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Dec 31, 2025
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Stamp duty vs deal value: Homebuyer gets relief as ITAT Mumbai rejects addition of Rs 18 lakh income by tax dept for property valuation gap
On December 16, 2025, the Income Tax Appellate Tribunal (ITAT) Mumbai granted relief to Mr. Naik from Bhandup, regarding an income addition made by the tax department under Section 56(2)(vii)(b) The tax dept had added its 18.95 lakh to his income due to significant difference between the agreement value and stamp duty value of the property purchased by Naik.
To summarise the case, the Income Tax Department received specific information from their risk management system that Mr. Naik had purchased a property in Bhandup for Rs 81.8 lakh but no income tax return (ITR) was filed by him. Subsequently, Mr Naik was sent a tax notice under Section 148 on March 13, 2023, under the new regime of reassessment introduced by Finance Art, 2021
When the tax department asked him to explain about the details of this property purchase. Mr. Naik provided a copy of the purchase agreement and bank statement. From the documents he submitted, the income tax officer noted that the agreement value of the property is Rs 62,88,500 while the stamp duty value is recorded at Rs 81,80,500. Therefore, the difference of Rs 18,95,000 was proposed to be added under Section 56(2)(x) * 1 through a draft order under Section 144C(1).
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