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2023 (6) TMI 25 - AT - Income TaxComputing profits and gains from transfer of asset / immovable property- value determined by the DVO - difference between stamp value and sale consideration - HELD THAT - AO himself has referred the property under consideration to the DVO for valuation who assessed the value of property at Rs.2,01,33,600/- as against the sale consideration of Rs.1,66,15,200/- and circle rate of Rs.3,35,22,444/-. Though AO himself has referred the property to the DVO for valuation, however, by filling remand report dated 27.02.2019 before the ld. Commissioner raised the question over the method of valuation used by the DVO who has used the rent capitalization method for valuation of the property as a prescribed method for valuation. Commissioner by considering the peculiar facts that AO has failed to point out any lacunae or fallacies in respect of the DVO report to substantiate his claim that the valuation report was not reliable and in the remand report, the AO did not cite any comparable evidence of sale of property at the value adopted by the AO in the assessment order, ultimately accepted the value determined by the DVO, as the fair market value of the property sold and therefore, considering the peculiar facts and circumstances of the case restricted the addition to the difference of Rs.35,18,400/- (Rs.2,01,33,600 - Rs. 1,66,15,200). Considering the decision of the ld. Commissioner in totality, we do not find any reason and/or material to contradict the findings of the ld. Commissioner in coming to the said decision. - additions confirmed.
Issues:
The judgment involves the assessment year 2015-16 and pertains to an appeal by the Assessee against the order of the Commissioner of Income-tax. The key issue revolves around the addition of Rs.1,69,07,244 in the income of the Appellant company due to the difference between the stamp value and sale consideration of a property sold by the company. Details of the Judgment: 1. Non-Appearance of Appellant: The Appellant did not appear for the hearing despite receiving multiple notices, leading the Tribunal to consider the appeal as ex parte. 2. Assessment and Addition of Income: The Appellant, engaged in real estate development, sold a property for Rs.1,66,15,200, whereas the stamp value was Rs.3,35,22,444. The Assessing Officer added Rs.1,69,07,244 to the income, based on Section 43CA of the Income-tax Act, deeming the stamp value as the full consideration. 3. Challenge and Decision by Commissioner: The Appellant challenged the addition before the Commissioner, who affirmed a reduced addition of Rs.35,18,400, considering the difference between the stamp value and sale consideration. The matter was further appealed. 4. Valuation Report by DVO: The District Valuation Officer (DVO) assessed the property value at Rs.2,01,33,600. The Tribunal noted that the AO referred the property to the DVO for valuation but later questioned the method used by the DVO. 5. Tribunal's Decision: The Tribunal observed that the AO failed to provide substantial reasons to discredit the DVO's valuation report. As the AO did not present any evidence to challenge the DVO's valuation, the Tribunal accepted the DVO's value as the fair market value. Consequently, the addition was limited to Rs.35,18,400. 6. Final Decision: The Tribunal upheld the Commissioner's decision, stating that there was no basis to overturn it. Therefore, the appeal by the Appellant was dismissed. In conclusion, the Tribunal dismissed the appeal, upholding the reduced addition determined by the Commissioner based on the valuation report by the DVO.
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