The Income Tax Appellate Tribunal (ITAT), comprising Vice President SaktiJit Dey and Accountant Member G. M. Doss has held that the enhanced 10% tolerance limit for difference between stamp duty value and actual purchase consideration is curative in nature and applies retrospectively. The Tribunal accordingly deleted an addition of ₹3,77,840 made under Section 56(2)(vii)(b) of theIncome-tax Act, 1961.
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The Authorised Representative submitted that the variation in the present case was approximately 6.2% of the stamp duty value and about 6.6% of the consideration, and therefore fell within the 10% tolerance band.
The Departmental Representative (DR) supported the orders of the lower authorities and the addition made under Section 56(2)(vii)(b).
The Tribunal observed that the variation of approximately 6.2%–6.6% was within the 10% tolerance band. Relying on Padmavati Developers, the Tribunal held that the enhanced tolerance limit introduced by the Finance Act, 2020 is curative and intended to remove hardship caused by marginal, bona fide variations between purchase consideration and stamp duty valuation.
Following the coordinate Bench decision, the Tribunal held that the variation in the present case fell within the protected 10% band. It noted that the variation was lower than that considered in Padmavati Developers and found no material distinction warranting a different view.
Accordingly, the Tribunal set aside the CIT(A)’s order and directed the AO to delete the addition of ₹3,77,840. Ground No. 1 was allowed. The remaining grounds were rendered academic or infructuous.
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Nandkishor Shantaram Kadam vs Income Tax Officer, Ward 42(2)(4), Mumbai
CITATION : 2026 TAXSCAN (ITAT) 1369Case Number : ITA No. 6911/Mum/2026Date of Judgement : 08 September 2026Coram : G.M.DOSS, ACCOUNTANT MEMBERCounsel of Appellant : Sruti KalyanikarCounsel Of Respondent : Shree Kumar C
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