DIVYA YADAV,JAIPUR vs. INCOME TAX OFFICER, BUNDI

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, “SMC” BENCH, JAIPUR BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER & SHRI T. R. SENTHIL KUMAR, JUDICIAL MEMBER ITA No. 1380/JPR/2025 (Assessment Year: 2015-16)

Divya Yadav Vs. ITO 47, Taruchaya Nagar, Gayatri Nagar, Bundi, SH- Tonk Road, Jaipur 302029 29, Bundi Road, Bundi, Rajasthan 323001 �थायीलेखासं./जीआइआरसं./PAN/GIR No:ACWPY 2147C Appellant .. Respondent Appellant by : Sh. S.L. Poddar, Adv & Sh. Harsh Poddar, Adv Respondent by : Mrs. Aarti Rawat, Addl. CIT Date of Hearing 06.07.2026 Date of Pronouncement 29.07.2026 O R D E R PER ANNAPURNA GUPTA, AM: The present appeal has been filed by the assessee against the order passed by the Office of the Commissioner of Income Tax, Appeal Addl./JCIT(A)-01, Delhi (hereinafter referred to as “Ld. CIT(A)”), dated 29.09.2025 u/s 250 of the Income Tax Act, 1961, (hereinafter referred to as “the Act”).

P a g e | 2 ITA No. 1380/JPR/2025 Divya Yadav 2. The grounds raised by the assessee are as follows:- 1. Under the facts and circumstances of the case, the Learned CIT(A) has erred in confirming the addition of Rs. 33,78,440/-u/s 56(2)(vii)(b) of the Income Tax Act 1961. 2. The assessee craves your indulgence to add amend OR alter all OR any grounds of appeal before OR at the time of hearing. 3. The solitary issue in the present appeal pertains to addition made to the income of the assessee on account of investment made in the purchase of an immovable property, being land, found to be less than its stamp duty value ; the difference therefore being added to the income of the assessee in terms of the provisions of Section 56(2)(vii)(b) of the Act. 4. The brief facts relating to the issue are that the assessee had purchased an immovable property vide registration No.2850/14, Book No. 1.00, Page No.72, Village Susavan, District Bara, during the impugned year on 22.10.2014 for a total consideration of Rs.8,01,560/-. However, the Stamp Valuation Authority had valued the said property at Rs.41,80,000/-. To verify the actual value of the property, the AO made a reference to the Valuation Officer, Ajmer to provide the market value of property. The Assistant Valuation Officer submitted his valuation report dated 05.12.2017, as per which, he assessed the value of the property at Rs.41,80,000/-. Accordingly, the AO made addition of the difference in the actual purchase price of the property and the valuation of the said property as per D.V.O. of Rs.33,78,440/- to the income of the assessee u/s. 56(2)(vii)(b) of the Act. The order of the AO was upheld by the Ld. CIT(A).

P a g e | 3 ITA No. 1380/JPR/2025 Divya Yadav 5. Before us, the primary contention of the ld. counsel for the assessee against the order passed by the Ld. CIT(A) was that the addition had been confirmed by the Ld. CIT(A) ignoring all the arguments made on merits by the assessee against the addition made. The arguments, it was pointed out were to the effect that 1. The D.V.O had reiterated the stamp duty value of the property and had not determined the fair market value of the property, which he was required to do. That this exercise by the D.V.O. of adopting stamp duty value for determining the fair market value stood rejected by the ITAT Jaipur Benches in the case of Shri Khurshid Ahmed, Jaipur Vs. Income Tax Officer, Ward-3 in ITA No.1137/JPR/2018 vide order dated 3rdOctober, 2019. 2. The assessee had submitted comparable instances of property sold in the vicinity, which justified the purchase price paid by the assessee, and the Ld. CIT(A), had not taken cognizance of the same. 3. The assessee had also submitted the reasons for the purchase consideration being low, stating the land belong to SC/ST, and was 7 feet away from the road, and therefore, its fair market value was quite low, which factor had not been considered by the D.V.O. 6. He contended further, that besides ignoring the above submissions, the Ld. CIT(A) had wrongly stated the decision in the case of Shri Khurshid Ahmed, Jaipur (Supra) as not applicable to the facts of the present case, without pointing out any distinguishing fact, and had also wrongly applied the provisions of Section 56(2)(vii)(b) of the Act, while upholding the addition made by the AO, stating that, the

P a g e | 4 ITA No. 1380/JPR/2025 Divya Yadav assessee was required to prove that it had disputed the value adopted by the Stamp Valuation Authority so as to adopt the lower value claimed by the assessee. He also contended that the Ld. CIT(A) had wrongly noted the assessee to have accepted the fair market value of the property as assessed by the Stamp Valuation Authority. 7. Ld. DR however, relied on the order of the Ld. CIT(A). The contents of which are recorded at para 5 to 5.4 of the order as under:- “5. Decision: 5.1 I have considered the submission of the appellant, perused the material placed on record and carefully gone through the order of the AO. The contentions raised by the appellant have been carefully examined with reference the factual matrix of the case as also the relevant provisions of the Act and the legal position as applicable to year under reference. The grounds of appeal are discussed and decided as under: 5.2 As per the order passed by the AO, the appellant has purchased an immovable property vide registration no. 2850/14, Book No. 1.00, Page No. 72, Village Susavan, District Bara on 22.10.2014 for a total consideration of Rs. 8,01,560/- (including stamp). However, as per the stamp valuation authority, the stamp value of the said property is Rs. 41,80,000/-. Το verify the actual value of the property under consideration, the AO has also made a reference to the Valuation Officer, Ajmer to provide the market value of the property under consideration. The Assistant Valuation Officer, Income Tax Department, Ajmer vide Valuation Report dated 05.12.2017 submitted his report to the AO. As per the valuation report dated 05.12.2017, the assessed value of the property is 41,80,000/-, Screenshot of the valuation report is enclosed hereunder:

P a g e | 5 ITA No. 1380/JPR/2025 Divya Yadav

Accordingly, the AO made addition of Accordingly, the AO made addition of Rs.33,78,440/- to the income of the assessee under to the income of the assessee under section 56(2)(vii) (b) of the Act. section 56(2)(vii) (b) of the Act.

5.3 The appellant in her submission has challenged the addition of Rs. 33,78,440/ 5.3 The appellant in her submission has challenged the addition of Rs. 33,78,440/ 5.3 The appellant in her submission has challenged the addition of Rs. 33,78,440/-under section56(2) (vii) (b). The assessee also relied upon the order passed by Income section56(2) (vii) (b). The assessee also relied upon the order passed by Income section56(2) (vii) (b). The assessee also relied upon the order passed by Income Tax Appellate Tribunal, Jaipur bench Jaipur order dated 03.10.2019 in thematter of Shri Appellate Tribunal, Jaipur bench Jaipur order dated 03.10.2019 in thematter of Shri Appellate Tribunal, Jaipur bench Jaipur order dated 03.10.2019 in thematter of Shri Khurshid Ahmed, jaipur Vs Income Tax Officer. However, perusal of Order passed by Khurshid Ahmed, jaipur Vs Income Tax Officer. However, perusal of Order passed by Khurshid Ahmed, jaipur Vs Income Tax Officer. However, perusal of Order passed by Hon'ble ITAT in said case, it is observed that the facts of said case is entirely diff Hon'ble ITAT in said case, it is observed that the facts of said case is entirely diff Hon'ble ITAT in said case, it is observed that the facts of said case is entirely different from the facts of case of appellant in present case. The appellant has failed to furnish any from the facts of case of appellant in present case. The appellant has failed to furnish any from the facts of case of appellant in present case. The appellant has failed to furnish any comparable sale/purchase instance in the area where property is situated in support of comparable sale/purchase instance in the area where property is situated in support of comparable sale/purchase instance in the area where property is situated in support of her contention. The appellant also could not able to furnish any docum her contention. The appellant also could not able to furnish any docum her contention. The appellant also could not able to furnish any documents to establish that whether the value so adopted or assessed by the stamp valuation authority has been that whether the value so adopted or assessed by the stamp valuation authority has been that whether the value so adopted or assessed by the stamp valuation authority has been disputed in any appeal or revision or any reference has been made before any other disputed in any appeal or revision or any reference has been made before any other disputed in any appeal or revision or any reference has been made before any other authority in support of her contention. Since, the appellant has ac authority in support of her contention. Since, the appellant has ac authority in support of her contention. Since, the appellant has accepted the fair market value of the property as assessed by the Stamp Valuation Authority to the tune of value of the property as assessed by the Stamp Valuation Authority to the tune of value of the property as assessed by the Stamp Valuation Authority to the tune of Rs.41,80,000/-, the provisions of section 56(2)(vii)(b) are duly applicable in the , the provisions of section 56(2)(vii)(b) are duly applicable in the , the provisions of section 56(2)(vii)(b) are duly applicable in the

P a g e | 6 ITA No. 1380/JPR/2025 Divya Yadav appellant's case. Therefore, it is a fit case to invoke the provisions of Sec.56(2)(vii) (b), which reads as under:- "56(2) In particular, and without prejudice to the generality of the provisions of sub-section (1), the following incomes, shall be chargeable to income-tax under the head "Income from other sources", namely:- (vii) Where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October 2009 but before the 1st day of April,2017,- (b) any immovable property, - (ii) for a consideration which is less than the aggregate fair market value of the property by an amount exceeding fifty thousand rupees, the aggregate fair market value of such property as exceeds such consideration: From a plain reading of the provisions, it is clear that section 56(2)(vii)(b) would apply to a situation where any immovable property is received for a consideration less than the Stamp Value determined by the Stamp Authority. Provisions of section 56(2)(vii)(b) of the Income Tax Act, 1961 clearly provides that in case of difference of stamp duty value and consideration paid, the difference amount of stamp duty value exceeding consideration paid shall be treated as Income from other sources. 5.4 Keeping in view of above facts, it is held that the AO has rightly made addition of Rs.33,78,440/- on account of difference between consideration price and the aggregate fair market value of the property, and therefore, addition made by the AO is sustained. Hence, the undersigned sees no reason to interfere with the orders of the Assessing Officer, and, the ground of appeal, as raised by the appellant as above, is dismissed. In the result, the appeal is dismissed. The present appeal stands disposed off.” 8. We have heard the rival contentions. The issue in dispute before us relates to the addition made to the income of the assessee of the difference between the stamp duty value/the value adopted by the D.V.O. for the purchase of an immovable property against the purchase consideration actually paid by the assessee. The stamp duty value of the property was Rs.41,80,000/-, which was reiterated by the D.V.O. in his valuation report, while the actual consideration paid by the

P a g e | 7 ITA No. 1380/JPR/2025 Divya Yadav assesseewasRs.8,01,560/-, and addition accordingly was made of the difference of Rs.33,78,440/- to the income of the assessee by invoking the provisions of Section 56(2)(vii)(b) of the Act. 9. We find merit in the contention of the ld. counsel for the assessee that the Ld. CIT(A) has confirmed the addition ignoring all the submissions made by the assessee on the merits of. As rightly pointed out by the ld. Counsel for the assessee, the assessee had stated that the D.V.Os valuation of the property relating the stamp duty value was incorrect for two reasons:- 1. The assessee had submitted to the D.V.O., that the character of the property was different justifying its lower rate since it was SC/ST land and was situated in a depth of 7 feet from the road, which the D.V.O. had ignored while determining its fair market value. 2. The assessee had also pointed out to the Ld.CIT(A) that the D.V.O. was required to determine the fair market value of the property, and the stamp duty value was the circle rate of the property which adopted similar rate for an entire locality disregarding peculiar factors of each property effecting its fair market value. That surely the stamp duty value could not therefore be adopted for determining the fair market value of the property. He had supported his contention by the order of the ITAT Jaipur Benches in the case of Shri Khurshid Ahmed, Jaipur (Supra) holding as under:- “But the both authority has not considered submission of the appellant also not provided reasonable opportunity of being heard and made addition of Rs. 33,78,440/-,

P a g e | 8 ITA No. 1380/JPR/2025 Divya Yadav It is very humbly submitted that it has been held by honorable Income Tax Appellate Tribunal, Jaipur bench Jaipur order dated 3rd October 2019 in the matter of Shri Khurshid Ahmed, jaipur Vs Income Tax Officer, Ward-3:-

On a perusal of valuation report, however, we find that even the valuation by the DVO has placed too much of emphasis on the assessment or valuation by the stamp valuation authority. This is neither desirable nor permissible. The reason is this. The valuation by the stamp valuation authority is based on the circle rates. The reason is this. The

Valuation by the stamp valuation authority is based on the circle rates. These circle rates adopt uniform rate of land for an entire locality, which inherently disregards peculiar factors and possibilities property. Even in a particular area, on account of location factors and possibilities of commercial use, there can be wide variations in the prices of land. However circle rates disregards all these factors and adopt a uniform rate for all properties in that particular area. If the circle rate fixed by the stamp valuation authorities was to be adopted in all situations, there was no need of reference to the DVO under s.50C(2). The sweeping generalizations inherent in the circle rates cannot hold good in all situations. It is, therefore, not uncommon that while fixing the circle rates, authorities do err on the side of excessive caution by adopting higher rates of the land in a particular area as the circle rate. In such circumstances, the DVO's blind reliance on circle rates is unjustified. The DVO has simply adopted the average circle rate of residential and commercial area, on the ground that interior area of the locality. where the assessee's property is situated, is mixed developed area i.e. shops and offices on the ground floor and residence on the upper floors, When DVO's valuation required to compare the same with the valuation by the stamp valuation authority, it is futile to base such a report on the circle report itself. Such an approach will render exercise under s.50C(2) a meaningless ritual.

In our considered view, in such, the DVO's report should be based on consideration stated in the registration documents for comparable transactions, as also factors such as inputs from other source about the market rates, For the reasons set out above, and with these observation,

we remit the matter to the file of the AO. The DVO will value the property do novo, in the light of our above observation, and in case the valuation so arrived at by the DVO is less than Rs. 11,42,100, the AO shall adopt the fresh valuation so done by the DVO for the purpose of computing capital gains under s. 48 of the Act. We direct so.”

P a g e | 9 ITA No. 1380/JPR/2025 Divya Yadav property and submitted an application under Rule 46A for admission of the additional evidences, which is reproduced at page 5 of the order as under:- “Appellant beg to submit application under rule 46A :- For additional evidence to submit sale deed of Ishhak Mohammad etc. sold to Smt. Rekha Agrawal wife of Hariom Agrawal and Anita Agrawal wife of Satish Agrawal Resident of Baran in which cost of 1.6 hector agriculture land has been taken Rs. 24,00,000/- and also DLC rate is 24,45,599/- has been determine by registration authority on 24th Aug, 2015. This land is situated at Susawan Maal Patwar Halka Baran Tehsil Baran where appellant has purchased agriculture land and it is a proper proof that market rate of land in the question of the appellant is as shown by him. It is also submitted that appellant has purchased land on 22 Oct, 2014 whereas cost of land produced as evidence is on 24thAug, 2015. This evidence was not submitted before D.V.O. being received by appellant thereafter.

The cost of land of shri ishakmohammad and siddikmohammad is Rs 24,00,000 for 1.16 hectare irrigated land on 24.08.2015 where is agriculture land of appellant is only 0.76 hectare and non irrigated and its cost was Rs. 8,01,560 and appellant has purchase land on 22.10.2014. Appellant also submitting copy of judgment passed by honorable Income Tax Appellate Tribunal Ahmedabad in the case of Solitaire Fabrics Pvt. Ltd. Vs Department of Income TAX in which honorable court has discussed this issue and delete the addition made on the basis of value adopted or assessed by the stamp valuation authority excceds the fair market value of the property. Therefore it is prayed to allow the appeal of the appellant and kindly delete the addition so made by the learned AO. Thanking you, You're faithfully Divya Yadav W/O Gajendra Singh Yadav 47, TARU CHAYA NAGAR Jaipur, Rajasthan - 302018"

We have noted that, the ld. CIT(A) has ignored all these contentions of the assessee. He has given no findings on any of the contentions made by the assessee as above, except for stating that the decision of the ITAT Jaipur Benches in the case of Shri Khurshid

P a g e | 10 ITA No. 1380/JPR/2025 Divya Yadav Ahmed, Jaipur (Supra) is distinguishable. As pointed out, by the ld. Counsel for the assessee, the Ld. CIT(A) has not specified the distinction of the said decision of the ITAT Bench in his order. 11. We therefore hold that the Ld.CIT(A)’s order upholding the adoption of value stated by the DVO of the land sold by the assessee needs to be rejected for not having dealt with the contentions of the assessee agitating the same on merits. Moreover we have gone through the order of the ITAT in the case of Khurshid Ahmed (supra) and find that it categorically holds valuation by the DVO placing too much of emphasis on the assessment or valuation by the stamp valuation authority as neither desirable nor permissible. The reason, it is clarified, is that the valuation by the stamp valuation authority is based on the circle rates. These circle rates adopt uniform rate of land for an entire locality, which inherently disregards peculiar factors and possibilities property. Even in a particular area, on account of location factors and possibilities of commercial use, there can be wide variations in the prices of land. However circle rates disregards all these factors and adopt a uniform rate for all properties in that particular area. The ITAT has categorically noted that if the circle rate fixed by the stamp valuation authorities was to be adopted in all situations, there was no need of reference to the DVO under s. 50C(2). The sweeping generalizations inherent in the circle rates, it held, cannot hold good in all situations. The ITAT has categorically held that the DVO's blind reliance on circle rates is unjustified.

P a g e | 11 ITA No. 1380/JPR/2025 Divya Yadav 12. It is abundantly clear therefore that the decision of the ITAT squarely applies to the facts of the present case, wherein also the DVO has adopted the stamp duty rates for determining the Fair Market Value of the property. The report of the DVO, we hold therefore, cannot be relied upon for determining the FMV of the property in the present case. 13. We therefore hold that the authorities below had wrongly relied on the DVO’s report in the present case for adopting the value of the property sold by him and invoking section 56(2)(vii)(b) of the Act as a consequence. 14. Further, we agree with the ld. Counsel for the assessee that the Ld. CIT(A) has confirmed the addition byinterpreting the law, in this regard, contained in Section 56(2)(vii)(b) of the Act ,incorrectly. 15. Ld. Counsel has stated that the Ld.CIT(A) noted the assessee to have not disputed the stamp duty value of the property in support of her contention. That the assessee had accepted the fair market value of the property as assessed by Stamp Value Officer. Noting so he held that the provisions of section 56(2)(vii)(b) had been rightly invoked in the present case. 16. The provisions of Section 56(2)(vii)(b) of the Act dealing with reference to D.V.O. are provided in the proviso which reads as under:- …………… Income from other sources. 56(1) ………

P a g e | 12 ITA No. 1380/JPR/2025 Divya Yadav (2) In particular, and without prejudice to the generality of the provisions of sub-section (1), the following incomes, shall be chargeable to income-tax under the head "Income from other sources", namely :— ……….. (vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009 but before the 1st day of April,2017,— ………… (b) any immovable property,— (i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; (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 exceeds such consideration: …………..

Provided that where the stamp duty value of immovable property as referred to in sub-clause (b) is disputed by the assessee on grounds mentioned in sub-section (2) of section 50C, the Assessing Officer may refer the valuation of such property to a Valuation Officer, and the provisions of section 50C and sub- section (15) of section 155 shall, as far as may be, apply in relation to the stamp duty value of such property for the purpose of sub-clause (b) as they apply for valuation of capital asset under those sections :

P a g e | 13 ITA No. 1380/JPR/2025 Divya Yadav 50C(1)………. (2) Without prejudice to the provisions of sub-section (1), where— (a) the assessee claims before any Assessing Officer that the value adopted or assessed or assessable by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer; (b) the value so adopted or assessed or assessable by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court, the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clause (i) of sub-section (1) and sub- sections (6) and (7) of section 23A, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act. ………. 18. A bare perusal of the above reveals that the, assessee can object the adoption of stamp duty value on the ground that the value adopted by the stamp valuation authority exceeds the fair market value of the property and the value adopted or assessable by the stamp valuation authority has not been disputed in any appeal or revision, or no reference has been made before any Authority, Court or High Court. Therefore, the ground of objection by the assessee can be that of the stamp duty value being different from the fair market value of the property. 19. The Ld. CIT(A) however, has interpreted the provision to hold that, the assessee ought to have objected to the stamp duty value before the stamp valuation authorities in any appeal or revision and finding the assessee not to have done so or not furnishing any documentary evidence he has held that the assessee has accepted the fair market

P a g e | 14 ITA No. 1380/JPR/2025 Divya Yadav value of the property as assessed by the stamp valuation authority. This clearly is not what the law states. 20. As noted above, the requirement for reference to the D.V.O. is the mere objection of the assessee to the AO, that the stamp duty value was not correct and did not reflect the fair market value of the property. Therefore, this reasoning of the Ld. CIT(A), for confirming the addition made in the hands of the assessee by adopting fair market value of the property as assessed by the stamp valuation authority to the tune of Rs.41.80 lakhs, we hold is incorrect. 21. In conclusion, we hold that, the Authorities below, have wrongly adopted the value certified by the D.V.O. as the fair market value of the property sold by the assessee at Rs.41.80 lakhs, since as the facts demonstrate the D.V.O had adopted the stamp duty value of the property as fair market value, which ITAT in the case of Shri Khurshid Ahmed, Jaipur (Supra) has clearly held as not being equated to the fair market value of the property. That the stamp duty value only reflects circle rates adopted by the revenue authorities for the purposes of collecting stamp duty on transfer of properties, and which circle rates are on the conservative side, and do not reflect the fair market value of the property. 22. We find that the adoption of the D.V.Os report was also incorrect, for the reason, that the assessee had pointed out, the reasons why the land purchased by it had from low fair market value on account of being SC/ST land and situated far the road, which factors were not considered by the D.V.O. while determining the fair market

P a g e | 15 ITA No. 1380/JPR/2025 Divya Yadav value of the property. The adoption of the D.V.Os report is also to be found incorrect for the reason, that the assessee had submitted comparable instances of property sold in the same region at evidences and justifying the rate at which the assessee sold its property, but these instances were also ignored by the Authorities below. 23. In the light of the above, we see no reason to confirm the order of Ld. CIT(A), adopting the value of the property sold as noted by the D.V.O. and thereafter, holding that the assessee had purchased the property for a far less consideration to the tune of Rs.8,01,560/-. Thus, making the addition of the difference to the income of the assessee by invoking the section 56(2)(vii)(b) of the Act. The addition therefore made Rs. 33,78,440/- is deleted. 24. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 29.07.2026

Sd/- Sd/- (T.R. Senthil Kumar) (Annapurna Gupta) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated 29.07.2026 Mittali, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT

P a g e | 16 ITA No. 1380/JPR/2025 Divya Yadav By Order, Asst. Registrar ITAT, Jaipur