TMI Blog2023 (8) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... demonstrate that majority of the comparable instances picked up by the DVO himself showed that the purchase price paid by the assessee was comparable to the instances picked up by him. For this reason alone, we hold that the addition made to the income of the assessee u/s 56(2)(viib) was not justified and direct the same to be deleted. The contention of the AO is bound to accept the DVO s report, we agree with the same. But at the same time Valuation of property is only an exercise in approximate estimation. And therefore there is always scope for correction of the estimates on account of discrepancies. Assessee is well within his rights to contest the valuation, which if found justified, the appellate authorities cannot shut their eyes to the same. The decision relied upon by the DR of the hon ble jurisdictional high court in the case of Gayatri Enterprise vs. ITO [ 2019 (9) TMI 777 - GUJARAT HIGH COURT] has been rendered in a totally different context where the issue raised before the Hon ble Court was in the context of revisionary proceedings conducted by the Commissioner u/s 263 of the Act finding assessment order erroneous on account of the AO have not taxed differen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... add, amend, alter or delete any of the above grounds of appeals. Total tax effect (see note below) Rs. 7,07,500/- 3. The solitary issue in the present appeal relates to the addition to the income of the assessee in terms of section 56(2)(vii)(b) of the Act amounting to Rs. 55,91,837/-, being the amount by which an immoveable property purchased by the assessee fell short of its stamp duty value. 4. The facts relating to the case is that the assessee had jointly purchased an agricultural land at village Kadiyali, Taluka Rajula, District Amreli for a total consideration of Rs. 80,00,000/-. The stamp duty paid on this purchase of agricultural land was Rs. 9,40,000/-. The Assessing Officer accordingly calculated the fair market value i.e. stamp duty value of the property at Rs. 1,91,83,673/- and since purchase consideration was less than the aggregate fair market value of the property adopted for stamp duty valuation, he treated the difference of Rs. 1,11,83,673/- as income in terms of section 56(2)(vii)(b) of the Act. The assessee s share in the property being 50%, addition of 50% of the difference i.e. Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . I have also gone through the judgment relied upon by the appellant of Hon. Supreme Court in the case of C.B. Gautam v/s UOI 199 ITR 530 (SC) which was rendered in an entirely different context. The judgment dealt with the order by Appropriate Authority and section 269UD and thus distinguishable on facts. As such, in my considered view, the same does not help the case of the assessee which deals specifically with section 56(2)(vii)(b). Further, the relevant extract of section 56(2)(vii)(b) is reproduced as under:- ii. for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as uxceeds such consideration. The section makes it amply clear that in cases where the purchase consideration is less than the stamp duty value of the property by an amount; exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration has to be assessed u/s 56(2). In the provisions of section 56 there is no further allowance whatsoever that is permitted. In the case of the: appellant, such difference's more than 15% i.e. 15.02%. Since no allowance whatso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to the submissions in this regard before ld. CIT(A) at page no. 4 as under:- District Taluka Village Survey no Rate Amreli Rajula Kadiyali 178 308 Amreli Rajula Kadiyali 63 508 Arnreii Rajula Kadiyali 56 458 Amreli Rajula Ningala No. 1 70 108 Amreli Rajula Devka 104 115 9 He also contended that even the comparable instances which were taken by the DVO were quite largely comparable to the assessee. He drew our attention to paper book page no. 38 where the DVO had listed the comparable instances for the purpose of valuation pointing out that the rate per square meter of the comparable instances n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime lag, etc of the sale instance properties with respect to PUC and make it comparable by adjusting all advantages and disadvantages of the sale instances with the PUC the land rate of Rs. 495/- per sq. as on date 26/06/2013 is considered quite fair and reasonable. 10. His last line of argument was that even statute recognizes 10% difference in the fair market value of land and the actual purchase price of land as immaterial for the purposes of making any adjustments to the incomes of the assessee in terms of section 50C or section 56(2)(vii)(b) of the Act. He pointed out that by virtue of third proviso to section 50C of the Act inserted by Finance Act 2018,which section required substitution of the actual sale consideration received on sale of land with its stamp duty value where found higher for the purposes of computing capital gain earned on sale of land, any difference in the actual sale consideration and the stamp duty valuation to the extent of 10% was to be ignored for the purposes of treating as deemed consideration. He drew our attention to the decision of the Hon ble ITAT in the case of Amrapali Cinema vs. ACIT [2021] 127 taxman.com 376 (Delhi-Tri) hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee at Rs. 495 per square meter. The four instances are tabulated in our order above. For the sake of convenience, we are reproducing the same here again. COMPARABLE SALE INSTANCES ANNEXUTRE- A Assessee : Smt. Mumtajbanu Jivani Property: S. No. 5/2 paiki 1/2/1, Kadiyali Date Of Valuation : As on 26.06.2013 Sr. No. Location Consideration in (Rs.) Area in (Sq.m) Rate/Sq. m in (Rs.) Seller Regd. No. Purchaser Date 1 S.No.l54, Paiki 3 Kadiyali 4212000.00 10117.00 416.00 Kantilal Shah 1881 Kanjibhai Sardhara 18.10.2013 2 S. No. 187 paiki 1, Kadiyali 9083399.00 19830.00 458.00 Jalodhara Valabhai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of Rs. 495/- from the comparable instances listed by him in his report. Therefore, we see no reason for adopting the said value as the fair market value when the facts sufficiently demonstrate that majority of the comparable instances picked up by the DVO himself showed that the purchase price paid by the assessee was comparable to the instances picked up by him. 12.5 For this reason alone, we hold that the addition made to the income of the assessee u/s 56(2)(viib) of the Act to the tune of Rs. 55,91,420/- , was not justified and direct the same to be deleted. 12.6 The contention of the ld. Departmental Representative that the Assessing Officer is bound to accept the DVO s report, we agree with the same. But at the same time Valuation of property is only an exercise in approximate estimation. And therefore there is always scope for correction of the estimates on account of discrepancies .The assessee is well within his rights to contest the valuation, which if found justified, the appellate authorities cannot shut their eyes to the same. 12.7 Further, the decision relied upon by the ld. Departmental Representative of the hon ble jurisdictional high court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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