Allotment letters fixing property consideration with prior non-cash payments qualify as agreement under provisos to section 56(2)(x)(b); stamp duty value on allotment date applies, not registration date.

ORDER

PER SANDEEP SINGH KARHAIL, J.M.

The assessee has filed the present appeal against the impugned order dated 29.10.2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2018-19.

2. The solitary grievance of the assessee is against the addition made under section 56(2)(x) of the Act in respect of two residential flats purchased by the assessee.

3. The brief facts of the case are that the assessee is an individual, and for the year under consideration, filed his return of income on 31.10.2018, declaring a total income of Rs. 6,440/-. The return filed by the assessee was selected for scrutiny, and statutory notices under section 143(2) and section 142(1) of the Act were issued and served on the assessee. On the basis of the Statement of Financial Transaction details available with the Department, it was observed that the assessee purchased two flats, namely Flat Nos. 5002 and 5003, Orchid Enclave, Wing-A, Mumbai Central, Mumbai, for a sale consideration of Rs. 2,04,50,000/- per flat. It was further observed that the Sub-Registrar assessed the value of the property on the date of registration of the sale deed for the purpose of stamp duty and registration at Rs. 2,27,01,500/- per flat. As there was a difference of Rs. 22,51,500/- between the sale consideration and the value determined by the Stamp Valuation Authority in respect of each property, the assessee was asked to show cause as to why the total difference amounting to Rs. 45,03,000/- between the sale consideration of the two flats and the stamp duty value, be not considered for addition as per the provisions of section 56(2)(x) of the Act. In response, the assessee submitted that both the flats were booked in the year 2007, and the price of the flats was also agreed between the parties in the year 2007. Thereafter, instalments were periodically made by the assessee as per the agreed terms. Thus, as per the assessee, the stamp duty value as on the date of booking of the flats should be considered for the purpose of section 56(2)(x) of the Act.

4. The Assessing Officer (“AO”), vide order dated 29.09.2021 passed under section 143(3) read with section 144B of the Act, disagreed with the submissions of the assessee and held that the Sub-Registrar had assessed the value of each flat at Rs. 2,27,01,500/- for the purpose of stamp duty and registration, therefore, the total consideration paid by the assessee for each flat, i.e., Rs. 2,04,50,000/-, was less than the stamp duty value of the property by more than Rs. 50,000/-. Thus, the AO held that the provisions of section 56(2)(x) of the Act are applicable in this case. The AO further held that the assessee did not dispute the valuation as per the Stamp Valuation Authority and, therefore, the same had become final. Accordingly, the AO proceeded to make an addition of Rs. 45,03,000/- under section 56(2)(x) of the Act to the total income of the assessee under the head “Income from Other Sources” for the year under consideration.

5. The learned CIT(A), vide the impugned order, dismissed the ground raised by the assessee on this issue and upheld the addition made by the AO under section 56(2)(x) of the Act. Being aggrieved, the assessee is in appeal before us.

6. We have considered the submissions of both sides and perused the material available on record.

7. Before proceeding further, it is relevant to analyse the provisions of section 56(2)(x)(b) of the Act, which are relevant for the adjudica