" IN THE INCOME TAX APPELLATE TRIBUNAL \nMUMBAI BENCH “J (SMC)”, MUMBAI \n \nBEFOR SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND \nMISS PADMAVATHY S. ACCOUNTANT MEMBER \n \nITA 84/Mum/2025 \n(Assessment Year 2018-19) \n \nSaggar Parimmal, \nA-201, Vijay Park, Mathuradas \nExt Road, Near Atul Tower, \nKandivali West, Mumbai-400 \n067 \nPAN: BKIPS7545D \nvs \nIncome Tax Officer, Ward 42(1)(5) \nKautilya \nBhavan, \nBandra \nKurla \nComplex, Mumbai-400 051 \nAPPELLANT \n \nRESPONDENT \n \nITA 85/Mum/2025 \n(Assessment Year 2018-19) \n \nKetan Kumar Sagar, \nA-201, Vijay Park, Mathuradas \nExt Road,Near Atul Tower \nKandivali West \nMumbai-400 067 \nPAN: BKIPS7342E \nvs \nIncome Tax Officer, Ward 42(1)(3) \nKautilya \nBhavan, \nBandra \nKurla \nComplex, Mumbai-400 051 \nAPPELLANT \n \nRESPONDENT \n \nAssessee by \n \n: \nShri Manoj Mundra \nRespondent by \n: \nShri Asif Karmali(SR DR) \n \n \n \nDate of hearing \n \n: \n11/03/2025 \n \nDate of pronouncement : \n 21/03/2025 \n \n \n\n2 \nITA No.84& 85/Mum/2025 \nSaggar Parimmal / Ketan Kumar Sagar \n \n \nO R D E R \n \nPER BENCH: \n \nBoth the appeal of two different assesses werefiled against the order of \ntheNational Faceless Appeal Centre (NFAC) Delhi (for brevity, ‘Ld.CIT(A)’] passed \nunder section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), for A.Y. 2018-\n19, date of order 6/06/2024 in the case of assessee/petitioner no-1 and \n21/11/2024 in the case of assessee/petitioner no-2. The impugned orders were \nemanated from the order of the National e-assessment Centre, Delhi, order \npassed under section 143(3) read with section 143(3A) and 143(3B) of the Act, \ndate of order 26/02/2021 in the case of assessee/petitioner no-1 and under \nsection 143(3) read with section 144B of the Act, date of order 28/09/2021 in the \ncase of assessee/petitioner no-2. \n2. \nBoth the appeals have same nature of fact and common issue. Therefore, \nboth the appeals are heard together and are disposed of by this common order. \nITA No.84/Mum/2025 is taken as lead case. \nITA No.84/Mum/2025 \n2.1 \nThe assessee has taken the following grounds of appeal: - \n“1. Under the facts and in law, the learned CIT(A) erred in confirming addition u/s \n56(2)(x) of the Income Tax Act, 1961 of Rs 8,90,020/-. \n1.1. Under the facts and in law, the learned CIT(A) failed to appreciate the fact \nthat variance between the Stamp Duty Value of the Property purchase and \nPurchase consideration is less than the tolerance band of 10% and hence the \n\n3 \nITA No.84& 85/Mum/2025 \nSaggar Parimmal / Ketan Kumar Sagar \n \nprovisions of Section 56(2)(x) cannot be invoked in the present case of the \nappellant.” \n3. \nThe assessee filed this appeal with a delay of 5 months. The Ld.AR \nsubmitted a condonation petition and explained that the assessee mentioned the \ncommunication address in the email “hotelsagar@ymail.com” in form 35 during \nthe filing of appeal. Whereas the Ld.CIT(A) communicated all the hearing notices \nand the appellate order in the email “cakishoredomadia@yahoo.co.in”. The said \nemail is related to the earlier Chartered Accountant of the assessee and the \nassessee has no connection with the said CA. As a result, theassessee was unable \nto get all the hearing notices and the impugned appellate order issued by the \nLd.CIT(A). Finally, the assessee was intimated by the other petitioner and after \nverification of the record, the assessee came to know about the alleged appellate \norder. After that the assesseehadtaken action and filed the appeal against the \norder of the CIT(A) before the ITAT with a delay of 5 months. The reason of delay \nis duly explained, and delay is unintentional in filing the appeal. The Ld.DR had \nnot made any objection for condonation of delay. Accordingly, the delay for 5 \nmonths in filing appeal before the ITAT is condoned and the appeal is taken for \nadjudication. \n4. \nThe brief facts of the case are that both assessees, as co-owners, jointly \npurchased a residential flat in Kandivali West, Mumbai. The registration of the \nsaid flat was completed on 01.09.2017. The declared value of the property was \nRs.2,71,11,500/-, whereas the stamp duty valuation, as determined by the stamp \nduty authorities, stood at Rs.2,88,91,540/-. Consequently, the difference \namounted to Rs.17,80,040/-. \n\n4 \nITA No.84& 85/Mum/2025 \nSaggar Parimmal / Ketan Kumar Sagar \n \n \nThe Ld. AO considered 50% of the differential amount attributable to the \nassessee's share, which came to Rs.8,90,020/-, and added the same to the \nassessee’s income by invoking the provisions of Section 56(2)(x) of the Act. \nThe Ld. AR contended that the percentage difference between the declared value \nand the stamp duty valuation was merely 6.56%. Referring to the provisions of \nSection 56(2)(x)(b)(B) of the Act, the Ld. AR submitted that, with effect from \n01.04.2021, pursuant to the Finance Act, 2020, the permissible tolerance limit \nwas increased to 10%. Earlier, the prescribed tolerance limit was 5%, which was \nsubsequently enhanced to 10% as per the Finance Act, 2020, effective from \n01.04.2021.The Ld. AR argued that, although the assessee did not fall within the \ntolerance limit specified under the Act for the relevant assessment year, various \nrulings of the ITAT have recognized that the increased tolerance limit of 10% \nshould be considered curative in nature and, therefore, applicable retrospectively. \nAccordingly, it was submitted that the addition made on account of the \ndifferential amount ought to be deleted. \n4.1 \nRelated to ITA No.85/Mum/2025 for petitioner no-2, the Ld.AR placed that \nthe Ld.AO has added back the 5% of the total consideration ofRs.2,71,11,500/- \nwhich comes to Rs.13,55,575/-. The Ld. AO considered 50% of the differential \namount attributable to the assessee's share, which came to Rs.6,77,787/-, and \nadded the same to the assessee’s income by invoking the provisions of Section \n56(2)(x) of the Act. The said findings of the Ld.AO is erroneous and against the \nsection 56(2)(x) of the Act.But the same finding of the Ld. AO is duly upheld by the \n\n5 \nITA No.84& 85/Mum/2025 \nSaggar Parimmal / Ketan Kumar Sagar \n \nLd.CIT(A) and passed his speaking order. In any case, the said addition is not \napplicable forthe petitioner no-2. \n5. \nThe Ld. DR vehemently argued and submitted that the said amendment, \nintroduced by the Finance Act, 2020, became effective only from 01.04.2021. \nAccordingly, the tolerance limit of 10% would not be applicable to the impugned \nassessment year.The Ld. DR further pointed out that, in ITA No. 85/Mum/2025, \nthe observation made by the Ld. AO regarding the assessee’s half-share, \ncalculated as 5% of the consideration amounting to Rs.2,71,11,500/-, which \ncomes to Rs.6,77,787/was erroneous and contrary to the correct application of \nSection 56(2)(x) of the Act. \nWhile we acknowledge the fair findings of the Ld. DR in this regard. The Ld. DR \nnonetheless prayed for the upholding of the addition of the difference between \nthe declared value and the stamp duty valuation of the property, as the said \ndifference exceeds the permissible tolerance limit of 5% under Section \n56(2)(x)(b)(B) of the Act. \n6. \nWe have heard the rival submissions and examined the documents \navailable on record. The issue presented before the Bench pertains to whether \nthe assessee is entitled to the benefit of the tolerance limit of 6.56%. Specifically, \nthe question is whether this tolerance limit applies to both assessees in the \nimpugned assessment years, considering the decision of the Co-ordinate Bench of \nthe ITAT-Mumbai Bench \"G\" in ACIT v. Sunil B Dalal, (2022) 145 taxmann.com \n313 (Mum Trib). The relevant paragraphs are extracted as below: - \n\n6 \nITA No.84& 85/Mum/2025 \nSaggar Parimmal / Ketan Kumar Sagar \n \n“18. We have carefully considered the rival contentions and perused the orders of the lower \nauthorities. Referred facts shows that Assessee has purchased 7 properties. Sale consideration \nin all the properties is 28,78,28,500/- and stamp duty value is Rs. 26,96,75,300/-. Thus \ndifference of Rs. 1,81,53,200/- was made by the LD AO u/s 56(2) (x) of The Act. The LD CIT found \nthat out of 7 properties in case of 6 properties the difference between the agreed consideration \nand stamp duty value is approximately 6%. In the 7th property, such difference was 14.50 %. \nTherefore, he confirmed the addition of 7th properties and deleted the addition with respect to \n6 properties holding that Proviso to section 50C inserted with effect from 1-4-2019 by the \nFinance Act 2018 allowed the tolerance band of 5%. It was held to be applicable retrospectively. \nFurther, by the Finance Act 2020 with effect from 1-4-2021 in the same proviso the tolerance \nband is replaced by increasing it to 10%. Therefore, when there is no change in the wording of \nthe proviso but only tolerance band is increased it should also apply retrospectively. \n19. Coordinate bench in case of Maria Fernandes Cheryl (supra) has already held that the \namendment made by Introducing proviso [Introduction of tolerance band of 5 % and later on \n10%] applies with effect from 1-4-2003 when the provision of section 50C were introduced. \n20. Further introduction of tolerance band is for removing the hardship in the section. once a \nstatutory amendment is being made to remove an undue hardship to the assessee or to remove \nan apparent incongruity, such an amendment has to be treated as effective from the date on \nwhich the law, containing such an undue hardship or incongruity, was introduced as held by Hon \nSupreme Court in CIT v. Alom Enterprises Ltd. [2009] 185 Taxman 416/319 ITR 306/227 CTR 417. \n21. In view of above, respectfully following the decision of the coordinate bench in Maria \nFernandes Cheryl (supra) we do not find any infirmity in the orders of the ld CIT (A) in applying \nthe tolerance band limit of 10 % in the impugned assessment year also and thereby deleting the \naddition of Rs. 1,51,20,900/-. Accordingly, Ground no 2 is dismissed. \n22. In the result, Appeal of Theld AO is dismissed.” \nThe same view was taken by the ITAT-Mumbai bench in the case ofShri Ashutosh \nSinha v. ITO, ITA No. 643/Mum/2023, Order dated 29/08/2023in favour of the \nassessee. The relevant paragraph is reproduced as below: - \n“14. On perusal of the relevant material placed on record, we find that at the very first instance, \nassessee had filed Valuation Report by the Registered Valuer, who after detailed examination \nand reasoning has valued the fair market value of the property at Rs.6,07,68,000/- which was \nRs.2,68,000/- more than the actual sale consideration shown by the assessee. Once the matter \n\n7 \nITA No.84& 85/Mum/2025 \nSaggar Parimmal / Ketan Kumar Sagar \n \nwas referred to the DVO he has taken various sale instances of similar property in the same area \nand has taken an average of sale instances would derive at the valuation at Rs.6,65,90,250/-. \nWe agree with the contention of the ld. Counsel that if the difference is less than 10% between \nfair market value and the sale consideration shown, then no addition should be made. This is so \nbecause third proviso to Section 56(2)(vii) provides reference to Section 50C for determining the \nvaluation of the property of valuation officer. The third proviso to Section 50C provides that \nwhere the value adopted or assessed or assessable by the stamp valuation authority does not \nexceed 10% of the consideration received shall be taken as full value consideration i.e. if the \ndifference is less than 10%, the same can be taken as share market value. Though this provision \nhas been brought in the statute w.e.f. 01/04/2019, however, Courts have held that the same is \nbeneficial provision, therefore, benefit should be given with retrospective effect. Thus, we hold \nthat if the difference between the actual sale consideration & FMV determined by the valuation \nofficer is less than 10%, then no addition should be made u/s.56(2)(vii)(b).” \nIn light of these decisions, we find that the amendment in question is curative in \nnature and is retrospectively applicable for impugned assessment year. \nConsequently, the assessee is eligible for the 10% tolerance limit under section \n56(2)(x)(b)(B) of the Act and the impugned addition is deleted. \nFurthermore, in ITA No. 85/Mum/2025, the Ld. AO has adopted a view that limits \nthe tolerance threshold to 5% of the total consideration. This view is wholly \nunjustified and contrary to the correct interpretation of section 56(2)(x)(b)(B) of \nthe Act. Therefore, the addition made on this account is directed to be deleted. \nWith respect to ITA No. 84/Mum/2025, we note that the CIT(A) has passed an ex \nparte order without considering the merits of the case. Since both assessees are \nco-owners of the property and the issue involved is common, we find it \nappropriate to decide both appeals in favor of the assessees. The principle of \nmutatis mutandis applies, and accordingly, the grounds raised in both appeals are \nallowed. \n\n8 \nITA No.84& 85/Mum/2025 \nSaggar Parimmal / Ketan Kumar Sagar \n \n \n9. \nIn the result, both the appeals filed by the assessee are allowed. \nOrder pronounced in the open court on 21st day of March, 2025. \n \n \nSd/- \n \n \n \n \n \n \n \nsd/- \n (MISS PADMAVATHY S.) \n (ANIKESH BANERJEE) \nACCOUNTANT MEMBER \n JUDICIAL MEMBER \nMumbai,दिन ांक/Dated: 21/03/2025 \nPavanan \nCopy of the Order forwarded to: \n \n1. \nअपील र्थी/The Appellant , \n2. \nप्रदिव िी/ The Respondent. \n3. \nआयकरआयुक्त CIT \n4. \nदवभ गीयप्रदिदनदि, आय.अपी.अदि., मुबांई/DR, ITAT, \nMumbai \n5. \nग र्डफ इल/Guard file. \n \n \n \n BY ORDER, \n //True Copy// \n \n \n \n(Asstt. Registrar), ITAT, Mumbai \n \n"