ITAT invalidates Deemed Gift Addition u/s 56(2)(vii)(b)(ii) based on Allotment Letter Validity

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) invalidated an addition made under Section 56(2)(vii) of the Income Tax Act, 1961, and deleted the deemed gift classification due to the incorrect valuation date. The case involved the appellant, Partha Pratim Chakrabarty, who filed his return of income on November 13, 2020, declaring total income of ₹34,44,260. The authorities had failed to consider the appropriate date for determining the fair market value of the property, leading to an unjustified addition. The ITAT found that the valuation date used by the authorities was incorrect, resulting in an invalid addition. This ruling emphasizes the importance of using the correct valuation date in tax assessments and highlights the need for accurate and fair valuation practices. Taxpayers should ensure that valuation dates are correctly applied to avoid unjustified additions.