|CORAM:||C. N. Prasad (JM), Rajendra (AM)|
|SECTION(S):||45, 48, 50C|
|CATCH WORDS:||capital gains, stamp duty valuation|
|DATE:||January 25, 2017 (Date of pronouncement)|
|DATE:||July 24, 2017 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|S. 50C: The AO is not entitled to make an addition to the sale consideration declared by the assessee if the difference between the valuation adopted by the Stamp Valuation Authority and that declared by the assessee is less than 10%|
Considering the entire facts of the assessee’s case, the submissions of the assessee cannot be ignored. The sale consideration of these two plots sold on the same day though be separated agreements, is more than the stamp duty valuation by Rs. 3,00,00,000. Even assuming for a movement that the sale consideration in respect of Plot in survey No. 22 and 42 is less than the stamp valuation it is Rs. 33,48,284/- which is less than 10% of the stamp duty valuation of the said plot. Therefore, in view of the ratio of the decisions relied on by the assessee, the assessee should succeeded in its appeal.
The Jaipur Bench in the case of Smt. Sita Bai Khetan vs. Income Tax officer, in ITA No. 823/JP/2013 dated 27/07/2016 held as under:-
“4.2 We have heard rival contentions and perused the material available on record. We find that the Hon ‘ble coordinate Bench in ITA No. 1543/PN/2007 in the case of Rahul Constructions Vs. DCIT (Supra) has held as under:-
“We find that the Pune Bench of the Tribunal in the case of Asstt. ClT vs. Harpreet Hotels (P) LTd. Vide ITA No. 1156-1160/PnI2007 and relied on by the learned counsel for the assessee had dismissed the appeal filed by the Revenue where the CIT(A) had deleted the unexplained investment in house construction on the ground that the difference between the figure shown by the assessee and the figure of the DVO is hardly 10 per cent. Similarly, we find that the Pune Bench of the Tribunal in the case of ITO vs. Kaaddu Jayghosh Appasahebh, the Learned counsel for the assessee following the decision of the J&K High Court in the case of Honest Group of Hotels (P) Ltd. Vs. CIT (2002) 177 CTR (J&K) 232 had held that when the margin between the value as given by the assessee and the Departmental valuer was less than 10 per cent, the difference is liable to be ignored and the addition made by the AD cannot be sustained.
Since in the instant case such 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.
In the instant case, the difference between the valuation adopted by the Stamp Valuation Authority and declared by the assessee is less than 10%. Therefore, respectfully following the decision of the Hon ‘ble Coordinate Bench, we hereby direct the AO to adopt the value as declared by the assessee. This ground of the assessee is allowed”
Therefore, respectfully following the said decision we direct to AO to adopt the valuation of sale consideration as declared by the assessee. The additions made by the Assessing Officer u/s. 50C is deleted and as grounds raised by the assessee are allowed.