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TMI Blog2017 (2) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... ins arising from sale of land on the ground that assessee has understated the value of sale consideration while computing long term capital gain at the time of filing return of income. Aggrieved by assessment order dated 20.03.2013, the assessee preferred appeal before Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) partly accepted the appeal of assessee and adopted sale consideration as per DVO's report and rejected other contentions of the assessee. Against the findings of Commissioner of Income Tax (Appeals), the assessee is now in second appeal before the Tribunal. The assessee has assailed the order of Commissioner of Income Tax (Appeals) by raising following grounds:- 1) The Honorable Commissioner of Income Tax (Appeals) erred in adopting the value certified by District Valuation Officer-II, I.T Department, Mumbai ( in short "DVO") Rs. 3,14,86,000/- as full value consideration instead of the Agreement Value Rs. 3,07,71,470/- without appreciating the fact that there was very minor difference between the valuation as per DVO and the Agreement Value. The honorable Commissioner of Income Tax (Appeals) failed to appreciate that valuation is an es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, till the time of passing of assessment order on 23.03.2013, the report of DVO had not come. The Assessing Officer adopted the sale consideration as per stamp duty valuation rate i.e Rs. 5,75,81,250/-. The assessee carried the matter in appeal before the Commissioner of Income Tax (Appeals). The DVO vide report dated 23.12.2013 (placed on record at page No. 69 to 84 of the paper book) determined the fair market value of property at Rs. 3,14,86,000/-.The Commissioner of Income Tax (Appeals) adopted the valuation of property as determined by the DVO and granted part relief to the assessee. The ld. A.R contended that there is marginal difference between actual sale consideration as per sale deed and the fair market value determined by the DVO. The difference is only Rs. 7,00,000/- which is approximately 2 per cent of the total value of the land. Valuation of the property is done on the basis of estimation. Where the difference in value of property adopted by the assessee and as determined by the DVO is less than 10 per cent, the value declared by the assessee should be accepted. In support of his submissions the ld. A.R placed reliance on the decision of Pune Bench of the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... untala Kantilal 190 ITR 56 ( Bom.) 2) CIT V/s Abrar Albi 247 ITR 312 ( Bom.) 3) CIT V/s. Raman Kumar Suri 255 CTR 257 ( Bom.) 5. Per contra Shri P.L Kureel representing the Department vehemently defended the findings of Commissioner of Income Tax (Appeals) in confirming the additions. 6. We have heard the submissions of the rival representatives and have perused the orders of Authorities below. We have also considered the decisions and documents on which ld. A.R has placed reliance. The assessee in appeal has impugned the findings of the Commissioner of Income Tax (Appeals) in adopting the value of property as determined by the DVO and addition of Rs. 23 Lacs on account of part consideration paid by the purchaser of land directly to Mr. Mansoor Abdul Gani Aaga and Smt. Shagufta M. Aaga. 7. In respect of first ground of appeal relating to valuation of property, it is an admitted fact that as per Sale Deeds, the total sale consideration is Rs. 3,07,71,470/-. The Assessing Officer adopted sale value of property for the purpose of determining long term capital gain as per stamp duty valuation i.e Rs. 5,75,81,250/-. The reason for wide variation in the valuation of property for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the DVO is less than 10 per cent. 14. We find that the Pune Bench of the Tribunal in the case of Asstt. CIT V/s. Harpreet Hotels (p) Ltd. vide ITA Nos. 1156- 1160/pn/2000 and relied on by the learned counsel for the assessee had dismissed the appeal filed by the Revenue where the CIT(A) had deleted the unexplained investment in house construction on the ground that the difference between the figure shown by the assessee and the figure of the DVO is hardly 10 percent. 15. Similarly, we find that the Pune Bench of the Tribunal in the case of ITO V/s. Kaaddu Jayghosh Appasaheb, vide ITA No.441/PN/2004 for the asst. yr 1992-1993 and relied on by the learned counsel for the assessee following the decision of the J&K High Court in the case of Honest Group of Hotels (P) Ltd. V/s CIT (2002) 177 CTR (J&K) 232 had held that when the margin between the value as given by the assessee and the Departmental valuer was less than 10 per cent , the different is liable to be ignored and the addition made by the A.O cannot be sustained. 16. 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 de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als) rejected the contention of the assessee and disallowed Rs. 23 Lacs directly paid by purchaser of the land to Mr. Mansoor Abdul Gani Aaga and Smt. Shagufta M. Aaga. The Commissioner of Income Tax (Appeals) erred in coming to the conclusion that while determining sale consideration, discount must have been made for litigation qua property. We do not agree with the view taken by the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) cannot make addition by drawing references from selective sections of the Sale Deed. The content of the Sale Deed has to be read in whole. A perusal of Clause-9 of the Sale Deed show that it was mutually decided between the assessee who is seller No.1 in the sale Deed, Mansoor Abdul Gani Aaga and Smt. Shagufta M. Aaga seller No. 2 and 3 respectively in the Sale Deed that Mansoor Abdul Gani Aaga and Smt. Shagufta M. Aaga would receive Rs. 8 Lacs and Rs. 15 Lacs respectively from the purchaser. There is reference of compromise purshis in Civil Suit No. 1741 of 2015 between the assessee and various other persons including Mr. Mansoor Abdul Gani Aaga and Smt. Shagufta M. Aaga. The Clause -9 of Sale Deed reads as under:- "9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant extract of the judgment is reproduced herein below: "The legislature, while using the expression "full value of consideration"; in our view, has contemplated both additions to as well as well as deductions from the apparent value. What it means is the real and effective consideration. That apart, so far as Cl.(i) of s. 48 is concerned, we find that the expression used by the Legislature in its wisdom is wider than the expression " for the transfer". The expression used is "the expenditure incurred wholly and exclusively in connection with such transfer". The expression "in connection with such transfer" is, in our view, certainly wider than the expression "for the transfer". Here Aagain, we are of the view that any amount of the payment of which is absolutely necessary to effect the transfer will be an expenditure covered by this clause. In other words, if, without removing any encumbrances including the encumbrance of the type involved in this case, sale or transfer could not be affected, the amount paid for removing that encumbrance will fall under cl. (i). Accordingly, we agree with the Tribunal that the sale consideration requires to be reduced by the amount of co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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