When Mr Rai from Indrapuram, Ghaziabad, purchased a property for Rs 48 lakh, he claimed to have no idea that the property’s stamp duty value was Rs 58.7 lakh. However, this lack of due diligence on Rai’s part, cost him heavily as the Income Tax Department assumed that Rai must have paid the remaining amount of Rs 10.7 lakh (Rs 58.7 lakh minus Rs 48 lakh) by other means to the seller and so it escaped the tax net.
With this assumption, the income tax Assessing Officer (AO) issued a Section 148 tax notice to Rai, since he had not filed an income tax return (ITR) also. From the tax department’s eyes, they had information that Rai purchased a property worth Rs 58.7 lakh at Rs 48 lakh and had also filed no ITR. These circumstances pointed out that something must be wrong since nobody would normally sell their property below the market value.
