Kartik Buildcare Pvt. Ltd vs. Assessment Unit, Income Tax Department, Delhi

Parties Involved

Facts Summary

The assessee, Kartik Buildcare Pvt. Ltd, a private limited company engaged in construction activities, filed its income return for the assessment year 2020-21 on 28.12.2021, declaring a total income of ₹2,13,430/-. The company purchased agricultural land in Khata No. 00143, Salarpur, Tehsil-Dadri, Noida UP on 19.12.2019 for ₹60,57,000/- and incurred stamp duty and registration charges of ₹7,40,300/-. The total investment in the immovable property was recorded by the assessee at ₹67,97,300/-. The Assessing Officer (AO) observed that the value determined by the Stamp Valuation Authority for the purpose of levy of stamp duty was Rs. 1,48,06,000/-. Accordingly, the AO added the difference sum of Rs.80,08,700/- as property purchased by the assessee for inadequate consideration by applying provisions of section 56(2)(x) of the Income-tax Act, 1961. The assessee objected to this addition during the assessment proceedings, and the matter was referred to the Departmental Valuation Officer (DVO) for valuation. The DVO's report, received after the completion of assessment proceedings, valued the property at Rs. 62,04,000/-. The Tribunal found that the value declared by the assessee falls within the tolerance range of 10% of the consideration, and hence, there is no basis for the addition made under section 56(2)(x) of the Act.…

Legal Issues

• 1. Whether the ld CIT(A) was justified in confirming the addition of ₹80,08,700/- on account of investment in House property u/s 56(2)(x) of the Act in the facts and circumstances of the instant case.

Judgment Outcome

Decided in favour of Assessee.

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