempts a stamp duty value within one hundred and ten per cent of the consideration, with one hundred and twenty per cent for a residential unit first allotted between 12 November 2020 and 30 June 2021 where the consideration does not exceed two crore rupees. The Bench made no finding on the mode in which the advances were received, which is the condition s.43CA(4) actually imposes, and did not decide the assessee's alternative ground that the section could not apply to agreements predating its commencement on 1 April 2014. Nothing later applying or following the order was traced and it carries no citator banner. The Finance Act and effective date behind the present ten per cent tolerance figure were not verified. A Tribunal decision, persuasive only. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The assessee's appeal was allowed in full and the addition of Rs. 38,69,867 deleted; nothing was restored to the Assessing Officer. The Tribunal found that in all 12 cases the market (government) value as on the date of booking was less than the agreed value, and that the gap between booking and registration explained the later rise in government value (para 13). It held that the auditor's mention of the difference in the audit report could not by itself be the basis for an addition without regard to the provisions of the Act (para 13), and that since a part of the consideration had been received as advance under the agreement and the sale deeds were made on the agreement value, no addition was called for in view of s.43CA(3) and (4) (para 15). The order of the Commissioner (Appeals) was set aside (paras 15 and 16).
TaxSphere, “Bansal Land Developers v ITO”, https://taxnotice.vittsphere.com/caselaw/case/bansal-land-developers-v-ito-43ca/ (validity last checked 2026-08-19)
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The reopening notice says my sale below circle rate attracts section 50C, but I am a developer and the floor sold was stock in trade, so section 50C cannot apply. Does that error destroy the notice?
The only addition is the gap between the stamp duty value and my price. Can that carry a s.270A penalty?
I bought flats slightly below the stamp duty value and the Assessing Officer has added the difference in my hands under section 56(2)(vii)(b). There is no tolerance band in that clause. Can I still claim the section 50C margin?
Section 43CA got a 5 per cent tolerance band in 2018 and 10 per cent in 2020. Does the band help an earlier year, as Maria Fernandes Cheryl says it does for s.50C?
