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TMI Blog2023 (8) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... emonstrate that majority of the comparable instances picked up by the DVO himself showed that the purchase price paid by the assessee was comparable to the instances picked up by him. For this reason alone, we hold that the addition made to the income of the assessee u/s 56(2)(viib) was not justified and direct the same to be deleted. The contention of the AO is bound to accept the DVO s report, we agree with the same. But at the same time Valuation of property is only an exercise in approximate estimation. And therefore there is always scope for correction of the estimates on account of discrepancies. Assessee is well within his rights to contest the valuation, which if found justified, the appellate authorities cannot shut their eyes to the same. The decision relied upon by the DR of the hon ble jurisdictional high court in the case of Gayatri Enterprise vs. ITO [ 2019 (9) TMI 777 - GUJARAT HIGH COURT] has been rendered in a totally different context where the issue raised before the Hon ble Court was in the context of revisionary proceedings conducted by the Commissioner u/s 263 of the Act finding assessment order erroneous on account of the AO have not taxed difference between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act amounting to Rs. 55,91,837/-, being the amount by which an immoveable property purchased by the assessee fell short of its stamp duty value. 4. The facts relating to the case is that the assessee had jointly purchased an agricultural land at village Kadiyali, Taluka Rajula, District Amreli for a total consideration of Rs. 80,00,000/-. The stamp duty paid on this purchase of agricultural land was Rs. 9,40,000/-. The Assessing Officer accordingly calculated the fair market value i.e. stamp duty value of the property at Rs. 1,91,83,673/- and since purchase consideration was less than the aggregate fair market value of the property adopted for stamp duty valuation, he treated the difference of Rs. 1,11,83,673/- as income in terms of section 56(2)(vii)(b) of the Act. The assessee's share in the property being 50%, addition of 50% of the difference i.e. Rs. 55,91,873/- was made in the hands of the assessee. 5. During appellate proceedings, the assessee contended that the Assessing Officer had erred in not referring the property for valuation to the DVO and requested the property be referred for valuation as contemplated u/s. 50C of the Act. The ld. CIT(A) accordingly directed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view, the same does not help the case of the assessee which deals specifically with section 56(2)(vii)(b). Further, the relevant extract of section 56(2)(vii)(b) is reproduced as under:- "ii. for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as uxceeds such consideration." The section makes it amply clear that in cases where the purchase consideration is less than the stamp duty value of the property by an amount; exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration has to be assessed u/s 56(2). In the provisions of section 56 there is no further allowance whatsoever that is permitted. In the case of the: appellant, such difference's more than 15% i.e. 15.02%. Since no allowance whatsoever is permitted within Sec 56(2) the contentions of the appellant are rejected. Also the case laws relied upon are distinguishable on facts and do not help the case of the assessee. 7.8 In view of the above discussion, the appellant's contentions are rejected and AO is directed to re-compute the addition u/s 56(2)(vii)(b) on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 He also contended that even the comparable instances which were taken by the DVO were quite largely comparable to the assessee. He drew our attention to paper book page no. 38 where the DVO had listed the comparable instances for the purpose of valuation pointing out that the rate per square meter of the comparable instances noted by the DVO Rs. 416/- per square meter, Rs. 458 per square meter, Rs. 525 per square meter and 457 per square meter. He pointed from the same that most of the comparable instances were comparable to the assessee's purchase price of Rs. 421/- per square meter referring to the chart as placed below:- COMPARABLE SALE INSTANCES ANNEXUTRE-"A" Assessee : Smt. Mumtajbanu Jivani Property: S. No. 5/2 paiki 1/2/1, Kadiyali Date Of Valuation : As on 26.06.2013 Sr. No. Location Consideration in (Rs.) Area in (Sq.m) Rate/Sq. m in (Rs.) Seller Regd. No. Purchaser Date 1 S.No.l54, Paiki 3 Kadiyali 4212000.00 10117.00 416.00 Kantilal Shah 1881 Kanjibhai Sardhara 18.10.2013 2 S. No. 187 paiki 1, Kadiyali 9083399.00 19830.00 458.00 Jalodhara Valabhai 1093 Navneetrai Vora 23.05.2013 3 S.No.189 paiki 1. Kadiyali 9081 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer was bound by the report of the DVO and could not have made any adjustment to the same. In this regard, he relied upon the decision of Hon'ble Jurisdictional High Court in the case of Gayatri Enterprise vs. ITO reported in 105 CCH 483. He further relied upon the order of the ld. CIT(A) finding the ratio laid down by the Hon'ble Apex Court in the case of CB Gautam supra as unacceptable in the facts of the present case. Ld. Departmental Representative also pointed out that the difference in valuation contended by the learned counsel for the assessee to be 15% was actually 17.68%. He therefore contended that ld. CIT(A) had confirmed the addition in the facts of the case. 12. We have heard the rival contentions and carefully considered the arguments of both the parties and have also gone through the orders of authorities below. 12.1 The issue before us is relating to the addition made to the income of the assessee on account of purchase price of land purchased during the impugned year by the assessee found to be less than its fair market value/stamp duty valuation, in terms of provisions of 56(2)(vii)(b) of the Act. The assessee had purchased the land at a value of Rs. 421 per sq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... square meter and Rs. 457 per square meter, they are within 10% acceptable range. Even the ld. Departmental Representative does not dispute this fact. 12.4 In the light of the above, we agree with the Ld. Counsel for the assessee that majority of the comparable instances picked up by the DVO for valuation of impugned land falling within the acceptable range of comparison with the purchase value of the assessee, there was a good a justifiable case for treating the purchase value of land by the assessee as comparable to its fair market value. Moreover, we find, there is no basis given by the DVO for arriving at fair market value of Rs. 495/- from the comparable instances listed by him in his report. Therefore, we see no reason for adopting the said value as the fair market value when the facts sufficiently demonstrate that majority of the comparable instances picked up by the DVO himself showed that the purchase price paid by the assessee was comparable to the instances picked up by him. 12.5 For this reason alone, we hold that the addition made to the income of the assessee u/s 56(2)(viib) of the Act to the tune of Rs. 55,91,420/- , was not justified and direct the same to be del ..... X X X X Extracts X X X X X X X X Extracts X X X X
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