2026 (2) TMI 751

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....applying the section 50C without appreciating the facts of the case. The appellant hereby prays that the additions of Rs. 84,27,058/- made by applying provisions of section 50C of the Income-tax Act, 1961 ('Act') may please be deleted. 2. On the facts and the circumstances of the case, and in law, the honorable CIT(A) has erred and is not justified in confirming the addition of Rs.84,27,058/- made by the learned AO under the head of Long Term Capital Gain by placing reliance on DVO's report and judicial precedents since the said same suffer from various fundamental infirmities: Hence, the appellant prays that such addition may be deleted. 3. Without prejudice to the grounds numbers 1 and 2 above, the honorable CIT(A) failed to appreciate that the full value of consideration accruing as a result of transfer of the property should be the aggregate consideration paid by the buyer, i.e.: (i) monetary consideration paid to the appellant and joint owners; (ii) area consideration paid to the appellant and joint owners; (iii) monetary consideration paid to tenants/ owners/occupants enjoying the property and (iv) area consideration paid to tenants/ owners /occu....

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....f Flats/units Carpet Area in Sq. fts. Occupied % of holding in total property Landowner Mukesh V. Mehta (Assessee) Harish V. Mehta (Assessee's Brother) Late Girish V. Mehta (Assessee's Brother) 1 Flat 1,290 9.67% Owners [Original Developer Flats] Manoj Mohanlal Goradia (2 Flats) Hemal Muni Haribhai Patel Jayshreeben Sobodh Mehta 5 Flats 3,025 22.,69% Tenants 20 Flats 9,020 67.64% Total 26 Flats 13,335 100% 4.1. The Property was held jointly held by the Assessee along with his two brothers, and therefore, vide Deed of Conveyance registered on 11/03/2011 the Assessee along with his two brothers transferred the Property to Zee Infrastructure Private Limited [hereinafter referred to as the 'Purchaser'] for a consideration of INR.2.5 Crores. 4.2. For the purpose of determination of stamp duty value of INR.7.03 Crores was adopted by the Stamp Duty Authorities. Since the agreed consideration was less than the stamp duty value, the Assessing Officer adopted the stamp duty value as full value of consideration invoking the provisions contained in Section 50C of the Act and recomputed capital gains income in the ....

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....   83,23,442/- Long Term Capital Gain   84,27,058/- Total Income     As per order u/s.143(3) r.w.s. 147 dated 27/03/2014   1,51,59,460/- Less: Addition made u/s.50C 1,51,00,000/-   Addition restricted to as per DVO's report 84,27,058/- 66,72,942/-   Total Income 84,86,518/-   Rounded off 84,86,520/- 5.2. On the issue of stamp duty of INR.43,51,000/- paid to the stamp authority on Deed of Conveyance (dated 12/12/2010 registered on 11/03/2011) and the amount of INR.24,40,000/- paid to the son of their sister - Smt. Umaben Vaikunthlal Mehta [i.e. Mr. Amit Mehta], the Learned CIT(A) agreed with the Assessing Officer and did not grant any relief to the Assessee. 6. Not being satisfied with the partial relief granted by the Learned CIT(A) vide Order dated 31/05/2025, the Assessee has preferred the present appeal before this Tribunal on the grounds reproduced in paragraph 2 above. 7. During the course of hearing detailed arguments were advanced by both the sides by placing on material forming part of the Paper-Book filed by the Assessee. Both the sides have reiterated the st....

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....consideration for for Developer Flats and Tenanted Flats, respectively, from the Purchaser (i.e., Zee Infrastructure Pvt. Ltd). The valuation report submitted by DVO has valued the Property at INR.5,02,51,500/- which is the value of the entire property consisting of land and building of A, B, and C having 26 flats/units. 9.3. The above submissions were opposed by the Learned Departmental Representative. Referring to the valuation report of the DVO, it was submitted by Learned Departmental Representative that the DVO had taken into consideration all the objections raised by the Assessee and has excluded 'residential built-up area occupied by the existing tenants' (1486.62 sqm)'. Therefore, the contention of the Assessee that the value determined by the DVO was of the entire property was factually incorrect. 9.4. We note that in the valuation report prepared by the District Valuation Officer (for short 'the DVO') the ownership history of the property under consideration has been stated as under: 3.1 Ownership History One Shri. Philip Daniel Bawtis, conveyed all his undivided share, right, title and interest in the said property in favour of one Shri. Jamnadas Kherajbhai L....

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....roperty is accessible by road. 3.4 Location & Situation, Surroundings The Property is off Captain Gore Flyover, and is a middle to upper middle class locality. The property is well connected with network of roads. 3.5 Public & Other amenities The property serviced by Taxis and Public Transport system, Vile Parle railway station is within walk able distance. Ali civic and other amenities are present within 1 km radius. 3.6 Land Tenure/Other matters Freehold. 9.5. After taking into consideration the ownership history, the DVO determined the value of the property as on 01/04/1981 at INR.29,59,500/- and as on 11/03/2011 at INR.5,02,51,500/-. On perusal of methodology adopted by the DVO, we find that while determining value as on 01/04/1981, the DVO has computed Fair Market Value by taking the estimated cost of construction (determined by taking into account the year of construction) as the basis and has reduced the same by the depreciation (keeping in view the age of construction). However, for the purpose of value as on 11/03/2011, the DVO has adopted a completely different approach for determining the Fair Market Value taking the development potential of the Prop....

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.... Revised Valuation 1. Total area of land (in sqm) A 1,001.7 1,001.7 2. FSI=1 on land area, FSI, TDR=1 FSI, FSI permissible (in sqm) B 2,003.4 2,003.4 3. Residential built-up area occupied by the existing tenants (in sqm)   1,486.62 1,585.76 4. Residential built-up area to be provided to existing tenants (in sqm) C 1,486.62 1,585.76 5. Balance FSI without fungible FSI (in sqm) D (B - C) 516.78 417.64 6. Total residential built-up area to be provided by Development of building including fungible FSI for existing tenants (in sqm) E (1.35 x C) 2,006.94 2,140.78 7. Allowable total Residential Built-up area to be constructed including incentive FSI (fungible included) as freesale component in sqm F (1.35 x D) 697.65 563.81 8. FSI Rate (in INR/sqm) G 2,02,930 2,02,930 9. Cost of Construction as per Ready Reckoner, 2011 (in INR.sqm) H 15,000 15,000 10. Amount of Free Sale Component I (F x G) 14,15,74,115 11,44,14,775   Deduct for:       i. Cost of construction of Total residential bui....