Retrospective Applicability of 10% Tolerance Band Under Section 50C and Indexation from Acquisition Date Upheld

By | May 13, 2026
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Retrospective Applicability of 10% Tolerance Band Under Section 50C and Indexation from Acquisition Date Upheld

Issue

  1. Whether the 10% tolerance band for stamp duty valuation under Section 50C is retrospectively applicable and valid for Section 56.

  2. Whether the cost of inflation indexation for an under-construction property should be calculated from the year of the allotment/agreement or the year of actual payments.

  3. Whether an addition for unexplained investment under Section 69 can be sustained without verifying specific factual evidence and seller identities.

Facts

  • Property Valuation: The assessee entered into purchase transactions where the difference between the declared sale consideration and the stamp duty value was within a 10% range. The Assessing Officer (AO) made additions under Section 56.

  • Capital Gains: The assessee, a non-resident individual, purchased an under-construction flat via a registered agreement in March 2002 (FY 2001-02).

  • Indexation Claim: The assessee claimed indexation on the total cost from FY 2001-02. The AO recomputed indexation based on the dates of actual installment payments.

  • Unexplained Investment: The AO treated a portion of a property payment as an unexplained investment under Section 69. The DRP upheld this, claiming the agreement did not mention the specific individual seller named by the assessee.

Decision

  • Tolerance Band: The 10% tolerance band is applicable to purchase transactions from the time Section 50C was inserted. Since the difference fell within this 10% limit, no addition is warranted under Section 56.

  • Indexation Timing: Indexation must be computed from the year the rights to the property were acquired (the year of allotment/registration) and not based on the timing of individual installment payments. The addition of $Rs. 2.43$ lakhs was deleted.

  • Remand for Verification: The addition under Section 69 was set aside and remanded to the AO for fresh factual verification of the evidence and submissions provided by the assessee regarding the seller’s identity.

Key Takeaways

  • Retrospective Relief: The 10% variation limit between book value and stamp duty value is recognized as a “curative” provision, offering retrospective protection to taxpayers.

  • Asset vs. Payment: For capital gains, the “holding” and “cost” are tied to the date the legally enforceable right to the asset is created, regardless of the payment schedule.

  • Due Process: Additions based on factual discrepancies (like seller names in agreements) require thorough verification of all evidence before being finalized; otherwise, the matter warrants a remand.

IN THE ITAT MUMBAI BENCH ‘I’
Manjit Singh Baxisingh Dev
v.
INT Tax*
Sandeep Gosain, Judicial Member
and Prabhash Shankar, Accountant Member
IT Appeal No. 4650 (MUM) of 2025
[Assessment year 2015-16]
APRIL  6, 2026
Prashant Ghumare, AR for the Appellant. Krishna Kumar, Sr. DR for the Respondent.
ORDER
Prabhash Shankar, Accountant.member.- The present appeal arising from the order dated 06.12.2024 is filed by the assessee against the order passed by the CIT (Dispute Resolution Panel-3), Mumbai – 1 [hereinafter referred to as “CIT (DRP -3)”] pertaining to the order passed u/s. 144C(5) of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for the Assessment Year [A.Y.] 2015-16.
2. The grounds of appeal are as under:-
1. It is submitted that, in the facts and the circumstances of the case, and in law, the assessment order so framed be held as bad and illegal, as
(i) The same is framed in breach of the principles of natural justice; and
(ii) The same is perverse, passed without application of mind to the facts on record.
2. Without prejudice to the generality to the above, in the facts and the circumstances of the case, and in law, the order is bad in law as:
i. The same is passed without granting proper, sufficient and adequate opportunity of being heard to the Appellant and
ii. The order is passed without application of mind to the facts and the submissions brought on record.
3. The Hon’ble CIT (DRP-3) erred in confirming the action of the AO in making the addition of Rs. 1,16,142/-in respect of the difference between the market value (as per Index-2) and the agreement value of the property purchased, under the provisions of Section 56(2)(vii)(b) of the Income Tax Act, 1961 (the Act).
4. The Hon’ble CIT (DRP-3) erred in confirming the action of the AO in making the addition of Rs. 2,42,982/- by incorrectly applying indexation to the installments paid towards the property, rather than allowing indexation on the total cost of acquisition from the year of allotment and registration of the agreement.
5. The Hon’ble CIT (DRP-3) erred in confirming the action of the AO in making the addition of Rs. 4,99,944/- under Section 69 of the Income Tax Act, 1961, on account of alleged unexplained investment. The Appellant, therefore, submits that the addition made under Section 69 of the Act is wholly unjustified and prays for the deletion of the said addition.
3. At the outset, it may be stated that the instant appeal is delayed by 113 days. In this regard, an application for condonation of the delay alongwith an affidavit has been submitted wherein it is submitted that the assessee is aggrieved by the final assessment order passed by the Learned Assessing Officer u/s. 147 r.w.s. 144C(13) of the Act pursuant to the directions of the Hon’ble Dispute Resolution Panel (DRP). Due to an inadvertent and bonafide error, he filed an appeal against the said order before CIT(A) instead of approaching the Income Tax Appellate Tribunal. The appeal filed before the ld. CIT(A) was duly heard who passed an order deleting all the additions made by the Assessing Officer in the final order. Subsequently, he received a rectification notice under section 154 of the Act from the CIT(A) wherein it was pointed out that the appeal against the final assessment order passed u/s 147 r.w.s. 144C(13) was not maintainable before the CIT(A), and the correct appellate forum was ITAT. On receiving the rectification notice and carefully examining the facts and the legal position, immediately took steps to file the present appeal. The delay in filing the present appeal was solely on account of the above bona fide mistake and lack of clarity at the time regarding the appropriate appellate forum, which was further compounded by the fact that the ld. CIT(A) had admitted and adjudicated the appeal on merits. The delay in filing the appeal is neither intentional nor due to negligence, but purely due to a bona fide error in procedural interpretation. The assessee prayed to condone the delay in filing the appeal in the interest of justice, especially considering that he had otherwise acted diligently and in good faith. It is further submitted that if the delay is not condoned, the Appellant would suffer irreparable loss and injury, whereas no prejudice would be caused to the revenue by condoning the delay.
4. On careful consideration of the submissions of the assessee, we are of the view that the delay in filing of the present appeal was not intentional but due to unavoidable and sufficient cause. Such a bonafide mistake needs to considered libarally. In this connection, reliance could be placed on the landmark decision of hon’ble Supreme Court which inter alia held in Collector, Land Acquisition v. Mst. Katiji And Others-Collector, Land Acquisition v. Mst. Katiji 28 ELT 185/66 STC 228 (SC)/167 ITR 471 (SC) that “ordinarily, a litigant does not stand to benefit by lodging an appeal late……….Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated.Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period. A litigant does not stand to benefit by resorting to delay. In fact, he runs serious risk.” We thereforecondone the delay and proceed to adjudicate the grounds on merits.
5. Brief facts of the case are that the assessee is a Non-resident individual who purchased a flat for Rs. 22,00,000/- from „Bhoomi Evora Builders’ during F.Y. 2001-02 vide agreement dated 21.03.2002.In this case, a draft order u/s. 144C(1) of the Actwas passed on 28.03.2024 proposing addition of Rs. 8,59,068/-. Against the draft order, the assessee filed objections before the DRP which passed order u/s. 144C(5) of the Act confirming the addition. It was observed by the AO that the assessee was a non-filer for the year under consideration and had made has certain financial transaction. Since he had not filed the return of income for the year under consideration, the case of the assessee was reopened within the provisions of section 147 of the Act by issuing notice u/s 148 of the Act.
5.1 In response, he filed return of income declaring total income at Rs.71,92,790/-. On perusal of information, it was by the AO noticed that the assessee had sold a property to the tune of Rs.1,72,50,000/- during the year under consideration on which the assessee had claimed deduction u/s 54 of the Act against the Capital Gain earned on sale of property. The assessee had submitted the copy of agreement of new property and on perusal of Index-2 of the said property, it was found that the market value of the said property was Rs.51,95,000/- whereas purchase consideration paid by the assessee was Rs.50,78,858/-. Hence, in response to a show cause notice, he relied upon provision of section 50C of the Act and stated that as per section,the difference of 10% was allowable and the difference amount of Rs.1,16,142/- should not be treated as income from Other Source as per provision of section 56(2)(vii)(b) of the Act.However, the difference of Rs.1,16,142/-(51,95,000- 50,78,858) was added to the total income of the assessee under the income from Other Sources.
6. In the subsequent objection raised before DRP, the assessee contested the addition claiming that the difference amount of Rs. 1,16,142/- which was approx. 2.3% of variance. The assessee also argued before the JAO that no addition should be made u/s 56(2)(vii)(b) of the Act, if the difference between fair market value of the property and actual consideration is less than 10% of the actual consideration. He also placed reliance on several decision of various coordinate benches of Tribunal in this regard i.e. Rama Jogi Reddy Sanepalli v. ITO [IT Appeal No. 34 (Bang) of 2019, dated 15-2-2019], B.S. Sanjay (HUF) v. ITO [IT Appeal No. 1141 (Bang) of 2018, dated 4-5-2018], John Fowler (India) (P.) Ltd. v. DCIT [IT Appeal No. 7545 (Mum) of 2014, dated 25-1-2017] and Chandra Prakash Jhunjhunwala v. Deputy Commissioner of Income-tax  (Kolkata – Trib.)/ITA No.2351/KOL/2017 dated 9.8.2019. However, the DRP observed that the case under consideration was for AY 2015-16. The tolerance band of 5% was introduced w.e.f 2019-20 and the tolerance band of 10% was introduced only from AY 2021-22. Therefore, as per the prevailing position of the law in AY 201516, the benefit of the tolerance band of 5% also could not be given to the assessee. The addition of Rs. 1,16,142/- proposed by the AO u/s 56(2)( vii )( b ) of the Act was thus upheld.
7. Before us,the ld.AR has reiterated the same contentions as made before the lower authorities that he purchased a flat from one Mrs. Palvinder Kaur Kaler vide agreement dated 12.05.2014 for Rs. 50,78,858/-. The stamp duty value of the flat was Rs. 51,95,000/-.Evidently, the difference between the agreement value and stamp duty value was only 2.3% of the consideration. The Ld. DRP as well as the AO failed to appreciate that the amendment in section 56 by Finance Act, 2017 which provided a tolerance band of 5%, which was later increased to 10% by Finance Act.2020, is not just benevolent but also curative in nature. The same has been consistently held by courts to be retrospective in its nature. The assessee relied on the legal compilation submitted during the course of hearing. The ld.DR on the other hand, supported the orders of lower authorities claiming that the amendments were not retrospective and therefore, rightly rejected by them.
8. We have heard the rival submissions and examined the documents available on record. The issue presented before the Bench pertains to whether the assessee is entitled to the benefit of the tolerance limit of 2.3%. We note that the crux of the issues involved in this case revolve around the applicability of the tolerance band of 10% to the impugned transaction. In respect of the arguments raised by the ld.AR regarding the applicability of the tolerance band of 10% in respect of the purchase transactions, we find considerable force in the arguments.We are in agreement with several of the coordinate benches of Tribunal including ITAT, Mumbai wherein it is clearly held that the tolerance band of 10% is applicable right from the insertion of the provisions of section 50C of the Act in the statute books. Thus, even in the present case, for the relevant assessment year, the tolerance band of 10% would apply for the transactions under consideration. The assessee is entitled to the benefit of the tolerance band u/s.50C of the Act of 10% in respect of the declared sale consideration and the value determined by the stamp valuation authority, even for the purposes of section 56(2)(vii) of the Act since the provisions of section 56(2)(vii) of the Act invariably refer to the provisions of section 50C(2) as far as valuation of properties are concerned. Further, introduction of tolerance band is for removing the hardship in the section. Once a statutory amendment is being made to remove an undue hardship to the assessee or to remove an apparent incongruity, such an amendment has to be treated as effective from the date on which the law, containing such an undue hardship or incongruity, was introduced as held by Hon Supreme Court in CIT v. Alom Enterprises Ltd. 
8.1 As per the above facts, we note that the difference in value for all purchase transactions falls well within the tolerance band of 10% and thus in view of the same, no addition u/s.56(2)(vii) of the Act is warranted in the facts of the present case and therefore, we set aside the appellate order and direct the AO to delete the addition made u/s.56(2)(vii) of the Act, thus allowing the grounds in this regard.
9. In so far as the ground pertaining to the issue of indexation of cost is concerned, on perusal of assessee’s submission, it was observed by the AO that he had claimed index cost of acquisition for F.Y. 2001-02 in its computation of income to the tune of Rs.22,00,000/-. However, it was seen from the details provided by the assessee that the property was under construction on the date of agreement. In this regard, it was submitted by the assessee that purchase of flat in 2002 was 22 years old and it could not produce the bank statement. The AO further stated that as per the agreement for sale of property dated 21.03.2002, amount of Rs.51,000/- was mentioned as received before execution of agreement and balance amount of Rs.21,49,000/- was to be received in instalment as per work plan mentioned in agreement. It was submitted that as per agreement, it was 24 years old and considering that the purchase registered agreement itself was a good proof towards the purchase of flat. The assessee had submitted proof of loan taken in 2002. As per said certificate, loan was sanctioned on 11.10.2002. and only payment of Rs. 51,000/- only was made in F.Y. 2001-02. Loan was disbursed in F.Y. 2002-03 and even registration was made on 09.04.2002. As per sale deed of the above property at the time of sell during the year under consideration, it was seen that the society was formed on 17.12.2003. The AO observed further that in Maharashtra, society work is being done within 18 month of the completion of project and considering that the assessee has paid Rs.18lac from loan during F.Y. 2002-03, the year for index cost of acquisition for balance amount of Rs.21,49,000/- was taken F.Y. 2002-03 instead of F.Y. 2001-02 as claimed by the assessee. Accordingly, index cost of acquisition was reworked at Rs.50,45,281/- in place of claimed index cost of acquisition of Rs.52,88,263/-. Hence,the difference amount of Rs.2,42,982/- was disallowed and added to the total income of the assessee under the head Income from Capital Gain.
10. The hon’ble DRP observed that the assessee purchased a residential property in the F.Y 2001-2002 amounting to Rs. 22,00,000/- and the agreement was registered on 31.03.2002. The property purchased was an under-construction property and the payment schedule was mentioned in the agreement. Further, the assessee had obtained a bank loan of Rs. 18,00,000/- which was disbursed in the financial year 2002-2003. The JAO had given the benefit of indexation from the year of actual payment of instalment. As per JAO, indexed cost of acquisition was Rs. 50,45,281/-. Thus, JAO made proposed addition of Rs. 2,42,982/-. The assessee before him relied on the decision in the case of Divine Holdings (P.) Ltd. v. Dy. Commr. of Income-tax [IT Appeal No.6423 (Mum) of 2008, dated 30-9-2010] according to which he was entitled to the benefit of indexation on the total cost of acquisition from the year of allotment of flat dehors the fact that assessee had paid instalments over a period of time subsequent to the date of allotment. He placed reliance on the case of in case of Nitin Parkash v. DCIT (ITAT Mumbai) wherein it was inter alia held that as per section 2(14) read with section 2(14)(iv) of the Act, the rights in flat, acquired by the assessee on execution of purchase agreement on come within the purview of the term „capital asset’. From the perusal of language used in Explanation (iii) to section 48 of the Act, which provides for manner of computation of indexed cost of acquisition, it is apparently clear that it refers only to cost of acquisition and not actual payments made by the assessee, hence, there is no merit in the alternate contention of the revenue that the benefit of indexation should be given on the basis of dates of actual payments made by the assessee. Reliance was also placed on Smt. Lata G. Rohra v. Dy. CIT [2008] 21 SOT 541 (Mumbai), Divine Holdings (P.) Ltd. (supra), Pooja Exports v. ACIT [IT Appeal No. 2222 (Mum.) of 2010, dated 15-7-2011] and ACIT/CIT v. Ramprakash Bubna [IT Appeal No. 6578 (Mum) of 2010]. The DRP however, rejected the objection with the observations that the assessee had himself admitted in his submissions that the bank loan of Rs. 18,00,000/- for purchase of the property was disbursed only in FY 2002-03. The AO has also worked out the indexed cost of acquisition keeping this fact into account. Thus, the action of the AO in proposing an addition of Rs. 2,42,982/- was upheld.
11. The Id. DR on the other hand, strongly relied on the order of the authorities below. He submitted that there was no asset held by the assessee on the date of agreement which is only on performance of certain conditions. No title, either tangible or intangible, had passed on to the assessee.
12. We have carefully considered all relevant facts of the case.It is evident that the AO had adopted cost of indexation based on the actual date/year of payments while the assessee has considered the date/year of agreement. We notice that the assessee placed reliance on various coordinate bench decisions on the issue involved none of which have been considered or distinguished by the DRP. In this regard, we extract below relevant parts of the order of ITAT, Mumbai Bench in the case of Divine Holdings Pvt. Ltd. (supra):
“We have considered the rival submissions made by both the parties, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. There is no dispute to the fact that the agreement for purchase of the flat is dated 3001-1992 which is evident from the copy of the agreement placed at paper book page 50 to 82. There is also no dispute to the fact that the price of the flat as per the agreement was Rs.1,73,75,000/- over and above the premium of Rs.1,34,75,000/- which is payable to the Govt. of Maharashtra as per page 8 of the said agreement (paper book page 57). According to the AO, the indexation should be on the basis of the actual payment, whereas, according to the assessee, the indexation is to be on the basis of the date of agreement. We find the Co-ordinate Bench of the Tribunal in the case of Smt. Lata G. Rohra (supra) has held that under the provisions of sec. 48benefitof indexation should be given on the basis of date of cost of acquisition of asset and not on the basis of dates of actual payments made. Similarly, the Ahmedabad Bench of the Tribunal in the case of Smt. Kashmiraben M. Parikh (supra) has held as under :

“……..The right in any immovable property which has already been constructed or is yet to be constructed is a capital asset which admittedly was acquired by her in November, 1978. The mere fact that possession of the flat was received in February, 1981 would not lead to the conclusion that the assessee became entitled to such rights in the flat only in the month of February, 1981 when possession was taken. The possession was taken by her pursuant to the booking made in November, 1978 and in accordance with the agreement executed in the month of March, 1979. It is thus obvious that the assessee acquired right in the said property more than three years before its transfer made on 1st November, 1983. The capital gains derived by the assessee has, therefore, rightly been treated by the CIT(A) as a long-term capital gain.”

12.1 Similarly, the Lucknow Bench of the Tribunal in the case of Sharad Thandani (supra) has held that legal possession in the form of agreement of allotment of flat and not actual physical possession is relevant for deciding whether capital gain is long-term or short-term.
12.2 Similarly, we find the Hon’ble Bombay High Court in the case of Vimal Lalchand Mutha (supra) has held as under :

“Held that the assessee had entered into an agreement for the purchase of a flat in November, 1977, and had executed a formal agreement in December, 1978. She transferred her right, title and interest in the flat by an agreement to C in April, 1983. The Tribunal was, therefore, right in holding that the rights under the said two agreements of November, 1977/December, 1978, had been held for more than 36 months and that the gains arising from the transfer of her rights under the agreement in April, 1983, constituted long-term capital gains. No question of law arose from the order of the Tribunal.

12.3 We find the Hon’ble Punjab & Haryana High Court in the case of Ved Prakash & Sons (supra) has held as under :

“A perusal of section 2(42A) of the Income-tax Act, 1961, as it stood at the relevant time makes it clear that a capital asset would be deemed to be a short-term capital asset in case such a capital asset is held by the assessee for not more than 24 months immediately preceding the date of its transfer. Emphasis is upon the words “held by an assessee”. The word “owner” has designedly not been used by he Legislature. The word “hold”, according to the dictionary, means to possess, be the owner, holder or tenant of (property, stock, land.). Thus, a person can be said to be holding the property as an owner, as a lessee, as a mortgagee or on account of part performance of an agreement, etc. The assessee entered into an agreement for purchase of a flat in New Delhi on May 29, 1970. Pursuant to the agreement he was put in possession of the flat on the same date. According to the stipulation, the assessee was to pay the amount due in instalments and the final amount was paid on February 10, 1973. The assessee sold the property on February 10, 1973, and claimed that the gains arising from the transfer were long-term capital gains. His claim was accepted by the Tribunal.

Held, that the Tribunal was right in law in holding that the capital gain was a long-term capital gain.”

In view of the decisions cited above, we are of the considered opinion that the assessee is entitled to indexation benefit on the NCPA flat from the date of agreement and not on the basis of actual payment. The order of the CIT(A) on this issue is accordingly set aside and the ground raised by the assessee in ground no.4 is allowed.”
12 .1 In the light of the above discussion and respectfully following the decisions referred above, we are inclined to agree with the proposition of the assessee. Accordingly, allowing the ground of appeal in this regard, we direct the AO to delete the addition made.
13. The last issue pertains to the addition as Unexplained Investment u/s 69 of the Act. During the year, the assessee had purchased an immovable property worth Rs.50,78,856/- on 12.05.2014on which deduction u/s. 54 of the Act, was claimed. According to the AO, the assessee had submitted proof of payment to the tune of Rs.45,78,914/- only while the balance the payment of Rs. 15,50,000/- was claimed to have been only made by his father-in-law. The AO observed that the assessee did not furnish relevant details of investment to the extent of Rs. 4,99,944/- which was treated as Unexplained investment u/s 69 of the Act.
14. Before the DRP, the assessee claimed that he had submitted bank statements as documentary evidence for the source of such investment. However, due to bank statements older than 10 years and banks refused to share the documents as it was more than 10 years, shortage of time and time barring issue, the assessee was not able to submit bank statement for the source of investment to a tune of Rs. 4,99,944/-. The assessee was able to locate the bank statement showing the amount received from his father-in-law as loan and paid to the buyer for purchase of flat. The bank statement was attached with a request to delete the addition. The assessee prayed to the appellate authority to admit such additional evidences now been filed which could not be filed during the course of assessment.
15. During the course of the DRP proceedings, the assessee furnished the copy of the bank account of his father-in-law Sh. Sarabjit Singh Goraya who had made a payment of Rs. 5,00,000/- directly to the so called seller Ms. Palwinder Kaur Kaler. The additional evidence was forwarded to the AO for comments. The AO in his remand report stated that in the absence of any written explanation, the nexus between Sh. Sarabjit Singh Goraya, the assessee and Ms. Palwinder Kaur Kaler could not be established. In his rejoinder, the assessee submitted the confirmation from Sh. Sarabjit Singh Goraya and also submitted a copy of the Purchase agreement dated 31.03.2002.
15.1 After going through the facts of the case and the submissions of the assessee, the Panel observed that the Purchase Agreement for the purchase of the impugned property was between M/s Bhoomi Evora Builders and the assessee. It nowhere mentioned the name of any Pulwinder Kaur Kaler as the seller. Thus, the AO was correct that no nexus could be established between Sh. Sarabjit Singh Goraya, the assessee and Ms. Palwinder Kaur Kaler. The explanation given by the assessee appeared to be just an afterthought. Thus, the Panel saw no infirmity in the order of the AO in treating the sources of investment in the property to the extent of Rs. 4,99,944/- as unexplained. The action of the AO in proposing an addition of Rs. 4,99,944/- was upheld.
16. In the course of hearing before us, the ld.AR vehemently contested the above conclusion claiming that the assessee purchased a flat for Rs. 22,00,000/- from ‘Bhoomi Evora Builders’ during F.Y. 200102 vide agreement dated 21.03.2014.He purchased a flat from one Mrs. Palvinder Kaur Kaler during the F.Y. 2014-15 corresponding to the relevant assessment year in question 2015-16. The father-in-law of the Mr. Sarabjit Singh Goraya, on behalf of the Appellant, paid a sum of Rs. 5,00,000/- to the seller Mrs. Palvinder Kaur towards the purchase of this flat.He placed on record the bank statement of Mr. Sarabjit Singh Goraya categorically highlighting the payments of Rs. 4,50,000/- and Rs. 50,000/- made by him to Mrs. Palwinder Kaur Kaler. The assessee obtained and placed corroborative evidence on record in the form of a letter from Mr. Sarabjit Singh Goraya confirming the afore-mentioned factual aspect. He placed on record a copy of the purchase deed categorically mentioning that Mrs. Palwinder Kaur had received Rs. 50,000 and Rs. 4,50,000/- towards the sale of the flat. The agreement also recorded the relevant cheque number corresponding to payment of Rs. 4,50,000/-. The relevant cheque mentioned in the purchase agreement could be reconciled with the bank statement of Mr. Sarabjit Singh Goraya.
16.1 It is contended that the Ld. DRP, while adjudicating upon this issue, erroneously perused the purchase deed of F.Y. 2001-02 corresponding to purchase of flat by the assessee from ‘Bhoomi-Evora Builders’, instead of considering the purchase deed of relevant F.Y. 2014-15 corresponding to purchase of flat by the Appellant from Mrs. Palvinder Kaur Kaler. As such, the Ld. DRP while giving directions to A.O. failed to appreciate the nexus of payment of Rs. 5,00,000/- by Mr. Sarabjit Singh Goraya to Mrs. Palvinder Kaur Kaler towards the purchase of the flat on behalf of by the Appellant.
17. On careful consideration the above contentions, it appears that the matter involves only a factual verification of the impugned issue qua the submissions and evidence furnished by the assessee before the DRP which is stated to have considered a different evidence while rejecting his objections. Therefore, in the interest of justice and fairplay, we set aside the order in this regard and remand the matter to the file of the AO for necessary factual verification, after allowing adequate opportunity of hearing to the assessee. Accordingly, the ground in this regard is allowed for statistical purposes.
18. In the result, the above appeal of the assessee stands allowed.