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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether, for the purpose of section 43CA, the safe harbour tolerance band is to be tested with reference to the valuation determined by the Departmental Valuation Officer once such valuation substitutes the stamp duty valuation.
Analysis: The assessee had sold immovable properties for consideration below the stamp duty valuation and the matter was referred to the Departmental Valuation Officer. The Tribunal followed the Special Bench ruling that, where the Departmental Valuation Officer's valuation replaces the stamp duty valuation, the deeming fiction under section 43CA must operate to its logical end and the tolerance band is to be applied with reference to the Departmental Valuation Officer's valuation. On the comparative figures, the difference between the agreement value and the Departmental Valuation Officer's valuation in each transaction was within the prescribed margin.
Conclusion: The benefit of the safe harbour proviso is available with reference to the Departmental Valuation Officer's valuation, and no addition under section 43CA survives where the variation remains within the tolerance band.
Ratio Decidendi: Once the Departmental Valuation Officer's valuation substitutes the stamp duty valuation, the safe harbour threshold under section 43CA must be applied against that substituted valuation, and marginal differences within the prescribed limit do not warrant addition.
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