ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 3(1) , SURAT vs. SHRI DHANESH M. SANGHVI, SURAT

Grounds of appeal

Brief facts of the issue in dispute are stated as under. Assessee is an individual before us. The assessee filed his return of income for AY 2013-14 on 18.10.2013 showing total income at Rs.18,64,210/-. From the computation of income, it was seen by assessing officer that assessee has shown short term capital gain from the sale of immovable properties. On verification, it was noticed by assessing officer that assessee has shown sale consideration lower than the stamp value of the properties. The description of the property in question is as under: Sr.No. Description of property Selling price market price as per Difference sale deed 1 Moje Kabilpore, Tal 70,00,000/- (35% 2,40,87,143/- 1,70,87,143 Navsari, Dist. Surat of (35% of R.S.No.1/1 Rs.,2,00,00,000/-) Rs.,6,88,20,409) 2 Shop No.421, Shiv 14,57,000/- 14,59,184/- 2,184 Shakti Complex, GhodDood Road, Surat Total 1,70,89,317 Therefore, assessing officer issued a show cause notice to assessee asking the assessee, as to why the difference of Rs.1,70,87,143/- between the sale consideration and stamp value should not be added to his total income. In response, the assessee submitted its reply and also requested the assessing officer to refer assessee’s case to the Departmental Valuation Officer (DVO) for ascertaining the fair market value of the property.

We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. We note that issue under consideration is no longer res-integra . The said issue is covered by the judgment of the Coordinate Bench of ITAT Surat in the case of Mansukhbhai Nanjibhai Bhimani, in (AY 2014-15), order dated 13/12/2021, wherein it was held as follows: “6.We have heard the submission of ld. Authorised Representative (ld.AR) of the assessee and the learned senior departmental representative (Sr DR) for the revenue. The ld AR for the assessee submits that he a very short issue remains for consideration of the Tribunal is that when variation in valuation as sustained by the ld.CIT(A), against the value as per registered deed is less than or only 15% whether the additions is still sustainable. The ld.AR for the assessee submits that the variation in value as per the sale deed and the value and Fair Market Value(FMV) determined by the DVO with regard to property shown at Sl.No.1 and 2 is only 5.77%, thus, the assessee is entitled to the benefit of Proviso to section 50C(1) inserted w.e.f 01.04.2019, which enhanced the tolerance bent in valuation from 5% to 10%, which has been held to be retrospectively by the decision of Mumbai Tribunal in Maria Fernandes Chery [2021] (123 taxmann.com 252, Mumbai) decision of Delhi Tribunal in Amrapali Cinema [2021] 127 taxmann.com 376 (Delhi). 7.The ld.AR for the assessee further submits that the fair market value (FMV) determined by DVO is based on estimation and the Co-ordinate Bench of Tribunal in Rahul Construction (38 DTR 19 Pune) held that difference between the sale consideration of property shown by the assessee and FMV determined by the DVO being less than 10% the AO was not justified in substituting the value determined by the DVO for sale consideration disclosed by assessee. In Smt Sita Bai Khetan181 TTJ 549 (JP), the Tribunal held that difference between the valuation property adopted by the Stamp Valuation Authority and the consideration declared by the assessee being less than 10%, and the AO was directed to adopt the value declared by the assessee for computation of Capital Gain. Similar view was taken in Krishna Enterprises 146 DTR 73, Mumbai. 8.For property mentioned at Sl. No. 3 and 4, the ld.AR of the assessee submits that there is a difference of 14.77% and 14.58% in value shown in the documents and the fair market value determined by DVO. The ld AR for the assessee submits that various benches of Tribunal in following cases held that difference up to 15% estimate needs to be ignored against the declared value.  C.B.Gautam Vs UOI (65 Taxman 440 (SC),  Smt. Vimlaben Bhagwandas Patel Vs CIT [1979] 118 ITR 134 (Guj HC) and  Bimla Singh Vs CIT [2009] 308 ITR 71 (Pat). 9.The ld.AR for the assessee accordingly submits that by taking a broad view, the assessee may be allowed relief. The ld AR for the assessee furnished chart showing percentage of difference in the value shown by the assessee and the value accepted by ld CIT(A). 10.On the other hand, the ld. Sr. DR for the Revenue supported the order of ld. CIT(A). The ld. Sr. DR submits that whatever relief was claimed before the ld. CIT(A) was granted to the assessee. The assessee has now raised an additional plea about the tolerance range of 10% or 15% with regard to properties shown at Sl.No.1, 2 & 3, 4 respectively. The case laws relied by the assessee with regards to the property shown at S. No. 3 &4 are based on different set of fact and are not applicable on the facts of the present case. The ld. Sr. DR for the Revenue prays for dismissal of appeal. 11.We have considered the submission of both the parties and have gone through the orders of authorities below. We find that there is no mush dispute on the facts of the case. During the hearing ld AR for the assessee furnished a chart showing the details of difference in % of value declared by the assessee and value accepted by the ld CIT(A), the relevant part of which is recorded below; Property No. Value as per Share of Value accepted Difference document assessee by CIT(A) in % 1 Property at Sr 41,00,000 100% 43,51,000 5.77 No.1 2 Property at Sr 41,00,000 100% 43,51,000 5.77 No.2 3 Property at Sr 97,01,250 50% 56,91,000 14.77 No.3 4 Property at Sr 15,20,000 25% 4,44,883 14.58 No.4

In the result, appeal of the Revenue is allowed to the extent indicated above.