Khadar Land Purchase Dispute: ITAT Agra Sends Section 69 and Section 56(2)(x) Additions Back for Fresh Assessment
Background: How a Property Transaction Led to Reassessment
A case before the Income Tax Appellate Tribunal, Agra, has brought into focus two frequently contested issues in property acquisition disputes — the source of investment and the appropriateness of stamp duty valuation as a benchmark. The matter concerns the purchase of immovable property at Abdulnavipur Khadar, Tehsil Mahavan, District Mathura, on 18 May 2018, and relates to Assessment Year 2019-20.
The Income Tax Department received information indicating that the assessee had acquired the property for a consideration of ₹17,72,000. Acting on this information, the Assessing Officer initiated reassessment proceedings by issuing a notice under Section 148 of the Income Tax Act, 1961, dated 24 March 2023.
What the Assessing Officer Found
As the reassessment proceedings advanced, the Assessing Officer obtained a copy of the purchase agreement through the Jurisdictional Assessing Officer (JAO). This document revealed that the actual sale consideration was ₹8,00,000, against which stamp duty of ₹1,14,100 had been paid. The figure of ₹17,72,000, which had prompted the reopening, turned out to be the stamp duty valuation of the property — not the actual price paid.
Despite being given multiple opportunities to respond, the assessee did not file any submissions before the Assessing Officer. In the absence of any explanation, the Assessing Officer proceeded to make two separate additions:
Addition under
Section 69of the Income Tax Act, 1961 — ₹9,14,100, representing the actual purchase consideration of ₹8,00,000 together with stamp duty of ₹1,14,100, treated as unexplained investment.Addition under
Section 56(2)(x)(b)(B)of the Income Tax Act, 1961 — ₹9,72,000, being the difference between the stamp duty value of ₹17,72,000 and the actual purchase consideration of ₹8,00,000.
The total quantum of disputed additions stood at ₹18,86,100.
These two additions addressed distinct concerns: the first questioned where the purchase money came from, while the second questioned whether the property had been acquired at a price significantly below its stamp-value benchmark.
First Appeal: History Repeats Itself
The assessee filed an appeal against the assessment order before the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, under Section 250 of the Income Tax Act, 1961. Unfortunately, the assessee again chose not to participate in the proceedings. The CIT(A) dismissed the appeal ex parte by an order dated 21 February 2026.
With no relief obtained at the first appellate stage, the assessee moved the Income Tax Appellate Tribunal, Agra. There was a delay of two days in filing this appeal. Noting that the delay was minimal, the Tribunal condoned it and admitted the matter for adjudication.
The Assessee's Explanations Before the Tribunal
For the first time in these proceedings, substantive explanations were offered before the Tribunal. Two distinct lines of argument were advanced.
Explanation on Source of Investment: Salaried Employment and Savings
On the Section 69 addition, the assessee submitted that she was a salaried school teacher and that the investment in the property had been made from known sources — specifically, her employment income and accumulated savings over time. The contention was that the purchase consideration and stamp duty, taken together, constituted funds that were traceable to legitimate and disclosed earnings, not unexplained wealth.
The Tribunal did not examine salary slips, bank account statements, or savings reconciliation records at this stage. It acknowledged the explanation as one that warranted factual verification rather than acceptance or rejection on the face of the grounds alone.