TMI Blog2022 (8) TMI 848X X X X Extracts X X X X X X X X Extracts X X X X ..... r decision in the case of Rahul Constructions [ 2012 (1) TMI 229 - ITAT PUNE] where in 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 as against the actual sale consideration disclosed by the assessee - Decided in favour of assessee. - ITA NO.517/Chd/2019 - - - Dated:- 19-5-2022 - SHRI. N.K.SAINI, VP AND SHRI. SUDHANSHU SRIVASTAVA, JM Assessee by : Shri Yogesh Monga, C.A Revenue by : Smt. Priyanka Dhar, JCIT ORDER PER N.K. SAINI, VICE PRESIDENT This is an appeal by the Assessee against the order of the Ld. CIT(A)-2, Chandigarh dt. 27/03/2019. 2. Following grounds have been raised by the Assessee: 1. That the order of Learned Assessing Officer is bad, and against law and facts. 2. That the learned Assessing Officer has wrongly made addition under section 56(2)(vii)(b) of the Income Tax Act, 1961 on account of difference in stamp duty value and purchase price of the property. The Learned Assessing officer h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2 of 3,24,00,000/-) Collector Rate- Rs. 1,75,41,900/- (as per report of the DVO) Addition works out Rs. 13,41,900/- (i.e. 1,75,41,900-1,62,00,000) Rs. 19,49,100/- (i.. 32,91,000-13,41,900) Accordingly the earlier addition made of Rs. 32,91,000/- was reduced to Rs. 13,41,900/- by passing the order dt. 13/02/2018 under section 154 of the Act. 5. Being aggrieved the assessee carried the matter to the Ld. CIT(A) against the original assessment order dt. 22/12/2017 wherein the addition of Rs. 32,91,000/- was made by the AO and submitted as under; The Learned Assessing Officer had wrongly has made addition, amounting to Rs 32,91,000/-, u/s 56 (2) (vii) (b) of the Act on account of difference in stamp duty value and purchase price of the property without appreciating the fact that the price which the assessee had paid for the purchase of the property is the correct fair market value and the stamp duty value adopted by the stamp valuation authority exceeds the fair market value on the date of transfer. During the assessment year under consideration the assessee had purchased one commercial property jointly with his wif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of property, to the returned income of the assessee but on the other hand he had also referred the matter to DVO to determine the fair value of the property on the date of sale. The learned assessing officer had also mentioned in his assessment order that if the fair market value of the property is more/less than the stamp duty value of the property, then he will accordingly rectify the order. However, the assessing officer while framing the assessment order had wrongly mentioned the Section 155(15), i.e. on the basis of which he will make the rectification in his order if there is any variation in the value determined by the DVD. However, in this regard we wish to submit that since we are in appeal against the addition being made u/s 56(2)(vii)(b) to the returned income of the assessee by the AO in its order passed u/s 143(3) of the Act and since the net difference between the fair market value and the purchase price of the property is just 8.28%, you may kindly ignore the wrong section being mentioned by the learned assessing officer and allow the relief in the instant case . 5.4 The Ld. CIT(A) after considering the submissions of the assessee observed that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the valuation worked out by the DVO was at Rs. 65,82,000/- and the 50% share of the assessee came to Rs. 32,91,000/-. However, later on the AO passed the order dt. 13/02/2018 under section 154 of the Act when the DVO by considering the objection of the assessee worked out the difference at Rs. 13,41,900. The total consideration for the property was declared by the assessee at Rs. 3,24,00,000/- and his 50% share was at Rs. 1,62,00,000/- while the DVO worked out the valuation of assessee s share at Rs. 1,75,41,900/-, thus, the difference in valuation determined by the DVO and declared by the assessee was 8.28% which was less than 10%. 9.1 On a similar issue, the ITAT Delhi Bench SMC in ITA No. 6638/Del/2018 for the A.Y. 2014-15 in the case of Geetika Sachdeva Vs. ITO vide order dt. 02/12/2019(supra) held that the addition confirmed by the Ld. CIT(A) was not tenable since the difference between the sale consideration shown by the assessee and fair market value submitted by the DVO was less than 10% in the said case earlier decision dt. 12/01/2019 of the ITAT Pune Bench B in the case of Rahul Constructions Vs. DCIT in ITA No. 1543/Pn/2007 was followed wherein it was held as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a result of such transfer. (2) Without prejudice to the provisions of sub-so (1), where- (a) the assessee claims before any AO that the value adopted or assessed by the stamp valuation authority under sub-so (1) exceeds the fair market value of the property as on the date of transfer; (b) the value so adopted or assessed by the stamp valuation authority under sub-so (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, Court or the High Court, the AO may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-ss. (2), (3), (4), (5) and (6) of s. 16A, cl. (i) of sub-s. (1) a sub-ss. (6) and (7) of s. 23A, sub- S. (5) of S. 24, S. 34AA, S. 35 and S. 37 of the WT Act, 1957 (27 of 1957), shall, with necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the AO under sub-so (1) of s. 16A of that Act. Explanation: For the purposes of this section, 'Valuation Officer' shall have the same meaning as in cl. (r) of s. 2 of the WT Act, 1957 (27 of 1957). (3) Subject to the provisions contained in sub-s. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO or, as the case may be, by the Valuation Officer. 23A(7). The CWT(A) may, 24(5) The Tribunal may, after giving both parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, and any such orders may include an order enhancing the assessment or penalty: Provided that if the valuation of any asset is objected to, the Tribunal shall,- (a) in a case where such valuation has been made by Valuation Officer under S. 16A, also give such Valuation Officer an opportunity of being heard; (b) in any other case, on a request being made in this behalf by the AO, give an opportunity of being heard also to any Valuation Officer nominated for the purpose by the AO : Provided further that no order enhancing an assessment or penalty shall be made unless the person affected thereby has been given a reasonable opportunity of showing cause against such enhancement. A combined reading of the above provisions shows that the valuation adopted by the DVO is subject to appeal and the same is not final. In the instant case we find that as against the value of Rs. 28,73,000 adopted by the stamp valuation authorities, the DVO has determined the FMV on the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and perusing the material on record including the impugned order of Ld. CIT(A), we observe that in this case the assessee has disputed the fair market value of Rs. 7,21,41,500/- as per AIR information and requested before Ld. CIT(A) to refer the valuation of the property to DVO to ascertain the FMV. The Id CIT(A), accordingly, referred the matter to AO on 16.02.2016 and a final valuation report was received by the office of Ld. CIT(A) on 23.06.2016 dated 13.06.2016 according to which the FMV was Rs. 5,15,29,600/-. The Ld. CIT(A) deleted the addition on the ground that difference between the fair market value as per DVO report and agreement value comes to around Rs. 25,83,278/- which is 5.8% approximately and Ld. CIT(A) by relying on the decision of Hon'ble Supreme Court in the case of C.B. Gautam 65 taxmann 440 SC and decision of the Bombay Tribunal in the case of Krishna Enterprises vs. ACIT in ITA No.5402/M/2014 (supra) decided the issue in favour of the assessee by holding that the difference between the fair market value as per DVO and the value as per agreement is around 5.8% which is not to be considered for making addition under section 50C and thus deleted the additio ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
