Stamp duty valuation for Section 56(2)(x) applies based on initial allotment if banking payments occurred.

By | August 3, 2026
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Stamp duty valuation for Section 56(2)(x) applies based on initial allotment if banking payments occurred.

Issue

Whether an allotment letter issued by a builder—followed by partial consideration paid via banking channels—qualifies as an “agreement” for the purpose of the proviso to Section 56(2)(x)(b), entitling the assessee to adopt the stamp duty value as on the date of original allotment rather than the date of final registration.

Facts

  • Initial Allotment & Payment: The assessee booked a flat in a proposed developer project in 2001, paid earnest money via cheque, and received an allotment letter from the developer.

  • Plan Revisions & Subsequent Agreements: Owing to revisions in building plans over time, the allotment was updated periodically via subsequent allotment letters and a Memorandum of Understanding (MOU).

  • Final Registration: The final registered document for the property was executed in 2019 based on the updated allotment letters issued in 2019.

  • AO’s Invocation of Section 56(2)(x): The Assessing Officer (AO) noted that the final consideration, area, flat number, and parking were concluded in 2019. Treating 2019 as the commencement year, the AO applied Section 56(2)(x)(b) to tax the difference between the actual consideration and the higher 2019 stamp duty valuation as “Income from Other Sources.”

  • Assessee’s Stand: The assessee maintained that the transaction originated with the initial allotment letter and banking payments, satisfying the statutory proviso to adopt the stamp duty value of the earlier date.

Decision

  • Transaction Originated Prior to 2019: The transaction could not be treated as having commenced only in 2019 merely because of building plan revisions or the late execution of the formal registered deed, given the subsisting allotment, MOU, and banking payments.

  • Allotment Letter Qualifies as Agreement: An allotment letter containing essential terms and acted upon via banking channel payments qualifies as an agreement for the purpose of the proviso to Section 56(2)(x)(b).

  • Proviso Requirements Satisfied: The assessee met all statutory requirements of the proviso to Section 56(2)(x)(b)—namely, an earlier arrangement fixing consideration, subsequent registration, and payment of consideration through banking channels prior to registration.

  • Addition Deleted: The addition made under Section 56(2)(x)(b) assessing the stamp duty differential as income was held unsustainable and directed to be deleted, deciding the issue in favor of the assessee.

Key Takeaways

  • Scope of Allotment Letter as Agreement: An allotment letter issued by a builder acts as a binding “agreement fixing consideration” under the proviso to Section 56(2)(x)(b) if supported by banking channel payments.

  • Impact of Plan Revisions: Subsequent modifications to flat numbers, parking spaces, or exact layout due to building plan revisions do not erase the historical commencement date of an allotment.

  • Protection Against Unearned Stamp Duty Escalation: Taxpayers who pay advance consideration through banking channels are legally protected from being taxed on inflationary increases in stamp duty value that occur between the initial booking and final deed registration.

IN THE ITAT MUMBAI BENCH ‘B’
Deputy Commissioner of Income-tax
v.
Nitin Kshirsagar (HUF)*
SAKTIJIT DEY, Vice President
and MAKARAND VASANT MAHADEOKAR, Accountant Member
IT Appeal No. 694 (Mum) of 2026
[Assessment year 2020-21]
JULY  8, 2026
Rakesh Joshi, Ld. AR for the Applicant. Shree Kumar C., Ld. DR for the Respondent.
ORDER
Makarand Vasant Mahadeokar, Accountant Member.- This appeal by the Revenue is directed against the order dated 11.11.2025 passed by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “the CIT(A)”], under section 250 of the Income-tax Act, 1961 [hereinafter referred to as “the Act”], for the assessment year 2020-21. The impugned appellate order arises from the assessment order dated 22.09.2022 passed by the Assessment Unit under section 143(3) read with section 144B of the Act.
Facts of the Case
2. The assessee is a Hindu Undivided Family and is the proprietor of M/s Admyre Advertising Agency. The assessee filed its return of income for the year under consideration on 03.02.2021 declaring a total income of Rs. 1,51,23,480/-. The return was processed under section 143(1)(a) of the Act on 06.04.2021. The case was selected for limited scrutiny for verification of the issue as to whether the purchase value of an immovable property was lower than the value adopted by the stamp valuation authority, attracting the provisions of section 56(2) or any other relevant provision of the Act. Accordingly, notice under section 143(2) was issued, followed by notices under section 142(1) along with questionnaires.
3. The controversy relates to the acquisition of a residential flat from Suraj Estate Developers Private Limited, hereinafter referred to as “the Developer”. The assessee stated before the Assessing Officer that, in the year 2001, M/s Admyre Advertising Agency had booked one flat in the then proposed building known as “Ocean Star-1”, situated on Final Plot No. 1199 of TPS IV, Mahim Division, Kashinath Dhuru Road, Dadar, Mumbai.
4. At the time of the original booking, the property comprised a three-bedroom flat admeasuring 1,550 sq. ft. of carpet area, together with one car parking space in the stilt portion. The agreed consideration was Rs. 70,25,000/-, calculated at the rate of Rs. 4,532/- per sq. ft. The assessee paid earnest money of Rs. 51,000/- to the Developer through cheque No. 700385 dated 24.10.2001, drawn on Central Bank of India, Churchgate Branch. The Developer thereafter issued a Receipt-cum-Allotment Letter dated 01.11.2001. The said allotment letter was subsequently annexed as Annexure H to the agreement ultimately executed between the assessee and the Developer on 13.12.2019.
5. A Memorandum of Understanding was thereafter executed between the Developer and M/s Admyre Advertising Agency on 25.06.2003 for a consideration of Rs. 70,25,000/-. Subsequently, by a Revised Allotment Letter dated 07.05.2009, Flat No. 1501 on the 15th floor, together with one car parking space, was allotted to the assessee for a revised consideration of Rs. 1,02,80,000/-.
6. Owing to a revision in the building plans, the Developer issued a further revised allotment letter dated 17.06.2019, whereby Flat No. 1501 on the 15th floor, together with one car parking slot, was allotted for a consideration of Rs. 1,69,75,285/. By a subsequent letter dated 09.07.2019, the Developer allotted one additional car parking slot for a consideration of Rs. 5,00,000/-. The final agreement was executed and registered on 13.12.2019 for an aggregate consideration of Rs. 1,74,75,285/-. The value adopted by the stamp valuation authority for the property was, however, Rs. 4,13,08,000/-.
7. On examination of the documentary evidence, the Assessing Officer observed that the assessee had purchased the property for a consideration of Rs. 1,74,75,285/-, whereas its value for the purpose of stamp duty had been assessed at Rs. 4,13,08,000/-. The Assessing Officer invoked section 56(2)(x)(b) and proposed to assess the difference of Rs. 2,38,32,715/-, being Rs. 4,13,08,000/- less Rs. 1,74,75,285/-, as deemed income chargeable under the head “Income from other sources”. The Assessing Officer observed that the stamp duty value exceeded 105% of the consideration and that the difference between the two values was more than Rs. 50,000/-.
8. A show-cause notice dated 21.03.2022 was issued along with the draft assessment order, requiring the assessee to explain why the aforesaid difference should not be added to its income. In response dated 23.03.2022, the assessee contended that the relevant provisions could not be applied since the immovable property had been acquired pursuant to the original allotment and the Memorandum of Understanding dated 25.06.2003, which had been revised on 07.05.2009, much before the enactment of the provision relied upon by the Assessing Officer. The assessee contended that the earlier allotment letter and Memorandum of Understanding constituted a complete agreement between the parties. In support of its contention, the assessee relied upon the decision of the Jaipur Bench of the Tribunal in the case of Naina Saraf v. PCIT- 2, Jaipur.
9. The Assessing Officer rejected the contention of the assessee. The Assessing Officer held that the decision in the case of Naina Saraf v. PCIT- 2, Jaipur was distinguishable because, in that case, the allotment letter had been issued only once and the final deed had been executed on its basis. In the present case, according to the Assessing Officer, the allotment had been revised several times and the registered deed had ultimately been executed on the basis of the allotment letters dated 17.06.2019 and 09.07.2019.
10. The Assessing Officer further observed that the earlier allotment letters could not be taken into consideration because the building plan had been revised and finalised only in the year 2019. According to the Assessing Officer, the sale consideration, the area and number of the flat and the parking spaces were finally determined under the allotment letters dated 17.06.2019 and 09.07.2019 and not under the earlier allotment letters. The earlier allotment letters had, according to the Assessing Officer, never been finally acted upon or executed.
11. The Assessing Officer also observed that, when the allotment letter dated 17.06.2019 was issued, the stamp duty value of the property was the same as the value prevailing at the time of execution of the registered deed. The assessee’s stand was considered contradictory because it had relied upon a decision concerning the applicability of section 56(2)(vii)(b)(ii), while at the same time contending that the provision was inapplicable since the agreement had been entered into prior to its enactment. The Assessing Officer, therefore, held that the earlier agreements were not relevant because the terms and conditions governing the final deed had been settled under the allotment letters dated 17.06.2019 and 09.07.2019.
12. A further show-cause notice dated 30.08.2022 was issued, requiring compliance on or before 07.09.2022. The assessment order records that no response was received within the stipulated time. The statement of facts filed before the learned CIT(A), however, records the assessee’s assertion that, by a submission dated 13.09.2022, it had pointed out that payments had already been made pursuant to the earlier allotment and that the allotment letter dated 17.06.2019 could not be treated as the originating document of the transaction.
13. The Assessing Officer ultimately concluded that the assessee had acquired the immovable property for a consideration lower than its stamp duty value and that the provisions of section 56(2)(x) were applicable. The difference of Rs. 2,38,32,715/- was accordingly added to the income of the assessee. The returned income of Rs. 1,51,23,480/- was assessed at Rs. 3,89,56,195/-, which was rounded off under section 288A to Rs. 3,89,56,200/-. The assessment was completed under section 143(3) read with section 144B of the Act. Interest under sections 234A and 234B was directed to be charged and penalty proceedings under section 270A were initiated separately.
14. Aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A) on 07.10.2022. Before the learned CIT(A), the assessee reiterated that the original booking had taken place in the financial year 2001-02, whereas the modification concerning the change in the floor and the corresponding revision of consideration had taken place in the financial year 2009-10. The execution and registration of the final agreement during the year under consideration were stated to be subsequent formalities and not the originating point of the transaction.
15. The assessee contended that, for the purpose of comparing the actual consideration with the stamp duty value under section 56(2)(x), the relevant date ought to be the date of the original allotment or, at the latest, the date of the revised allotment dated 07.05.2009. It was contended that the stamp duty value prevailing on the much later date of registration could not be adopted.
16. The assessee also relied upon CBDT Circular No. 471 dated 15.10.1986 and contended that an allotment letter issued by a developer, upon payment of the first instalment, creates enforceable rights in favour of the allottee and constitutes an agreement to sell for the purpose of the provisos to section 56(2)(x). The assessee further placed before the learned CIT(A) the details of payments made through banking channels. These included Rs. 51,000/- paid on 25.10.2001, Rs. 2,50,000/- paid on 13.05.2009, Rs. 5,00,000/- paid on 30.06.2009 and Rs. 2,50,000/- paid on 01.04.2015, aggregating to Rs. 10,51,000/-.
17. Without prejudice, the assessee also referred to the assessment completed in the case of its spouse, Mrs. Nisha Kshirsagar, concerning an adjacent property stated to have been acquired under materially similar circumstances. It was submitted that, in her case, an explanation similar to that furnished by the assessee had been accepted and no addition under section 56(2)(x) had been made.
18. The learned CIT(A) examined the first and second provisos to section 56(2)(x)(b) and observed that it was an undisputed fact that a part of the purchase consideration had been paid through banking channels. The learned CIT(A) held that the principal question was whether the allotment letters could be regarded as agreements to sell so as to permit the adoption of the stamp duty value prevailing on the dates of allotment instead of the value prevailing on the date of registration.
19. The learned CIT(A) referred to the decision of the Mumbai Bench of the Tribunal in Parth Dashrath Gandhi v. Addl./Dy./Asstt. CIT [IT Appeal No. 1990 (Mum.) of 2022, dated 31-1-2023]. The relevant finding reproduced in the appellate order reads as under:
“Accordingly, following the above said decision, we hold that the respective allotment letters issued to the assessee should be considered as ‘Agreement to sell’ for the purposes of sec.56(2)(x) of the Act. Since the assessee has paid the parts of consideration as per the terms and conditions of allotment through banking channels prior to the execution of Sale agreement, we are of the view that the provisos to sec.56(2)(x) shall apply to the facts of the present case. Accordingly, the stamp duty valuation as on the date of respective Allotment letters should be considered for the purposes of sec.56(2)(x) of the Act. Hence the AO was not justified in considering the stamp duty valuation as on the date of execution of agreement to sell.”
20. The learned CIT(A) also referred to the decision of the Mumbai Bench of the Tribunal in Balkrishna Venkappa Bhandary v. Dy. CIT  (Mumbai – Trib.), wherein it was held as under:
“First of all, when builder gives an allotment letter with terms and conditions and all the rights and the value of purchase is agreed upon which was accepted by the assessee and acted upon then it is clearly covered under aforesaid proviso to section 56(2)(x) of the Act.”
21. The further relevant finding reproduced in the appellate order reads:
“Therefore, based on the above discussions and the decisions relied by the Ld.AR on this issue, we are of the opinion that, the value as on date of allotment has to be treated as stamp duty value for the purpose of aforesaid provision of section 56(2)(x) of the Act.”
22. Following the aforesaid decisions, the learned CIT(A) held that the allotment letters issued to the assessee were required to be regarded as agreements to sell for the purposes of section 56(2)(x). Since parts of the consideration had been paid through banking channels prior to the execution of the registered agreement, the learned CIT(A) held that the provisos to section 56(2)(x) were applicable. The stamp duty valuation as on the dates of the respective allotment letters was, therefore, required to be considered. The learned CIT(A) consequently held that the Assessing Officer was not justified in adopting the stamp duty value prevailing on the date of registration and deleted the addition of Rs. 2,38,32,715/-. The appeal of the assessee was accordingly allowed.
23. The Revenue is aggrieved by the relief granted by the learned CIT(A) and has raised the following grounds of appeal before us:
1. Whether on the facts and in the circumstances of the case and in law, the CIT (A) has erred in deleting the addition of Rs. 2,38,32,715/-, relying upon the decision ITAT, Mumbai’s decision in the case of Parth Gandhi v. ACIT and others. However, this decision of the Hon’ble ITAT relied upon by the Ld.CIT(A) is different with the facts of the assessee’s case, as in the case of the assessee the allotment letter has been revised several times and the registered deed was executed on the basis of the allotment letters dated June 17th, 2019 and July 09th, 2019. Also, earlier allotment letters cannot be considered because the building plan was revised and finalized in 2019 only.
2. Whether on the facts and in the circumstances of the case and in law, the CIT(A) has erred in considering that the sale consideration, area of the flat, flat number and parking were finally decided vide allotment letters dated June 17th, 2019 and July 09th, 2019 and not by the earlier allotment letters. Allotment letters issued earlier were never executed finally.
3. Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A), has erred in considering provisions of Section 56(2)(x)(b) it is evident that the assessee purchased the flat for the consideration of Rs.1,74,75,285/-, whereas the market value for the purpose of stamp duty was assessed at Rs. 4,13,08,000/-.
4. The appellant craves to add, alter, classify, reclassify, delete or modify any of the above grounds of appeal and requests to consider each of the above grounds without prejudice to one another.
24. The learned Departmental Representative (DR) supported the assessment order and submitted that the learned CIT(A) erred in deleting the addition made by the Assessing Officer under section 56(2)(x)(b) of the Act. He submitted that the statutory scheme of section 56(2)(x)(b), particularly the first proviso thereto, proceeds on the foundational requirement that the amount of consideration for the transfer of immovable property must have been fixed on an anterior date. According to him, the expression used in the proviso is “the date of agreement fixing the amount of consideration for the transfer of immovable property”, and therefore, unless the consideration is finally fixed by such agreement, the assessee cannot invoke the benefit of the stamp duty value prevailing on an earlier date.
25. The learned DR submitted that, in the present case, the consideration cannot be said to have been fixed either by the original allotment letter dated 01.11.2001 or by the subsequent Memorandum of Understanding dated 25.06.2003 or the revised allotment letter dated 07.05.2009. He submitted that the allotment was revised from time to time and the final registered document was executed only on the basis of the revised allotment letters dated 17.06.2019 and 09.07.2019. It was contended that the sale consideration, the area of the flat, the flat number and the parking rights were finally determined only in the year 2019 and, therefore, the earlier documents did not constitute an agreement fixing the consideration within the meaning of the proviso to section 56(2)(x)(b) of the Act.
26. Per contra, the learned Authorised Representative (AR) strongly relied upon the order of the learned CIT(A) and submitted that the relief granted by the learned CIT(A) calls for no interference. He submitted that the original allotment of the flat was made in the year 2001 and the assessee had made payment through banking channels pursuant to the said allotment. The subsequent changes in the terms of allotment were not on account of any fresh acquisition in the year 2019, but were occasioned mainly because the building plan had been revised and finalised only in the year 2019. It was, therefore, submitted that the revised allotment letters dated 17.06.2019 and 09.07.2019 could not be viewed in isolation by ignoring the original allotment, the Memorandum of Understanding and the payments already made by the assessee in earlier years.
27. The learned AR further submitted that the learned CIT(A) has rightly appreciated that the allotment letters, read with the payments made through banking channels, constituted an agreement fixing the consideration for the purpose of the provisos to section 56(2)(x)(b) of the Act. He submitted that merely because the building plan underwent revision and consequent modifications were made in the floor, flat number, parking and consideration, the original transaction could not be treated as non-existent. According to him, the essential character of the transaction remained the same, namely, acquisition of a flat originally booked with the Developer in the year 2001 and carried forward thereafter by revised allotments and eventual registration.
28. The learned AR also invited our attention to the assessment completed in the case of the assessee’s spouse, Mrs. Nisha Kshirsagar, concerning an adjacent property stated to have been acquired under materially similar circumstances. It was submitted that, in her case also, the property was acquired from the same Developer under a similar chronology of allotment, revision and registration. The explanation furnished by her was accepted by the Assessing Officer and no addition under section 56(2)(x) of the Act was made. The learned Authorised Representative, therefore, submitted that on identical facts and in the absence of any distinguishing feature, the Revenue was not justified in adopting a different stand in the case of the present assessee.
29. The learned AR accordingly submitted that the learned CIT(A), after considering the facts, the payment schedule, the provisos to section 56(2)(x)(b) and the decisions of the coordinate benches, has rightly directed that the stamp duty value as on the date of the relevant allotment should be considered and not the stamp duty value prevailing on the date of registration. He, therefore, prayed that the order of the learned CIT(A) be upheld and the grounds raised by the Revenue be dismissed.
30. We have heard the rival submissions and perused the orders of the authorities below and the material placed on record. Ground Nos. 1 to 3 raised by the Revenue are interconnected and relate to the deletion of the addition of Rs. 2,38,32,715/- made by the Assessing Officer under section 56(2)(x)(b) of the Act. The limited question for our consideration is whether, on the facts of the present case, the learned CIT(A) was justified in holding that the assessee was entitled to the benefit of the proviso to section 56(2)(x)(b), or whether the Assessing Officer was right in adopting the stamp duty value prevailing on the date of registration of the final agreement.
31. The Revenue’s principal objection is that section 56(2)(x)(b), and more particularly the proviso thereto, contemplates an agreement “fixing the amount of consideration” for the transfer of immovable property. According to the learned Departmental Representative, the earlier allotment documents cannot be treated as fixing the consideration because the allotment was revised from time to time and the final registered document was executed on the basis of the allotment letters dated 17.06.2019 and 09.07.2019. In substance, the Revenue’s case is that the consideration, area, flat number and parking were finally determined only in 2019 and, therefore, the earlier allotment letters cannot be considered for the purpose of the proviso.
32. We are unable to accept the above contention in the absolute manner in which it has been urged. The expression “agreement fixing the amount of consideration” cannot be read divorced from the commercial realities of an under-construction real estate transaction. In such transactions, the allotment may be followed by revised plans, change in floor, alteration in flat number, change in area, additional parking, statutory charges or consequential revision in consideration. Such subsequent modifications, by themselves, do not necessarily mean that the earlier allotment was non-existent or that no consideration had ever been fixed at any earlier stage.
33. In the present case, the assessment order itself records that the original allotment was made in 2001 for Rs. 70,25,000/-, that the MOU was executed on 25.06.2003 for the same consideration, and that the allotment was revised in 2009 to Flat No. 1501 on the 15th floor for a revised consideration of Rs. 1,02,80,000/-. The later revision in 2019 was recorded to have arisen due to revised building plans, whereafter the consideration was revised to Rs. 1,69,75,285/- and one further car parking slot was allotted for Rs. 5,00,000/-. The final registered consideration was Rs. 1,74,75,285/-, whereas the stamp duty value was Rs. 4,13,08,000/-.
34. Thus, this is not a case where there was no prior arrangement between the assessee and the Developer or where the consideration was left wholly uncertain till 2019. The consideration was fixed at different stages of the same continuing transaction. The revision of consideration was linked to the revision of the allotment and the building plan. The Assessing Officer has not recorded any finding that the earlier allotment dated 01.11.2001, the MOU dated 25.06.2003 or the revised allotment dated 07.05.2009 was cancelled, rescinded or abandoned. There is also no finding that the payments made by the assessee in the earlier years were refunded by the Developer.
35. The Revenue’s argument that the consideration was not fixed proceeds on the assumption that the word “fixed” means fixed once and for all, incapable of any later variation. Such an interpretation would be too narrow and would defeat the object of the proviso in genuine cases where the agreement or allotment precedes the registration by several years. The purpose of the proviso is to mitigate the hardship caused by an increase in stamp duty valuation between the date on which parties commit themselves to the transaction and the date on which the formal conveyance is registered. The statutory safeguard is that the consideration, or part thereof, must have been paid through the prescribed banking mode on or before the relevant date.
36. The learned CIT(A) has recorded that part payments were made by the assessee through banking channels. The payment schedule noticed in the appellate order shows that the assessee had paid Rs. 51,000/- on 25.10.2001, Rs. 2,50,000/- on 13.05.2009, Rs. 5,00,000/- on 30.06.2009 and Rs. 2,50,000/- on 01.04.2015, aggregating to Rs. 10,51,000/-. These payments were made much before the execution and registration of the final agreement in 2019.
37. In our view, once the assessee had a subsisting allotment, followed by an MOU, further followed by a revised allotment, and once payments had been made through banking channels pursuant to such allotment, the transaction cannot be treated as having commenced only in 2019 merely because the building plan was revised and the formal registered document was ultimately executed in that year.
38. The Assessing Officer has laid emphasis on the fact that the building plan was revised and finalised only in 2019. However, this circumstance, in our considered view, supports the assessee’s explanation rather than the Revenue’s case. It explains why the allotment terms underwent revision. It does not establish that the earlier allotment had ceased to exist. The revision in building plan was a project-related event. It cannot be used to erase the earlier rights and obligations created under the allotment and MOU, particularly when the transaction ultimately culminated in registration in favour of the assessee.
39. The earlier allotment letter also cannot be brushed aside as a mere informal document. The assessment order itself records that the Receipt-cum-Allotment Letter dated 01.11.2001 was annexed as Annexure H to the agreement dated 13.12.2019. This shows that the final registered document did not treat the earlier allotment as irrelevant or non-existent. On the contrary, the earlier allotment formed part of the chain of documents leading to the final registration.
40. The learned CIT(A) has proceeded on the correct premise that the real issue is not whether the registered agreement was executed in 2019, but whether the assessee’s earlier allotment and revised allotment, acted upon by payment through banking channels, could be regarded as agreements fixing the consideration for the purpose of applying the proviso to section 56(2)(x)(b). Having examined the chronology and the payments, the learned CIT(A) answered the issue in favour of the assessee.
41. The reliance placed by the learned CIT(A) on the decisions of the coordinate benches is also apposite. The ratio of those decisions, as applied by the learned CIT(A), is that an allotment letter issued by a builder, containing the essential terms of allotment and acted upon by the allottee by making payments through banking channels, can be treated as an agreement to sell for the purpose of the proviso to section 56(2)(x)(b). No contrary binding decision has been brought to our notice by the Revenue. The mere fact that the allotment was revised in the present case does not render the principle inapplicable, because the revisions were part of the same continuing transaction and were not shown to be the result of cancellation of the earlier transaction.
42. We also find merit in the submission of the learned AR that the case of Mrs. Nisha Kshirsagar, concerning an adjacent property stated to have been acquired under materially similar circumstances, was accepted in assessment without making an addition under section 56(2)(x). The learned CIT(A) has noticed this aspect while granting relief. While the principle of res judicata does not strictly apply to income-tax proceedings, consistency in approach is a relevant consideration where the facts are substantially identical and the Revenue has not demonstrated any distinguishing feature.
43. The addition made by the Assessing Officer rests on the adoption of the stamp duty value of Rs. 4,13,08,000/- as prevailing on the date of registration and comparison thereof with the registered consideration of Rs. 1,74,75,285/-. However, once the proviso to section 56(2)(x)(b) is held applicable, the stamp duty value on the date of the relevant allotment or agreement is required to be considered. The Assessing Officer, therefore, was not justified in mechanically adopting the stamp duty value as on the date of registration by disregarding the earlier allotment, MOU, revised allotment and payments through banking channels.
44. We are conscious of the Revenue’s submission that the final consideration underwent revision. However, as noted above, revision of consideration in the same continuing transaction cannot be equated with absence of fixation of consideration. The expression “fixing the amount of consideration” must receive a purposive interpretation. If the Revenue’s construction is accepted, every genuine allotment in an under-construction project would stand excluded from the proviso merely because subsequent revisions occurred due to changes in plans, area, floor or parking. Such an interpretation would be contrary to the object of the proviso and would lead to an unjust result in cases where the assessee had already committed to the transaction and made payments through banking channels.
45. In our considered view, the learned CIT(A) has correctly appreciated both the factual and statutory position. The assessee’s case satisfies the essential requirements of the proviso to section 56(2)(x)(b), namely, existence of an earlier arrangement fixing the consideration at the relevant stage, subsequent registration at a later date, and payment of part consideration through banking channels before such registration. The later revision in 2019 does not sever the continuity of the transaction.
46. We, therefore, hold that the learned CIT(A) was justified in deleting the addition of Rs. 2,38,32,715/- made by the Assessing Officer under section 56(2)(x)(b) of the Act. We find no infirmity in the order of the learned CIT(A) warranting interference.
47. Accordingly, Ground Nos. 1 to 3 raised by the Revenue are dismissed. Ground No. 4 is general in nature and does not require separate adjudication.
48. In the result, the appeal filed by the Revenue is dismissed.