VISHNU MADHUKAR KANERKAR,MUMBAI vs. JURISDICTIONAL AO WARD 22(3)(6), MUMBAI, MUMBAI

आयकरअपीलीयअिधकरण�ायपीठमुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI, JM & SHRI ARUN KHODPIA, AM I.T.A. No.1974/Mum/2026 (Assessment Year:2017-18) Vishnu Madhukar Kanerkar Jurisdictional AO Ward 22(3)(6), Flat No.4, Amee Kripa CHS, Mumbai Subhash Nagar, Pandurang Vs. Piramal Chamber, Mumbai, AO Type Bagve Marg, Mumbai-400011 W, AO Number 93, Range Code 197, Mumbai-400012 PAN: AMEPK2287R Assessee- अपीलाथ� / Appellant Revenue-��थ�/ Respondent :

Assesseeby : Shri Anil Sathe : Smt. B. Brahma Vidya – Sr. DR Revenueby : 12.05.2026 Date of Hearing : 27.05.2026 Date of Pronouncement

O R D E R Per Arun Khodpia, AM: This appeal is preferred by the assessee, directed against the order of the Commissioner of Income Tax Appeals, National Faceless Appeal Centre (NFAC), Delhi [in short, “the Ld. CIT(A)”], dated 22.12.2025 for the assessment year 2017-18,arises from the assessment order under section 147 r.w.s 144B of the Income Tax Act [in short, “the Act”] dated 25.05.2023, passed by Assessment Unit, Income Tax Department [in short, “the Ld.AO”]. The grounds of appeal raised by the assessee, are as under:

ITA No. 1974/Mum/2026 Vishnu Madhukar Kanerkar “1. The learned Commissioner of Income Tax Appeals erred in confirming the order of the learned assessing officer in adding Rs. 31.76.144/-, the difference between purchase consideration and the valuation as per the stamp duty authorities. 2. The learned Commissioner of Income Tax Appeals failed to consider the valuation as per the Departmental Valuation Officer report valuing property at Rs. 92,42,000 which is within 10% of the purchase consideration of Rs. 85,00,000 and the same was already on record. 3. The learned Commissioner of Income Tax Appeals failed to appreciate the import of decisions rendered by different judicial For a to the effect that the amendments by the Finance Act in section 56(2)(x) w.e.f. 01.04.2019 prescribing price band of 10% is curative in nature and being beneficial provision would apply retrospectively from the date section 56(2)(vii)(b) was inserted. 4. Without prejudice to the above and strictly in alternative, the learned Commissioner of Income Tax Appeals failed to appreciate that the value as per the Valuation Report of the Registered valuer submitted by the appellant, is less than the Purchase consideration. Hence the question of applying the provisions of section 56(2)(vii)(b) of the Act does not arise. 5. The learned Commissioner of Income Tax Appeals completely ignored the fact that the stamp duty valuation is on the basis of a ready reckoner rate which is the standard rate applicable to the said area and that in the same area the valuation of flats may vary significantly, on account of a number of circumstances namely the age of the building, the vicinity the economic status of residents, and various other factors. 6. The learned Commissioner of Income Tax - Appeals disregarded the fact that the process of valuation is essentially an estimate. While the ready reckoner rate is a standard rate, when a valuer values property it is the opinion of an expert. Therefore the expertise has to be given its du weight and that this is a more scientific valuation and therefore should be adopted. 7. Without prejudice to ground no. 1 to 6 and strictly in the alternative, the learned Commissioner of Income Tax Appeals erred in upholding the order of the Icarned Assessing Officer levying interest u/s 234C of the Act.”

ITA No. 1974/Mum/2026 Vishnu Madhukar Kanerkar to which the valuation of property was only Rs. 82,20,000/-. Further, the issue of valuation was referred to Departmental Valuation Officer (DVO) u/s 55A of the Act by the AO, who valued the property at Rs. 92,42,000/- vide report dated 09.06.2023 (i.e. after completion of impugned assessment u/s 143(3) dated 25.03.2023. The assessee, contended that the difference of value of property between the actual consideration and independent registered valuers report is less than 10%, so it is covered by the 3rd proviso to section 50C amended w.e.f. 01.04.2019, being beneficial and curative in nature so have a retrospective effect, accordingly no addition u/s 56(2)(vii)(b) is called for.

ITA No. 1974/Mum/2026 Vishnu Madhukar Kanerkar 6. At the outset, Ld. AR of the assessee submitted that the present issue, is squarely covered by the jurisprudence, which supports the contentions of the assessee. The reasons which are the basis for disallowance are (i) Section 56(2)(vii)(b) does not provide for substitution of stamp duty valuation by the valuation by DVO, and (ii) 10% safe harbour limit shall be effective from 01.04.2019 onwards, which will not apply for AY 2017-18 in the present case. Ld. AR submitted that both the questions raised by the revenue are answered in favour of the assessee, by the Hon’ble courts, thus being the difference even after the report of DVO is less than the prescribed safe harbour limit of 10%, no addition u/s 56(2)(vii)(b) is warranted.

ITA No. 1974/Mum/2026 Vishnu Madhukar Kanerkar 23(3)(6), Mumbai vide order dated 23.01.2026, wherein the Hon’ble Bench had referred to the judgment of Hon’ble Gujarat High Courtin the case of Dr. Rajivraj Ranbir Singh Choudhary vs ACIT, 393 ITR 650 (Gujarat) and observed that the amendment in harbour provisions are intended to avoid hardship to genuine transactions, so are curative and retrospective in nature. It is further held that the safe harbour limit in relation to FMV determined by the DVO was to be applied in terms of provisions of 3rd proviso to section 50C(1) of the Act, as the valuation made by DVO replaces the stamp duty value for all practical purposes.

ITA No. 1974/Mum/2026 Vishnu Madhukar Kanerkar sustain and tenable. We, therefore, set aside the order of Ld. CIT(A) and direct to vacate the impugned addition.

Sd/- Sd/- (BEENA PILLAI) (ARUN KHODPIA) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, Dated : 27-05-2026. Ankit K., Sr. PS

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT

BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai