The record
Written from the 1 report below. Nothing here is unsourced.
- A Mumbai taxpayer and his wife jointly bought a flat in Chembur in 2017 for Rs 60 lakh, while its stamp-duty value was Rs 94.8 lakh, creating a Rs 34.8 lakh difference.
- The tax officer added the entire difference to the husband's income under Section 56(2)(x)(b), partly because the wife's case had escaped scrutiny, even though the couple owned the flat in clearly defined shares of 41.08% and 58.92%.
- ITAT Mumbai ruled that joint ownership does not justify taxing one co-owner on the full stamp-duty gap, and that the officer should also have referred the disputed valuation to a departmental valuation officer, especially since the building lacked an occupation certificate.
- The tribunal has remanded the matter to the assessing officer for fresh consideration, so the final taxable amount remains undecided.
What to watch next
- Fresh assessment by the Income Tax officer, including whether the difference is split according to the couple's ownership shares.
- Whether the case is referred to the departmental valuation officer to reassess the property's fair market value.
- Any similar action against the wife, whose share of the difference was not taxed earlier.
Who said what1
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Income Tax Appellate Tribunal
1 quote · 1 outlet
“Merely for the fact that no action was taken by the Department in the case of his wife for taxing the difference to the extent of her share, there could be no justification to add the entire difference in hands of the assessee (husband)”
In the article
…held that the tax officer could not have added the entire Rs 34.8 lakh difference to the husband’s income while disregarding the fact that the property was jointly owned by him and his wife in clearly defined shares. “ Merely for the fact that no action was taken by the Department in the case of his wife for taxing the difference to the extent of her share, there could be no justification to add the entire difference in hands of the assessee (husband) ,” it said. The husband had also disputed the valuation and sought a reference to a departmental valuation officer (DVO). The tribunal agreed that this request should have been considered. It observed that once the…
Coverage1
All filed from India
Named India · Commissioner of Income-tax · Income Tax Appellate Tribunal · Income Tax Department
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