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TMI Blog2024 (8) TMI 486X X X X Extracts X X X X X X X X Extracts X X X X ..... ration and the fair market value is 9.14%, no addition was warranted in terms of Section 56(2)(x)(b)(B)(ii) of the Act. Accordingly, addition made by the Assessing Officer, which was confirmed by the CIT(A), is deleted. Accordingly, Ground No. 1 raised by the Appellant is allowed. - SHRI AMARJIT SINGH, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER For the Appellant : None For the Respondent : Shri Dr. Kishor Dhule ORDER Per Rahul Chaudhary, Judicial Member: 1. By way of the present appeal the Assessee has challenged the order, dated 24/07/2023, passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi [hereinafter referred to as the CIT(A) ] for the Assessment Year 2018-19, whereby the Ld. CIT(A) had partly allowed the appeal of the Assessee against the Assessment Order, dated 14/09/2021, passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 2. The Appellant has raised following grounds of appeal: 1. The Learned CIT(A) has erred in upholding the addition made by the AO u/s 56(2)(x) of the Act of Rs. 3,86,000/- on account of difference between purchase value and val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on 30.06.2017 at Rs. 84,86,000/-. So, there was a difference of Rs. 3,86,000/-. Since, the difference exceeded by more than 5% of the purchase consideration the Assessing officer treated this difference as income from other sources u/s 56(2)(x). 5.1. The appellant had submitted a written submission on 19.07.2023, wherein it has been contended that the difference though exceeded 5% but it was below 10%. The actual difference was 9.14%. The assessee had tried to prove that the undervaluation of cost of property with regard to the stamp duty valuation and fair market value by the DVO (the least of the two) is less than 10%. The relevance of 10% has been brought here for consideration by the appellant to correlate it with the fact that the word (five per cent) in 56(2)(x)(b)(B)(ii) was later on substituted by ten per cent . But this argument and correlation by the appellant does not appear to be correct as the word ten per cent was to be effective from 01.04.2021 i.e. from assessment year 2021-22. There was no intent, nor any specification of the fact that the word ten per cent will be effective retrospectively. There was similar amendment in third proviso of sub- section 1 of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity of a State Government (hereafter in this section referred to as the stamp valuation authority ) for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer : ** ** ** ** ** ** Provided also that where the value adopted or assessed or assessable by the stamp valuation authority does not exceed one hundred and five per cent of the consideration received or accruing as a result of the transfer, the consideration so received or accruing as a result of the transfer shall, for the purposes of section 48, be deemed to be the full value of the consideration.' 10. Unlike section 50C of the Act, there was no corresponding provision in the Act vesting the assessing authority with power to adopt the stamp duty value as deemed sale consideration in respect of the buyer of the immovable property. However, by Finance Act, 2013, a new sub clause (b) was introduced to section 56(2)(vii) with effect from 1-4-2014, which reads as under:- (b) any immovable property,- (i) Without consideration, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the 1st day of April, 2017, (a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum; (b) any immovable property, (A) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; (B) for a consideration, the stamp duty value of such property as exceeds such consideration, if the amount of such excess is more than the higher of the following amounts, namely: (i) the amount of fifty thousand rupees; and (ii) the amount equal to five per cent of the consideration:] ** ** ** 13. Thus, as can be seen, after introduction of section 56(2)(x), applicable for transactions undertaken after 1-4-2017, by Finance Act, 2018, identical exception as provided in third proviso to section 50C(1) is also provided in sub clause (b)(B)(ii) from 1-4-2019 . Interestingly, section 43CA introduced to the statute by Finance Act, 2013 with effect from 1-4-2014 also provide for adoption of the value determined by the stamp valuation authority if it is in excess of the declared sale consideration of an immovable property. However, this provision is appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee would be eligible to get the benefit of ten per cent margin difference in the valuation between the value determined by the stamp duty authority and the declared sale consideration. Thus, if the variation between the aforesaid two values falls within the range of ten per cent, no addition can be made. 17. I t is further relevant to observe, section 50C or for that matter section 56(2)(vii)(b)(ii) are identical provisions. Only difference being, 50C is applicable to the seller of an immovable property, whereas, the later provision is applicable to the buyer of the property. Therefore, a benefit given to a seller of the property in respect of marginal variation cannot be denied to the buyer of the property, since, they stand on the same footing. This aspect of the issue has also been considered by the co-ordinate bench in case of Shri Sandip Patil v. ITO (supra), wherein, the co-ordinate bench has held that there cannot be two different fair market value in respect of the very same property, i.e. one at the hands of the seller and the other at the hands of the buyer. Thus, in our view, if the difference in valuation between the value determined by the stamp duty authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cheryl (supra), wherein it is held that the prescribed tolerance band of 10% applies retrospectively. He further referred to the several judicial precedent relied upon before the learned CIT(A) as well as the decision of the co-ordinate Benches in case of Joseph Mudaliar v. Dy.CIT [2021] 130 taxmann.com 250/191 ITD 719 (Mum.), John Flower (India) (P.) Ltd. v. Dy. CIT [IT Appeal No. 7545 (Mum.) of 2014, dated 24-7-2017] and Pankaj Anilkumar Pitale v. ACIT [IT Appeal No. 6813 (Mum.) of 2017, dated 19-3-2019] . Accordingly, he submitted that there is no infirmity in the order of the learned CIT(A) in deleting the addition applying 10% tolerance band limit for this assessment year. 18. We have carefully considered the rival contentions and perused the orders of the lower authorities. Referred facts shows that Assessee has purchased 7 properties. Sale consideration in all the properties is 28,78,28,500/- and stamp duty value is Rs. 26,96,75,300/-. Thus difference of Rs. 1,81,53,200/- was made by the LD AO u/s 56(2) (x) of The Act. The LD CIT found that out of 7 properties in case of 6 properties the difference between the agreed consideration and stamp duty value is approximately 6%. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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