ITAT Kolkata overturns tax addition on homebuyer, granting ₹11.35 lakh relief
The Kolkata Income Tax Appellate Tribunal ruled that a buyer’s tax addition of ₹11.35 lakh was unlawful, reversing a prior assessment.
The case involved a couple who signed a registered agreement on 22 January 2021 to buy an immovable property for ₹1.235 crore, matching the circle rate then in force, and paid ₹91 lakh as advance via bank transfer. The conveyance deed was executed only on 18 September 2023, by which time the stamp-duty valuation had climbed to about ₹1.462 crore. The assessing officer treated the ₹22.71 lakh gap as a taxable benefit, adding half of it - ₹11.35 lakh - to the woman’s income under Section 56(2)(x). The ITAT Kolkata held that when the purchase price is fixed earlier and part of the consideration is paid through prescribed modes, the earlier stamp-duty value applies, and therefore cancelled the tax addition.
Why it matters
It clarifies that buyers can avoid unexpected tax on property gains if they document early agreements and bank payments.
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