Section 56(2)(vii)(b) of I.T. Act 1961
I had booked an under construction residential property in mumbai in 2010. the registration of the same was done in 2013. at the time of purchase of the property in 2010 the ready reckoner rates were less than the reckoner rate in 2013, hence i could book the property at an economical rate. when i got the property registered. since i have paid the stamp duty as per the reckoner rates in 2013, i have received a notice from the It department under Section 56(2)(vii)(b) of I.T. Act 1961 explaining why the difference of amount should not be added in my income. some body please guide what can be done of this situation.
Asked 1 year ago in Property Law from Greater Mumbai, Maharashtra
1) you have to in your reply mention that flat was booked in 2010 .enclose documentary evidence of payment made and allotment letter issued by the builder . mention that sale deed was regd by builder in 2013 at consideration agreed with the builder in 2010 .
2)you have not reproduced the contents of the show cause notice issued by department
3)it is necessary to peruse notice to advise further
'Fair market value' (FMV) of a property, shall be determined in accordance with Rules 11U and 11UA of the Income Tax Rules as provided in Explanation to section 56(2)(vii).
t was held by the Supreme Court in the case of CIT vs Dalmia Investment Co. Ltd. [TS-4-SC-1964-O] that “bonus shares are shares received 'without payment' and not 'without consideration'.” Thus, it is possible to take a view that section 56(2)(viia)(i) is not attracted in case of receipt of bonus shares by a shareholder.
You may take protection under this umbrella.