Stamp Duty Value Addition fails where agreement to sale was executed before introduction of Section 56(2)(x): ITAT

Rinki Singh v. ITO (ITA No. 56/Ran/2025)

Issue

Whether Section 56(2)(x) can be invoked where a property is registered in a later year at a value lower than stamp duty value, but the original agreement for purchase was executed before the introduction of the provision.

Facts:

1.The assessee purchased a flat in 2018 for ₹10,45,000. The stamp duty value of the property was ₹31,56,500.

2.The Assessing Officer invoked Section 56(2)(x) and added ₹21,11,500 (difference between stamp value and consideration).

3.However the flat had actually been booked in 2010 by the assessee’s husband through an agreement with the builder. Most payments had been made earlier and possession had already been given. The sale deed was executed in 2018 in the wife’s name to avail concessional stamp duty for women under a state scheme.

CIT(A)’s Order

The appeal was dismissed on a technical ground that the assessee had not paid the advance tax as required under Section 249(4) for maintainability of appeal.

ITAT Ranchi held as below:

1.Agreement for purchase was executed in 2010. Section 56(2)(x) was not on the statute book at that time.

2.Therefore, the transaction cannot be tested under a provision that did not exist when the agreement was entered into, even if the registration occurred later in 2018.

3.Accordingly, the addition under Section 56(2)(x) was deleted.

Conclusion:

1.Section 56(2)(x) cannot be invoked merely because the registration occurred after the provision came into force.

2. The relevant point of time is the agreement creating the right to acquire the property, no

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