When a property buyer from Veera Desai Road, Andheri West, Mumbai purchased a property in Pune for Rs 6.5 crore in AY 2017-18, he got into trouble with the Income Tax Department. The reason for this trouble is the stamp duty valuation for government tax purposes of this property is Rs 8.85 crore. So the Income Tax Department contended that the buyer paid less money than the stamp duty value and thus is liable to pay tax on the differential amount of Rs 2.35 crore (8.85-6.5).The buyer responded to the Income Tax Department, saying that while the sub-registrar valued the property at Rs 8.85 crore, only Rs 6.5 crore was actually paid to the seller,as documented in the sale deed. He insisted that if anybody has to be held accountable, it should be the seller for selling the property below the stamp duty valuation.Additionally, the buyer pointed out that the government had amended Section 56 2 (vii) effective from AY 2018-19, which was after his purchase, meaning that the new rules on buying property below stamp duty valuation shouldn't apply to him.The Income Tax Assessing Officer (AO) rejected all the buyer's arguments and said that since the buyer didn't challenge the stamp duty valuation, it was final, and he must pay tax on the Rs 2.35 crore difference. The AO also raised questions about the source of funds for this property and involved unexplained property investment provision under Section 69B as well.So the property buyer being unhappy with the assessment order, filed an appeal with the Commissioner of Income Tax (Appeals) [CIT(A)], who ruled in his favour and deleted the Rs 2.35-crore addition. The Income Tax Department feeling aggrieved, challenged the order before the Income Tax Appellate Tribunal (ITAT), Mumbai.Chartered Accountant Narayan Atal represented the property buyer in ITAT Mumbai. The tribunal heard the case on May 7, 2026 and ruled in the property buyer's favour on May 18, 2026.The property buyer won mainly because the Income Tax Department had failed to produce any evidence that the buyer had paid more than the Rs 6.5 crore recorded in the sale deed. The tax department relied solely on the higher stamp duty valuation of Rs 8.85 crore to allege that there was an unexplained investment of Rs 2.35 crore under Section 69B.The ITAT held that a higher stamp duty value alone is not enough to prove that the buyer paid extra money to the seller off the record. ITAT Mumbai also said that Section 69B can be invoked only if the tax department has independent evidence showing that more consideration was actually paid.ITAT Mumbai also pointed out that Section 50C, which adopts stamp duty value for capital gains purposes, applies only to the seller and can't automatically be used against the buyer.Also read: Sold property for Rs 94 lakh despite a stamp value of Rs 1.93 crore, received an income tax notice under Section 50C; ITAT Chennai grants relief for this reasonKeep reading to know the details of the case and why the property buyer won the case.Summary of the judgement and why the property buyer wonChartered accountant Suresh Surana said to ET Wealth Online that this case in ITAT Mumbai dealt with the question about whether the difference between the purchase consideration of a property and the value adopted by the state government's stamp duty valuation authority could, by itself, justify an addition as unexplained investment under Section 69B of the Income-tax Act, 1961.ITAT Mumbai observed that Section 69B (unexplained investment) can only be invoked only if the Income Tax Assessing Officer (AO) is able to prove the charge through cogent and credible evidence. So the AO needs to prove that the taxpayer has actually invested more money than what he claims to have invested in acquiring the particular asset. So in case of real estate, it usually means the buyer might have paid cash under the table to the builder but on paper shows a smaller amount. So if the AO can catch this act with evidence, Section 69B case can be build.Surana says: "Mere reliance on the higher stamp duty valuation does not satisfy this statutory requirement under Section 69B."Also read: Sold land for Rs 7.24 crore, paid no tax, received income tax notice; Know how Google Earth photos and revenue records helped taxpayer to win this case in ITAT AhmedabadMoreover, ITAT Mumbai also said that the deeming fiction contained in Section 50C is confined to the computation of capital gains in the hands of the seller and it cannot be extended to presume unexplained investment in the hands of the purchaser. So if anyone has to be caught it is the property seller not the buyer.The tax tribunal further noted that, for AY 2017-18, there was no provision enabling taxation of such differential amounts in the hands of a company purchasing immovable property, as Section 56(2)(x) extending the provision to "any person" became applicable only from AY 2018-19. Accordingly, Surana says that the addition made under Section 69B was held to be unsustainable in law.Why the property buyer wonSurana says that the tax tribunal reaffirmed that an addition under Section 69B cannot be sustained merely because the stamp duty value exceeds the actual purchase consideration.Surana says: "The Income Tax Department must establish, through independent and tangible evidence, that the purchaser has in fact paid consideration over and above the amount disclosed in the registered document."According to Surana, the tax tribunal further clarified that the legal fiction under Section 50C is limited to determining the sale consideration for computing capital gains in the hands of the transferor and cannot be imported into Section 69B to infer undisclosed investment by the purchaser.Surana says: "The ruling also recognises that, prior to the introduction of Section 56(2)(x), the statute did not authorise taxation of such differences in the hands of company purchasers."Consequently, in the absence of evidence of on-money or unaccounted investment, a higher stamp duty valuation alone cannot justify an addition under Section 69B. Thus the property buyer won the case.