ITAT deletes ₹3.77 lakh addition, holding 10% tolerance band between stamp duty value and consideration is curative and applies retrospectively.
ITAT Holds 10% Stamp Duty Tolerance Band Is Curative and Retrospective
The Income Tax Appellate Tribunal (ITAT) has deleted an addition of ₹3.77 lakh, ruling that the 10% tolerance band between the purchase consideration and the stamp duty value—introduced under Section 50C—is curative and retrospectively applicable. The case involved a 6.2% to 6.6% variation, which the Tribunal held falls within the deemed acceptable range.
The Assessing Officer had invoked Section 50C to treat the stamp duty value as the deemed sale consideration, arguing the transaction value was undervalued. However, the ITAT noted that the Finance Act, 2017, and subsequent clarifications, permit a 10% variation as immaterial, and judicial precedent supports treating such amendments as remedial in nature.
Where the amendment is procedural or curative, it applies retrospectively to ensure fair treatment of taxpayers in pending proceedings.
The decision affirms that minor variations below 10% cannot be the sole basis for enhancement under Section 50C. Practitioners should invoke this tolerance in appeals involving property transactions, even for assessments prior to the formal codification of the limit.
Citations
- Section 50C, Income Tax Act, 1961
