The stamp duty value is above what I paid for the property. Does the 10% tolerance cover my earlier year?
Yes. Only the amount by which the difference exceeds the 10% tolerance band can be added under s.56(2)(x), and the increase of the band from 5% to 10% is clarificatory, so it applies to earlier assessment years as well.
Decided by the ITAT (ITAT Mumbai Bench 'B' — Amarjit Singh (Accountant Member) and Anikesh Banerjee (Judicial Member); cross appeals, IT Appeal Nos. 5218 and 5352 (Mum.) of 2024; AY 2018-19) on 2025-02-25, reported as [2025] 172 taxmann.com 385 (Mumbai - Trib.) / [2025] 211 ITD 728 (Mumbai - Trib.); IT Appeal Nos. 5218 and 5352 (Mum.) of 2024. It bears on section 56(2)(x), section 56(2)(x)(b)(B), section 143(3), section 144B of the Income Tax Act 1961, in Gifts, Shares & Angel Tax matters.
Two things to take from this in a property purchase addition. First, the tolerance band is a safe harbour and the officer cannot add the whole difference between the declared consideration and the stamp duty value. Second, the reference date can be the date of allotment rather than the date of registration, and the DVO's figure can displace the stamp authority's — which is how a Rs 9.04 crore addition here came down to Rs 81.19 lakh. The retrospectivity point rests on the wording of the proviso being unchanged and only the band widened.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
Read aloud by your device. Press again to stop.
In the year under consideration the assessee registered a purchase from M/s Lotus Griha Nirman Pvt. Ltd. of about 6,180 square feet in a proposed commercial building, 'Lous Link Square', for Rs. 8,19,00,000. The property had been booked earlier: Rs. 3,50,00,000 was paid through banking channels and a letter of allotment was issued on 30 March 2010. At registration there was a difference of Rs. 9,04,37,500 between the consideration set forth and the stamp duty value. The matter was referred to the Departmental Valuation Officer, but no report reached the assessee during the assessment, and the assessment was completed on 30 September 2021 under section 143(3) read with section 144B with the whole Rs. 9,04,37,500 added under section 56(2)(x). At the appellate stage the Commissioner (Appeals) received the DVO's report of 23 March 2022, which valued the property as at financial year 2009-10 because the allotment was of 30 March 2010 and payment had gone through banking channels, and restricted the addition to Rs. 81,19,625, the difference between that valuation and the consideration. Both sides appealed. The unit-wise chart before the Tribunal showed the difference as 9.31 per cent for unit 101, 9.94 per cent for unit 102 and 10.01 per cent for unit 103.
The Bench held that section 56(2)(x)(b)(B), as amended by the Finance Act 2020 to raise the tolerance limit from 5 per cent to 10 per cent, has retrospective effect and applies to assessment year 2018-19, and upheld the Commissioner (Appeals)' reduction of the addition, including his taking the date of allotment as the reference date on the DVO's valuation. It did not, however, work out the final figure: it remitted the matter to the Assessing Officer to allow the assessee the incremental differences under that provision, directing that in the case of unit 103, where the difference is 10.01 per cent, the excess over 10 per cent shall be considered for addition. The Revenue's appeal (No. 5352) was dismissed and the assessee's appeal (No. 5218) allowed, but the quantum stands remitted and an addition on unit 103 survives.
On the reference date the Bench accepted the Commissioner (Appeals)' approach - valuation as at the allotment of 30 March 2010, the booking payment having been made through banking channels - against the Departmental Representative's contention that an allotment letter cannot be treated as an agreement for sale. On retrospectivity it gave no independent analysis: it recorded that the question whether the increase from 5 per cent to 10 per cent, brought in by the Finance Act 2020 with effect from 1 April 2021, is clarificatory or curative was squarely covered by two co-ordinate bench decisions, Glory Shipmanagement (P.) Ltd. v. CIT(A) (Mumbai) and Sandeep Kumar Poddar v. ITO (Kolkata), and followed them. Balkrishna Venkappa Bhandary v. Dy. CIT was counsel's authority and its paragraphs 7.3 to 7.5 are reproduced in the order, but the Bench's own sentence on what covers the issue names only Glory Shipmanagement and Sandeep Kumar Poddar, and it nowhere says it is following Balkrishna. Having held the provision retrospective, the Bench went to the assessee's own chart, found units 101 and 102 within the band and unit 103 marginally outside it at 10.01 per cent, and sent the computation back to the Assessing Officer.
we hold that the provision of section 56(2)(x)(b)(B) has retrospective effect and is applicable to the impugned assessment year. Accordingly, we uphold the view adopted by the Ld. CIT(A) in reducing the addition under section 56(2)(x). However, with respect to section 56(2)(x)(b)(B), we remit the matter to the file of the Ld. AO for allowing the assessee the incremental differences as per the said Act for the alleged properties.
Upload it and we will read it, work out your deadline and draft the reply. A CA reviews before anything is filed.
Handle my notice → Ask a CA on WhatsAppYes. Only the amount by which the difference exceeds the 10% tolerance band can be added under s.56(2)(x), and the increase of the band from 5% to 10% is clarificatory, so it applies to earlier assessment years as well. This was decided by the ITAT (ITAT Mumbai Bench 'B' — Amarjit Singh (Accountant Member) and Anikesh Banerjee (Judicial Member); cross appeals, IT Appeal Nos. 5218 and 5352 (Mum.) of 2024; AY 2018-19) and bears on section 56(2)(x), section 56(2)(x)(b)(B), section 143(3), section 144B of the Income Tax Act 1961. It is reported as [2025] 172 taxmann.com 385 (Mumbai - Trib.) / [2025] 211 ITD 728 (Mumbai - Trib.); IT Appeal Nos. 5218 and 5352 (Mum.) of 2024. Two things to take from this in a property purchase addition. First, the tolerance band is a safe harbour and the officer cannot add the whole difference between the declared consideration and the stamp duty value. Second, the reference date can be the date of allotment rather than the date of registration, and the DVO's figure can displace the stamp authority's — which is how a Rs 9.04 crore addition here came down to Rs 81.19 lakh. The retrospectivity point rests on the wording of the proviso being unchanged and only the band widened. If it applies to you, the first step is this: Compute the difference as a percentage of the consideration before conceding anything; only the excess over the band is addable.
In the year under consideration the assessee registered a purchase from M/s Lotus Griha Nirman Pvt. Ltd. of about 6,180 square feet in a proposed commercial building, 'Lous Link Square', for Rs. 8,19,00,000. The property had been booked earlier: Rs. 3,50,00,000 was paid through banking channels and a letter of allotment was issued on 30 March 2010. At registration there was a difference of Rs. 9,04,37,500 between the consideration set forth and the stamp duty value. The matter was referred to the Departmental Valuation Officer, but no report reached the assessee during the assessment, and the assessment was completed on 30 September 2021 under section 143(3) read with section 144B with the whole Rs. 9,04,37,500 added under section 56(2)(x). At the appellate stage the Commissioner (Appeals) received the DVO's report of 23 March 2022, which valued the property as at financial year 2009-10 because the allotment was of 30 March 2010 and payment had gone through banking channels, and restricted the addition to Rs. 81,19,625, the difference between that valuation and the consideration. Both sides appealed. The unit-wise chart before the Tribunal showed the difference as 9.31 per cent for unit 101, 9.94 per cent for unit 102 and 10.01 per cent for unit 103. The matter was decided on 2025-02-25 by the ITAT (ITAT Mumbai Bench 'B' — Amarjit Singh (Accountant Member) and Anikesh Banerjee (Judicial Member); cross appeals, IT Appeal Nos. 5218 and 5352 (Mum.) of 2024; AY 2018-19). On those facts the ITAT held as follows. The Bench held that section 56(2)(x)(b)(B), as amended by the Finance Act 2020 to raise the tolerance limit from 5 per cent to 10 per cent, has retrospective effect and applies to assessment year 2018-19, and upheld the Commissioner (Appeals)' reduction of the addition, including his taking the date of allotment as the reference date on the DVO's valuation. It did not, however, work out the final figure: it remitted the matter to the Assessing Officer to allow the assessee the incremental differences under that provision, directing that in the case of unit 103, where the difference is 10.01 per cent, the excess over 10 per cent shall be considered for addition. The Revenue's appeal (No. 5352) was dismissed and the assessee's appeal (No. 5218) allowed, but the quantum stands remitted and an addition on unit 103 survives.
On the reference date the Bench accepted the Commissioner (Appeals)' approach - valuation as at the allotment of 30 March 2010, the booking payment having been made through banking channels - against the Departmental Representative's contention that an allotment letter cannot be treated as an agreement for sale. On retrospectivity it gave no independent analysis: it recorded that the question whether the increase from 5 per cent to 10 per cent, brought in by the Finance Act 2020 with effect from 1 April 2021, is clarificatory or curative was squarely covered by two co-ordinate bench decisions, Glory Shipmanagement (P.) Ltd. v. CIT(A) (Mumbai) and Sandeep Kumar Poddar v. ITO (Kolkata), and followed them. Balkrishna Venkappa Bhandary v. Dy. CIT was counsel's authority and its paragraphs 7.3 to 7.5 are reproduced in the order, but the Bench's own sentence on what covers the issue names only Glory Shipmanagement and Sandeep Kumar Poddar, and it nowhere says it is following Balkrishna. Having held the provision retrospective, the Bench went to the assessee's own chart, found units 101 and 102 within the band and unit 103 marginally outside it at 10.01 per cent, and sent the computation back to the Assessing Officer. In the words reproduced by the source cited on this page: "we hold that the provision of section 56(2)(x)(b)(B) has retrospective effect and is applicable to the impugned assessment year. Accordingly, we uphold the view adopted by the Ld. CIT(A) in reducing the addition under section 56(2)(x). However, with respect to section 56(2)(x)(b)(B), we remit the matter to the file of the Ld. AO for allowing the assessee the incremental differences as per the said Act for the alleged properties." The decision followed or applied Glory Shipmanagement (P.) Ltd. v. CIT (Appeals) [IT Appeal No. 3149 (Mum.) of 2023, dated 30 January 2024] — followed; Sandeep Kumar Poddar v. ITO [2023] 151 taxmann.com 18 / 201 ITD 344 (Kolkata - Trib.) — followed.
It was decided by the ITAT on 2025-02-25 and is reported as [2025] 172 taxmann.com 385 (Mumbai - Trib.) / [2025] 211 ITD 728 (Mumbai - Trib.); IT Appeal Nos. 5218 and 5352 (Mum.) of 2024. 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 56(2)(x), section 56(2)(x)(b)(B), section 143(3), section 144B, 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 cuts both ways and is cited by both sides. The Bench held that section 56(2)(x)(b)(B), as amended by the Finance Act 2020 to raise the tolerance limit from 5 per cent to 10 per cent, has retrospective effect and applies to assessment year 2018-19, and upheld the Commissioner (Appeals)' reduction of the addition, including his taking the date of allotment as the reference date on the DVO's valuation. It did not, however, work out the final figure: it remitted the matter to the Assessing Officer to allow the assessee the incremental differences under that provision, directing that in the case of unit 103, where the difference is 10.01 per cent, the excess over 10 per cent shall be considered for addition. The Revenue's appeal (No. 5352) was dismissed and the assessee's appeal (No. 5218) allowed, but the quantum stands remitted and an addition on unit 103 survives. It arises in Gifts, Shares & Angel Tax matters, on section 56(2)(x), section 56(2)(x)(b)(B), section 143(3), section 144B of the Income Tax Act 1961, and was decided by ITAT Mumbai Bench 'B' — Amarjit Singh (Accountant Member) and Anikesh Banerjee (Judicial Member); cross appeals, IT Appeal Nos. 5218 and 5352 (Mum.) of 2024; AY 2018-19. 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. Ask for a reference to the Departmental Valuation Officer and press for the DVO figure in place of the stamp authority's valuation. Check which date the officer has taken for the stamp duty value — allotment or registration — since the earlier date often produces a lower figure. For years before the band was raised, argue the increase from 5% to 10% is clarificatory and applies to those years too.
Validity check could not be completed. No later decision applying, following or affirming this order was found and it carries no citator entry. Its own authority is borrowed: it follows Glory Shipmanagement (P.) Ltd. v. CIT(A) [IT Appeal No. 3149 (Mum.) of 2023, dated 30 January 2024] and Sandeep Kumar Poddar v. ITO [2023] 151 taxmann.com 18 / 201 ITD 344 (Kolkata - Trib.) on the retrospective operation of the increase in the tolerance limit, and adds no reasoning of its own. Whether the Revenue has taken the matter further is not recorded. That finding was checked against a published source, which is linked on this page, on 2026-09-05. 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.
Read the disposal carefully before citing this. The Tribunal held the raised tolerance limit retrospective and upheld the Commissioner (Appeals)' reduction of the addition, but it did not fix the final figure: it remitted the computation to the Assessing Officer, and it directed that for unit 103, where the difference was 10.01 per cent, the excess over 10 per cent be considered for addition. That direction is the Tribunal's own, in para 6, and it does not follow the words of item (B) of section 56(2)(x)(b), which charge the whole excess of stamp duty value over consideration once the difference crosses the threshold; the library's note on the tolerance band under section 50C and section 56(2)(x) reads the band as a gate rather than as a deduction. So the disagreement is with the order itself, not with a report of it. Two further points. The retrospectivity holding carries no reasoning of its own - the Bench recorded the question as squarely covered by two co-ordinate bench decisions and followed them - so if the point is contested, go to Glory Shipmanagement and Sandeep Kumar Poddar rather than to this order. And the valuation succeeded only because a booking payment had been made through banking channels and an allotment letter of 30 March 2010 existed, which let the Departmental Valuation Officer value the property as at financial year 2009-10; without that, the date of registration governs. The order does not state the result of the remitted computation, and there is no record of any further appeal. The reasoning on retrospectivity is taken over from two co-ordinate bench decisions which have not themselves been read. 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 Bench held that section 56(2)(x)(b)(B), as amended by the Finance Act 2020 to raise the tolerance limit from 5 per cent to 10 per cent, has retrospective effect and applies to assessment year 2018-19, and upheld the Commissioner (Appeals)' reduction of the addition, including his taking the date of allotment as the reference date on the DVO's valuation. It did not, however, work out the final figure: it remitted the matter to the Assessing Officer to allow the assessee the incremental differences under that provision, directing that in the case of unit 103, where the difference is 10.01 per cent, the excess over 10 per cent shall be considered for addition. The Revenue's appeal (No. 5352) was dismissed and the assessee's appeal (No. 5218) allowed, but the quantum stands remitted and an addition on unit 103 survives.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
We charge fees for our public utility work. Does that cost us charitable status under s.2(15)?
My return was only processed under 143(1). Does that stop the department reopening it later?
No s.143(2) notice was issued at all. Does s.292BB save the assessment?
Can the Assessing Officer estimate income on departmental material the assessee has never been shown?