The Delhi bench of the Income-tax Appellate Tribunal (ITAT) spared a non-resident Indian (NRI) from paying tax related to the purchase of a flat in Mumbai, due to a delayed registry and underpayment of stamp duty. Shyamkumar Madhavdas Chugh, based in Sharjah, purchased a flat for Rs 1.82 crore, but the payment period extended over three years, during which the flat’s value increased to Rs 2.2245 crore. The assessing officer imposed an additional tax liability of Rs 40.45 lakh, but the ITAT ruled in favor of the NRI, stating that the stamp duty value at the date of the agreement in 2010 should be considered. This case illustrates how the different dates of a flat’s registration and sale deed can impact income tax calculations under the Income Tax Act.
The ITAT’s decision highlights the importance of understanding the intricacies of taxation laws, especially in cases involving non-residents and property transactions. It also underscores the significance of accurately documenting the timeline of property transactions to ensure fair and appropriate tax assessments. This ruling provides valuable insights for NRIs and others involved in similar real estate transactions, offering clarity on how the timing of property registration and sale deeds can influence tax liabilities.
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