The assessee purchased a flat for Rs. 2.65 crore, while the stamp duty value was Rs. 3.79 crore. On the assessee\u2019s objection, the matter was referred to the DVO, who determined the fair market value at Rs. 2.81 crore. The AO made an addition of Rs. 16.13 lakh under section 56(2)(x) being the difference between the DVO value and the purchase consideration. The Special Bench held that once a reference is made and the DVO determines the value, such DVO valuation replaces the stamp duty valuation for all practical purposes. Since valuation is always an estimate and the safe harbour provision was introduced to mitigate hardship in genuine real estate transactions, the 10% tolerance band must be applied not only to stamp duty valuation but also to the DVO value which substitutes it. As the difference between the purchase consideration and the DVO valuation was only 6.09%, i.e., within the permissible limit, no addition could be sustained. The Special Bench answered the reference in favour of the assessee and held that the assessee was entitled to the benefit of the 10% safe harbour limit over and above the DVO valuation under section 56(2)(x).( ITA No. 4453\/Mum\/2024dt. 23-1-2026.) ( AY. 2018-19 ) \u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 56 : Income from other sources \u2013 Immovable property \u2013 Stamp duty valuation \u2013 Reference to DVO \u2013 Safe harbour tolerance band \u2013 Once DVO value substitutes stamp duty value, tolerance limit of 10% applies also with reference to DVO valuation \u2013 Amendment held curative\/beneficial \u2013 Addition deleted when difference between consideration and DVO value was only 6.09% . [S. 50C, 55A, 56(2)(x) , 143(3)] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-58961","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-fkZ","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/58961","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=58961"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/58961\/revisions"}],"predecessor-version":[{"id":58962,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/58961\/revisions\/58962"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=58961"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=58961"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=58961"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}