TaxTMI 
TaxTMI 
2021 (8) TMI 271
X X X X Extracts X X X X
X X X X Extracts X X X X
....ficer (DVO) for determining the market value of the flats. However, before receipt of the report from DVO, the Assessing Officer made addition of the difference between the Stamp Duty value and the Agreement Value i.e. Rs. 12,71,500/- under section 43CA of the Income Tax Act,1961 (in short 'the Act'). Aggrieved by the assessment order dated 12/12/2018, the assessee filed appeal before the CIT(A). The CIT(A) without appreciating the facts upheld the addition made by the Assessing Officer u/s 43CA of the Act. The ld. Authorized Representative of the assessee pointed that in the impugned order, the CIT(A) has made error in mentioning the amounts in para 5.1.4. of the order. The CIT(A) in the impugned order erroneously mentioned the value of units sold in AY 2015-16. In assessment year 2015-16 similar addition was made. On account of smallness of the amount involved, the assessee accepted the addition and did not file any appeal. The ld.Authorized Representative of the assessee submitted that the DVO in his report has determined the value of the three flats at Rs. 1,03,93,000/-. The difference between agreement value and value determined by the DVO is 7% approximately. Since, t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ave perused the orders of authorities below. The solitary issue raised in the appeal by the assessee is against the addition of Rs. 10,38,000/- on account of difference in Long Term Capital Gain declared by the assessee and computed by the Assessing Officer after considering the DVO's valuation report. It is an undisputed fact that the assessee has disclosed sale consideration of the land as Rs. 1,10,00,000/-. During the scrutiny assessment proceedings reference was made to DVO for the valuation of property. The DVO vide report dated 30-12-2013 determined the fair market value of the property as Rs. 1,20,38,000/-. The difference between actual sale consideration declared by the assessee and the fair market value determined by the DVO is approximately 9.43%. We find that the Co-ordinate Bench of the Tribunal in the case of Dattatraya Kerba Lonkar Vs. Deputy Commissioner of Income Tax (supra) after considering various decisions including the decision rendered in the case of Rahul Constructions Vs. Deputy Commissioner of Income Tax (supra) and the judgment of Hon'ble Patna High Court in the case of Bimla Singh Vs. Commissioner of Income Tax (supra) has held as under: "8. We find mer....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../s 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 different is liable to be ignored and the addition made by the A.O cannot be sustained. 16. 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 bound to occur, we are of the considered opinion that the A.O. in the instant case is not justified in substituting the sale consideration at Rs. 20,55,000 as Against the actual sale consideration of Rs. 19,00,000/- disclosed by the assessee. We, therefore, set aside the order of the CIT(A) and direct the A.O. to take Rs. 19,00,000/- only as the sale consideration of the property. The grounds raised by the assessee are accordingly allowed." 9. The ld. A.R of the assessee has further placed reliance on the decision of Hon'ble Patna High Court in the case of Bimla Singh V/s. CIT (supra) wherein Hon'ble High Court has held that difference between the cost of construction shown by the assessee and as determined by the Assessing Officer being less than 15 per ce....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uty value of an asset (other than capital asset) being land or building or both is less than 10%, no addition under section 43CA of the Act is warranted. 6. Here, it would be relevant to mention that the Finance Act 2018 has inserted a proviso to sub-section (1) of section 43CA providing 5% tolerance limit in variation between declared sale consideration vis-a-vis stamp duty value for making no addition. Similar proviso was inserted by the Finance Act 2018 to sub-section (1) to section 50C of the Act. The said tolerance limit band was enhanced from 5% to 10% by the Finance Act 2020 w.e.f. 01/4/2021. The Tribunal in the case of Maria Fernandes Cheryl vs. ITO (International Taxation) reported as 123 taxmann.com 252 (Mumbai) after considering various decision and the CBDT Circular No. 8 of 2018 dated 26-12-2018 held, that the amendment is retrospective in nature and relates back to the date of insertion of statutory section to the Act. The relevant extract of the observations made by the Bench reads as under: " 7. ..................... The insertion of the third proviso to Section 50C(1) provides for this tolerance band with respect to a certain degree of variations between the sta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....itable amendment in law, the next question was what should be a fair tolerance band for variations in these values. As a responsive Government, which is truly the hallmark of the present Government, even though the initial tolerance band level was taken at 5%, in response to the representations by the stakeholders, this tolerance band, or safe harbour provision, was increased to 10%. There is no particular reason to justify any particular time frame for implementing this enhancement of tolerance band or safe harbour provision. The reasons assigned by the CBDT, i.e., "the variation between stamp duty value and actual consideration received can occur in respect of similar properties in the same area because of a variety of factors, including the shape of the plot or location," was as much valid in 2003 as it is in 2021. There is no variation in the material facts in this respect in 2021 vis-à-vis the material facts in 2003. What holds good in 2021 was also good in 2003. If variations up to 10% need to be tolerated and need not be probed further, under section 50C, in 2021, there were no good reasons to probe such variations, under section 50C, in the earlier periods as well.....