Tribunal rules in favor of assessee: FMV based on declared value, not stamp valuation authority.

The Tribunal ruled in favor of the assessee in an appeal against the Commissioner of Income Tax (Appeals) order, concerning the assessment year 2009-10. The Tribunal held that the fair market value (FMV) of the property should be based on the value declared by the assessee rather than the stamp valuation authority assessment, as the difference was less than 10%. Citing judicial precedents, including CN Gautam vs. Union of India, the Tribunal directed the Assessing Officer to accept the declared value, resulting in a favorable outcome for the assessee against the Revenue.

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Issues involved:
Appeal against the Order dated 28.8.2015 passed by the Ld. Commissioner of Income Tax (Appeals)-V, New Delhi pertaining to assessment year 2009-10.

Issue 1: Fair Market Value Discrepancy
The assessee contested the adoption of the fair market value (FMV) of the property at Rs. 88,50,000 instead of Rs. 80,00,000 as per the sale deed. The assessee argued that the FMV should be based on the sale deed value. The AO applied Section 50C and computed Short Term Capital Gains based on the stamp valuation authority assessment, resulting in an income assessment of Rs. 43,14,230 under Section 143(3) of the I.T. Act, 1961.

Issue 2: Judicial Precedents and Valuation
The assessee cited judicial rulings, including the case of CN Gautam vs. Union of India, to support the contention that the difference between the value adopted by the Stamp Valuation Authority and declared by the assessee being less than 10% should be accepted. The assessee argued that the matter should have been referred to the Valuation Officer when the valuation was not accepted. The Tribunal referenced various decisions, including Smt. Sita Bai Khetan vs. ITO, to support the assessee's argument that a difference within tolerable limits should not result in an addition to the income.

Judgment Summary:
The Tribunal, following the precedents and judicial rulings, decided in favor of the assessee. The Tribunal noted that the difference between the valuation adopted by the Stamp Valuation Authority and declared by the assessee was less than 10%, which aligned with the decision in CN Gautam vs. Union of India. The Tribunal directed the AO to adopt the value as declared by the assessee, allowing the appeal and deciding the issues in favor of the assessee against the Revenue.

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