TaxTMI 
TaxTMI 
2025 (2) TMI 1659
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....u/s 143(3) of I.T. Act 1961 is illegal, invalid and bad in law. 4. The addition made by A.O. and upheld by CIT(A) at Rs. 43,68,851/- u/s 43CA of I.T. Act 1961 in respect to Wanadongri Project is unjustified, unwarranted and bad in law. 5. The learned A.O. erred in making addition and upheld by CIT(A) at Rs. 43,68,851/- on account of difference in sale consideration received and stamp duty valuation as business income u/s 43CA of I.T. Act 1961. 6. The addition made by A.O. and upheld by CIT(A) at Rs. 1,40,080/- u/s 43CA of I.T. Act 1961 in respect to Plot No.270 is unjustified, unwarranted and bad in law. 7. The learned A.O. erred in making addition and upheld by CIT(A) at Rs. 1,40,080/- u/s 43CA of I.T. Act 1961 on account of difference in sale consideration received and stamp duty valuation as business income u/s 43CA of I.T. Act 1961. 8. The assessee denies liability to pay interest under section 234A, 234B and 234C of I.T. Act 1961. Without prejudice, levy of interest under section 234A, 234B and 234C of I.T. Act 1961 is unjustified, unwarranted and excessive. 9. Any other ground that shall be prayed at the time of hearing." ....
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.... D) Difference at less than 15% can be reasonably considered on account of estimation and needs to be ignored for section 50C, 43CA and 56 is consistent judicial view on the subject. Reliance on: i) 96 DTR 0308 (Mum.) Suresh C. Mehta vs. ITO (P-16-20) (20) ii) (2009) 308 ITR 0071 (HC) Bimla Singh vs. CIT (P-11-15) (14, 15) 8. Insofar as the addition at 1,40,080, under section 43CA of the Act is concerned, the learned Counsel for the assessee submitted the sale proceeds of Plot No.270 is at Rs. 8,65,920, and value for the purposes of levy of stamp duty is Rs. 10,06,000. The difference in value at 1,40,080, is 13.92%. Stamp duty value is not fair market value. He further submitted that assessee having claimed that assessee has sold plot at fair market value addition made without making reference to Valuation Officer is bad in law and unsustainable. 9. The learned Counsel for the assessee further submitted that the objections were filed before Valuation Officer. Various objections have not been dealt with in the valuation report of DVO. Difference at 12.74% is within tolerance band of less than 15% as per judicial precedents. Difference is on account of esti....
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....on Officer. The Assessing Officer has also made addition in respect to Plot No. 270 at 1,40,080, under section 43CA of the Act, which computes at 13.92% of ready recknor value at 10,06,000. In respect to this no reference is made to Valuation Officer. The Assessing Officer has thus made aggregate addition of above two sums at 45,08,931, in the assessment framed. 15. The Valuation Report of the Valuation officer has been placed in the Paper Book at Page-9 & 10. It is evident from report that the Valuation Officer has valued the fair market value of plots sold by segregating total land area in three parts and applying independent rates in the vicinity of 5,000 to 6,100 per square meter. The Valuation Officer has not based the estimated value on any comparable sale instances and it is pure estimated value. It is noted that in the same layout variation value of plot interse in the report of Valuation Officer is 18.03%. The assessee has submitted objections on estimated valuation before Valuation Officer and same are placed at Page-51 & 52 of the Paper Book. The Valuation Officer has not dealt with the objection of the assessee submitted before the Valuation Officer in his report of ....
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....filed under section 139(1) on 05/10/2017, as return filed in compliance of the notice under section 148 of the Act. Accordingly, notice under section 143(2) was issued on 16/12/2021, and notices under section 142(1) of the Act were issued, calling for information to the assessee from time to time and served upon assessee. The Assessing Officer examined the impounded documents and found that page no.6 to 24 of Annexure A 2/35 is copy of sale deed dated 31/05/2016 of land at Khasra no.83, Mouza Dongargaon, P.S.K. 73, having area of 2.63 hectares, Nagpur between the assessee and M/s. Tirupati Developers. As per the sale deed, value of the immovable property adopted by the stamp duty authority is 7.20 crore whereas the sale consideration paid by the assessee is only 3.50 crore, and thus there was a difference of 3.70 crore between the market value of the property adopted by Stamp Duty Authority and the actual sale consideration attracted the provision of section 43CA of the Act. Thus, the Assessing Officer completed the assessment vide order dated 24/03/2022, and has made the addition of 57,68,020, under section 43CA of the Act. The Assessing Officer has thus determined the total loss ....
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....f the property was assessed at Rs. 8,82,68,020/-by the Departmental Valuation Officer (DVO) on a reference made by Assessing Officer. The detail of the transaction is summarized as under: Sr. no. Particulars Rupees 1. Actual Sale Price 825,00,000 2. Stamp Duty Valuation 13,49,20,000 3. Valuation as per DVO 8,82,68,020 2. The immoveable property sold was an agricultural land with following Khasara Number: a) KH.No.85/1&85/2 b) KH.No.72 c) KH. No. 83 3. MOU for the sale of the property between the Assessee and the buyer (M/s. Tirupati Developers) was done by single agreement on 20/07/2015. The copy of the same was submitted during assessment proceeding as well as during appellate proceeding before CIT(A). The MOU between the Assessee and buyer is not in dispute. 4. The property with above Khasara Numbers was purchased by the Assessee from M/s. Grace Realities (India) Pvt Ltd by single sale deed only on 14/08/2013. The copy of the purchase deed was submitted during assessment proceeding as well as during appellate proceeding 5. The property purchased by the Assessee was....
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....ancial years as per prudent commercial consideration and have also been sold a single purchaser. The transactions are not independent and should be viewed as a whole on an aggregate basis to have a holistic view. The details of transactions of an aggregate basis are summarised as under: S.no. Particulars Amount() 1. Actual Sale Price Rs. 8,25,00,000 2. Stamp Duty Valuation Rs. 13,49,20,000 3. Valuation as per DVO Rs. 8,82,68,020 4. In view of the valuation as per DVO being lower than the stamp duty valuation, the comparison has to be made between actual sale price and the valuation as per DVO. The difference is Rs. 57,68,020. Such difference is 6.99% of the actual sale price. The difference within tolerance band of 10% and the application of such band will relate from 01/04/2014. The case of the assessee is covered by the order dated 02/07/2021, passed by the Coordinate Bench rendered in Stalwart Impex Pvt. Ltd. v/s ITO, ITA no. 5752/Mum./2019, for the assessment year 201617. There relevant part of the order is reproduced below:- Both sides heard, orders of authorities below examined. The solitary issue as sailed by the assessee....
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.... "8. We find merit in the submission of Ld. A.R. the difference between the fair market value determined by the DVO and actual sale consideration is Rs. 7,14,530/- i.e slightly more than 2 per cent of the sale consideration. The co-ordinate Bench of the Tribunal in the case of Rahul Construction V/s. DCIT (supra) has held that where difference between the sale consideration declared by the assessee and fair market value as determined by the DVO u/s 50C is less than 10 percent, the Assessing Officer was not justified in substituting the value determined for sale consideration disclosed by the assessee. The Co-ordinate Bench after considering the provisions of Section 50C of the Act and the provision of section 23A and 24(5) of the Wealth Tax Act held as under :- 13. Combined reading of the above provisions shows that the valuation adopted by the DVO is subject to appeal and the same is not final. In the instant case we find that as against the value of Rs. 28,73,000/- adopted by the stamp valuation authorities, the DVO has determined the FMV on the date of transfer at Rs. 20,55,000/-. This itself shows that there is wide variation between the two values. Further, the value....
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....the Assessing Officer being less than 15 percent, the same is to be ignored for the purposes of addition. High Court in the case of CIT V/s. Sadna Gupta 352 ITA 595 held that unless and until there was some other evidence to indicate that extra consideration had flowed in transaction for purchase of property, report of DVO could not form basis of any addition on part of revenue. In absence of any evidence no reliance could be placed on the report of DVO for making addition. 10. Thus, in view of the fact that the difference between sale consideration and the market value determined by the DVO is not substantial and is approximately little over 2 per cent of the actual sale consideration, we find no reason for rejecting actual sale consideration mentioned in the Sale Deed for determining long term capital gain. Accordingly, the ground No.1 raised in appeal by the assessee is allowed. The Assessing Officer is directed to adopt actual sale consideration as mentioned in the Sale Deed as a fair market value for determining the long term capital gain." 6. In the light of the facts of the case and the decisions discussed above, we find merit in the submissions of assessee....
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....pect to a certain degree of variations between the stamp duty valuation and the stated consideration of an immovable property. In other words, as long as the variations are within the permissible limits, the anti-avoidance provisions of Section 50C do not come into play. As we have noted earlier, the CBDT itself accepts that there could be various bonafide reasons explaining the small variations between the sale consideration of immovable property as disclosed by the assessee vis-à-vis the stamp duty valuation for the said immovable property. Obviously, therefore, disturbing the actual sale consideration, for the purpose of computing capital gains, and adopting a notional figure, for that purpose, will not be justified in such cases. On a conceptual note, an estimation of market price is an estimation nevertheless, even if by a statutory authority like the stamp duty valuation authority, and such a valuation can never be elevated to the status of such a precise computation which admits no variations. The rigour of Section 50C(1) was thus relaxed, and very thought fully so, to take these bonafide cases of small variations between the stated sale consideration vis-à-vis....
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....r section 50C, in the earlier periods as well. We are, therefore, satisfied that the amendment in the scheme of Section 50C(1), by inserting the third proviso thereto and by enhancing the tolerance band for variations between the stated sale consideration vis-a-vis stamp duty valuation to 10%, are curative in nature, and, therefore, these provisions, even though stated to be prospective, must be held to relate back to the date when the related statutory provision of Section 50C, i.e. 1st April 2003. In plain words, what is means is that even if the valuation of a property, for the purpose of stamp duty valuation, is 10% more than the stated sale consideration, the stated sale consideration will be accepted at the face value and the anti-avoidance provisions under section 50C will not be invoked. 8. Once legislature very graciously accepts, by introducing the legal amendments in question, that there were lacunas in the provisions of section 50C in the sense that even in the cases of genuine variations between the stated consideration and the stamp duty valuation, antiavoidance provisions under section 50C could be pressed into service, and thus remedied the law, there is no....