2016 (10) TMI 1333 - AT - Income Tax

Capital gain computation - calculation of FMV - adopting fair market value (FMV) value of the property instead as per sale deed of the property sold.- HELD THAT - From the records available especially the orders passed by the revenue authorities alongwith case laws referred by the ld. Counsel of the assessee. We note that the Assessee has established the difference between the value adopted by the Stamp Valuation Authority and declared by the assessee is less than 10% and therefore the issue is squarely covered by the decision of the Hon ble Supreme Court of India in the case of CB Gutam vs. UOI Ors. 1992 (11) TMI 1 - SUPREME COURT Also further find that the aforesaid decision of the Hon ble Supreme Court of India has been followed by the various Benches of the Tribunal including the Jaipur Bench in the case of Smt. Sita Bai Khetan vs. ITO 2016 (11) TMI 955 - ITAT JAIPUR 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 is bound to occur we are of the considered opinion that the AO in the instant case is not justified in substituting the sale consideration as against the actual sale consideration disclosed by the assessee. - Decided in favour of assessee.

Summary

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 ?88,50,000 instead of ?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 ?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.