Section 56 2 viib of IT act
I as an individual purchased a commercial property in the FY 15-16 for which the consideration was paid in cash and agreement done on 27.5.15. During filing of return of income for AY 16-17 (due on 17.10.2016), CA has raised the point saying that stamp duty value is more than agreement value so diff needs to be considered as income.
We don't mind treating difference as income and pay taxes however here is a catch.
The stamp duty value as taken in agreement (on which stamp duty is paid) is just double the actual circle rate. We don't know how the registration department had come to such value. While signing the agreement we overlooked the stamp value as taken by the department so no protest was done. In such scenario, what's the right way to proceed.
Option A) don't disclose income while filing return of income. If thats the case whether in assessment if the diff is treated as income, whether cost of acquisition of the property will be revised to actual consideration plus difference ? and the income added will be considered as capital.
Option B) If we treat the diff between the actual circle rate (substantiated by valuation certificate from local assessor) and consideration paid as income, than the case will for sure be selected for assessment. In such case what are the chances that the no further additions made.
Option 3) What's the best thing to do now when we have to file the return of income for AY 16-17 due on 17.10.16.
Your replies are really appreciated.
Thanking you all in advance.