9911796707
TMI Blog2023 (3) TMI 1539X X X X Extracts X X X X X X X X Extracts X X X X ..... idential and commercial properties in Mumbai. The Assessing Officer during the assessment proceedings called for the hard copy of the Return of Income, Tax Audit Report u/s. 44AB, Form 3CD, audited financial statements and relevant details and the same was verified and placed on record. During the course of assessment proceedings, Assessing Officer observed that assessee has sold immovable properties (flats) for consideration lower than the market price of the said flats adopted for stamp duty purposes. Accordingly, show cause notice was issued to the assessee to explain the above difference along with supporting documents. The Assessing Officer issued the show cause notice dated 16.12.2016 with the table, for the sake of clarity it is reproduced below: - Sr. No Flat Project name Market Value (1) Sale Price (2) Difference (1 - 2) 1. 702 Gaurau Paradise 69,16,000 56,78,500 12,37,500 2. 602 Gaurav Paradise 69,16,000 48,47,500 20,68,500 3. 701 Gaurau I Paradise 48,75,000 34,47,500 14,27,500 4 804 Gaurav Excellency 45,79,000 45,77,370 1,630 5 904 Gaurav Excellency 45,79,000 45,77,370 1,630 6 1204 Gaurav Excellency 18,73,000 14,55,500 4,17,500 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement of income. Therefore, the assessing officer cannot make any addition u/s 43CA of the Act. For this proposition, the appellant has relied on the decision of Hon. Supreme Court in the case of K. P Varghese vs ITO 1981 (9) TMI 1- Supreme Court. (ii). The Ld. Assessing Officer failed to appreciate that in most cases, the difference was less than 10% of the stamp duty value and as such no addition should have been made. For this proposition the appellant has relied on following case laws: a. Chanderprakash Jhunjhunwala vs DCIT ITA No. 2351/Kol/2017 (Kolkata) b. Buttepatil Properties vs ITO ITA No. 682/Pun/2018 (ITAT Pune) (iii). Sub Sec. 2 of sec. 43CA, mandates that where assessee claims that value adopted or assessed by the stamp duty authority exceeds the fair market value of the property, then, Assessing Officer is duty bound to refer the valuation of the concerned asset to the valuation officer. For this proposition the appellant has relied on following decisions: a. Sunil Kumar Agarwal vs CIT 47 Taxmann.com 158 (Calcutta HC) b. Telmos Electronics vs ACIT 2017 (12) TMI 736- ITAT Delhi c) ITO vs Smt. Surekha Vilas Soudagar 2018 (6) TMI 1184-ITAT Mumbai (iv) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difference was almost 30%. For example, for flat no. 904, the difference in stamp duty valuation and the consideration was only Rs. 1,630/- however, on the other hand for flat no. 1204, the difference in the stamp duty valuation and the consideration comes to Rs. 4,17,510/- which comes to 28.68% of the consideration shown in the books of accounts. Such huge variation is not justifiable. The appellant has relied upon certain case laws wherein the Hon. Judicial Authorities have held that the Assessing Officer should have referred the properties for valuation to DVO however, the facts of the case in hand are completely different because in the present case because firstly, the appellant itself is not claiming that the market value of flats is lower than the stamp duty valuation and secondly, in the same building the appellant itself has sold some of the flats at a value almost similar to the stamp duty valuation. In view of peculiar facts of this case, I am of the opinion. the reference to DVO is not necessary before applying the provision of sec. 43CA of the Act. The ground No. 2 raised by the appellant is therefore, DISMISSED. 8.1 The next argument of the appellant is that the dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to the Finance Act 2020 and certainly this tolerance limit of 10% cannot be given a retrospective effect. In none of the case laws relied upon by the appellant, it is held that the tolerance limit of 10% is to be given a retrospective effect. 8.3 A perusal of the table reproduced in para 4 above suggest that the difference in the sale consideration shown by the appellant and the valuation adopted by the stamp valuation authority for flat no. 804, 904, 1102, 1103, 1401, 1003 and 1004 is Rs. 1,630, Rs. 1,630/-, Rs. 1,265/-, Rs. 1,265/-, Rs. 18,000/-, Rs. 1,450/- and Rs. 1,000/-. The difference between the sale consideration shown by the appellant and the valuation as per stamp valuation authority is nominal and, in my opinion, should be ignored while applying the provisions of sec. 43CA of the Act. Therefore, the addition made by the Assessing Officer w.r.t flat no. 804, 904, 1102, 1103 and 1401 of Gaurav Excellency, flat no. 1003 of Gaurav Uster and flat no. 1004 of Gaurav Samruddhi amounting to Rs. 26,240/- is directed to be deleted. 8.4. The difference in terms of percentage of consideration received for the remaining 9 flats is worked out as under: No Flat No. Project na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he discrepancies over the period. 4. Appellant craves leave to add, alter, modify or delete any of the grounds of appeal." 9. At the time of hearing, Ld. AR of the assessee has not pressed Ground No. 1, accordingly, same is dismissed as such. 10. With regard to Ground No. 2, Ld. AR of the assessee submitted that the Finance Act, 2018 w.e.f. A.Y. 2019-20 onwards has amended provisions of section 43CA and accordingly, difference of allowance is increased from 5% to 10%, the difference amount between stamp duty and reported sale consideration to the extent of 10% is allowable. He submitted that the above amendment is retrospective in nature. In this regard he relied on the decision of the Coordinate Bench in the case of Shri Harish H. Gandhi v. ACIT [(2022) (6) TMI 1277 - ITAT Mumbai] as per which the Coordinate Bench has adjudicated that the amendment made to section 43CA is retrospective in nature in consonance with the amendments made to section 51C of the Act. He filed the copy of the above decision at the bar. By relying on the above said decision, Ld. AR submitted that the chart disclosed in the order of the Ld. CIT(A) at Page No. 7 which Ld. CIT(A) has calculated the differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proviso thereto and by enhancing tolerance band for variations between sale consideration vis a vis stamp duty valuation from 5% to 10% are effective from date on which section 50C itself was introduced i.e. from 01/04/2003 and therefore, having retrospective applicability thereon. The language of provisions of Section 50C are exactly pari materia with provisions of Section 43CA of the Act. Hence, though the aforesaid decision was rendered in the context of Section 50C of the Act, the same analogy would apply for provisions of Section 43CA of the Act also as similar proviso is available in Section 43CA of the Act also. Hence, respectively following the aforesaid decision of this Tribunal, we hold that the difference of Rs. 4,42,460/- added by the ld. AO in the assessment falls below the tolerance band of 10% and hence, by applying the proviso to Section 43CA of the Act, no addition is required to be made in the instant case u/s. 43CA of the Act. Accordingly, the ld. AO is hereby directed to delete the addition of Rs. 4,42,460/- made by him in the assessment. Accordingly, the grounds raised by the assessee are allowed." 13. Respectfully following the above said decision, and in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
