ITAT Deletes Addition u/s 56(2)(x); Holds Sale Price Below Stamp Duty Value Justified Due to Title Dispute, Variation Within 5% Threshold

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) has deleted a tax addition made under Section 56(2)(x) of the Income Tax Act. This section taxes the difference if a property is sold for a price lower than its stamp duty value. In this case, the ITAT accepted the assessee's argument that the lower sale price was justified due to a long-standing dispute over the property's title, which significantly reduced its marketability and fair value. The tribunal also noted that the variation between the sale price and the stamp duty value was within the 5% tolerance threshold allowed by the law. The ITAT concluded that when there are genuine, compelling reasons like a title dispute that affect a property's value, a mechanical application of Section 56(2)(x) is not warranted, providing a major relief to the taxpayer.