2012 (1) TMI 229 - ITAT PUNE

Challenge the valuation determined by the DVO as per the provisions of s. 50C(2) - business of construction activities/promoters - sale consideration of basement Nos. 2 and 3 as - valuation of the stamp by Departmental Valuation Officer (DVO) - fair market value (FMV) of the property - calculating the capital gain - HELD THAT:- In the instant case we find that as against the value of ₹ 28,73,000 adopted by the stamp valuation authorities, the DVO has determined the FMV on the date of transfer at ₹ 20,55,000. This itself shows that there is wide variation between the two values. Further, the value adopted by the DVO is also based on some estimate. We find that the difference between the sale consideration shown by the assessee at ₹ 19,00,000 and the FMV determined by the DVO at ₹ 20,55,000 is only ₹ 1,55,000 which is less than 10 per cent. The Courts and Tribunals are consistently taking a liberal approach in favour of the assessee where the difference between the value adopted by the assessee and the value adopted by the DVO is less than 10 per cent.

Since the difference is less than 10 per cent and considering the fact that valuation is always a matter of estimation where some degree of difference is bound to occur, we are of the considered opinion that the AO in the instant case is not justified in substituting the sale consideration at ₹ 20,55,000 as against the actual sale consideration of ₹ 19,00,000 disclosed by the assessee. We, therefore, set aside the order of the CIT(A) and direct the AO to take ₹ 19,00,000 only as the sale consideration of the property. The grounds raised by the assessee are accordingly allowed.

In the result, the appeal filed by the assessee is allowed.