| Question And Answer | |
|---|---|
| Subject: | section 56(2)(vii). Difference between actual consideration and stamp duty value |
| Category: | Income-Tax |
| Querist: | neha |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | actual consideration stamp value |
| Date: | April 30, 2023 |
- The assessee is an individual engaged in the business of real estate dealings as well as in real estate consultancy. Assessee is also a partner in various partnership firms from which he derives exempt income and also has agricultural income.
- During the year assesseehad entered into Sathekhat with land owner for purchase of land on 04.07.2015 amounting to Rs. 1,85,00,000/- and paid Rs. 1.00 crores against the said “Sathekhat” and balance amount of Rs. 85.00 lakhs to be paid at the time of execution of the registered agreement for sale of land by the land owners in the name of the assessee and when the name of the assessee is recorded on 7/12 extract of the property. Although the stamp duty value of the said property is Rs. 6,80,37,200/-, the appellant agreed to purchase this property for Rs. 1,85,00,000/-, since there is litigation in the said property which is also clearly mentioned at para 7 on page 7 of the Sathekhat .
- Meanwhile another person came to know about this litigated property and he approached the assessee and agreed to purchase the said property by executing MOU with the assessee.
- The Ld AO has made the addition in the hands of assesee on the ground that that provision of section 56(2)(vii)(b) get attracted in the case of assessee and as per the said provision, difference between market value of land at circle rate and actual consideration, which comes to Rs. 4,95,37,200/- is income of assessee, within the meaning of section 56(2)(vii) of the Income tax Act, 1961, and accordingly the Ld AO made an addition amounting of Rs. 4,95,37,200/- to the total income of assessee, under the head Income from Other Source.
- Whether action of the AO is correct since the there is litigation in the property . pl guide
The matter has to be referred to the DVO for the valuation of the property and the assessee is also at liberty to file a valuation report
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