Notice under section 143(3)

you need valid proof / reconcillation for the diff amount, otherwise the interest and loan will get disallowed.

U cant establish that u had paid Rs. 35 lacs as deed is showing only 20 lacs, Your stam value is lower than ur actual payment, this was done in order to avoid stamp duty.

Find out the way of disbursement of entire loan by bank,

Situation 1.

If Bank directly paid 20 lacs to the seller and rest 17 lacs to your client account, then 17 lacs could be trated as cost of improvement incurred by ur client. Rebember one thing this 17 lacs must had been disbursed after payment of 20 lacs to the seller.

Situation 2

If entire 37 lacs had been credited by the banks to the seller then it would mean bank know that 20 lacs for purchase and 17 lacs for renovation or improvement of the building. that u can establish

Hi Raju,

There are 2 issues. One is from Income Tax angle and the other from Stamp duty being short paid.

I hope you would have got sale agreement (which you would have signed) for the full value of 37 lacs... So this can act as a document to prove that the entire amount is taken for purchase of your property only.. So AO cannot add back here anything.

For the 2nd issue of Stamp duty being short paid, he will have an option of referring this to your sub registrar office... and at that point in time (when you receive another notice from sub registrar for having short paid stamp duty), you can explain the concept of improvement.

But having said that, the difference is huge (as good as double the amount), 17 lacs, so it may be difficult to claim the entire amount as cost of improvement... and you should be ready for paying some additional stamp duty..

Thanks

Sivakumar.K

HI,

NO MATTER MY FRIEND,

SHOW BALANCE SHEET TO ITO in balance sheet house property will appear by rs. 20 lakh then u have to represent sell deed to ito for CONFIRMATION.

If ito rise any question for this difference then u have to biferacate that

PYARE MY ITO JI 37 LAKH IS A MARKET PRISE AND BANK SANCTION MY LOAN ON MARKET PRISE.

I MADE MY SALE DEED AS PER CIVIL PROCEDURE CODE.

INCOME TAX DEPARTMENT COULD NOT OVER RIDE OTHER LAWS...........

enjoy my friend.........

Action can be taken against Bank by Income Tax Department for sanctioning Loan not on basis of Saledeed but on Market basis... u r also in problem because of Shortage Payment of stampduty.. Best of Luck....Duse...

you need to clarify the difference amount properly to ITO otherwise you would need to pay extra stamp duty and penalty by Registrar so collect proper documents of why sale deed of 20lacs and other amount on renovation or improvement ..