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2019 (3) TMI 1889 - AT - Income TaxAddition u/s 50C - sale consideration declared by the assessee is less than the value as per stamp duty valuation authority - fair market value as per AIR information - valuation of the property to DVO to ascertain the FMV - consideration declared by the assessee is less than the value as per stamp duty valuation authority - CIT(A) deleted the addition on the ground that difference between the fair market value as per DVO report and agreement value which is 5.8% approximately - HELD THAT - CIT(A) deleted the addition on the ground that difference between the fair market value as per DVO report and agreement value comes to around 5.8% approximately and Ld. CIT(A) by relying on the decision of Hon ble Supreme Court in the case of C.B. Gautam 1992 (11) TMI 1 - SUPREME COURT and decision of Krishna Enterprises 2016 (12) TMI 52 - ITAT MUMBAI decided the issue in favour of the assessee by holding that the difference between the fair market value as per DVO and the value as per agreement is around 5.8% which is not to be considered for making addition under section 50C and thus deleted the addition - We do not find any infirmity in the order of Ld. CIT(A) or any reason to deviate from the finding of the Ld. CIT(A). Accordingly we uphold the order of Ld. CIT(A) by dismissing the appeal of the Revenue.
Issues involved:
Deletion of addition under section 50C based on fair market value discrepancy. Analysis: 1. The only issue raised in this appeal is the deletion of an addition of ?2,31,95,180/- under section 50C by the Commissioner of Income Tax (Appeals) (CIT(A)) for the assessment year 2012-13. The Revenue challenged the deletion of the addition made by the Assessing Officer (AO) based on the grounds that the sale consideration declared by the assessee was less than the value as per the stamp duty valuation authority. 2. The assessee sold a plot of land in Mumbai for ?4,89,46,320/-, while the stamp valuation was ?7,21,41,500/-. The AO added ?2,31,95,180/- to the income of the assessee under section 50C as the declared sales consideration was lower than the stamp valuation. The CIT(A) referred the matter to the District Valuation Officer (DVO), who determined the fair market value at ?5,15,29,600/-. The CIT(A) deleted the addition based on the DVO's valuation, which showed a difference of ?25,83,278/-, around 5.8%. 3. The CIT(A) relied on the decision of the Hon'ble Supreme Court in the case of C.B. Gautam and jurisdictional ITAT decisions to support the deletion of the addition. The CIT(A) emphasized that if the difference between the fair market value as per the DVO and the value as per the agreement is less than 15%, it should be ignored. The CIT(A) also cited jurisdictional ITAT decisions to further support the position that a difference of less than 10% should not result in an addition under section 50C. 4. The ITAT upheld the CIT(A)'s order, noting that the difference between the fair market value determined by the DVO and the agreement value was approximately 5.8%. By relying on the decisions cited by the CIT(A), including the Supreme Court's ruling and jurisdictional ITAT decisions, the ITAT concluded that the addition under section 50C was not warranted. Therefore, the ITAT dismissed the Revenue's appeal and upheld the CIT(A)'s order to delete the addition of ?2,31,95,180/-. In conclusion, the ITAT affirmed the CIT(A)'s decision to delete the addition under section 50C based on the fair market value discrepancy determined by the DVO, which was around 5.8%, and in line with relevant legal precedents.
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