UMAKANT TEWARI,MUMBAI vs. ITO WARD 42(1)(4), MUMBAI, KAUTILYA BHAVAN

The learned counsel for the assessee, at the outset, submitted that the appeal is filed with a delay of 60 days, and the assessee filed a copy of the affidavit of the Chartered Accountant explaining the reason for the delay in filing the appeal before the Tribunal.

Referring to the affidavit, learned counsel submitted that the Chartered Accountant filed a petition for rectification of the order passed by the learned CIT(Appeals), anticipating that the learned CIT(Appeals) would rectify the mistake, as according to the Chartered Accountant, that since the difference in actual sale consideration and the value adopted by the DVO is less than 5%, that is, approximately 4.3%, and is within the tolerable limit prescribed under section 50C of the Act, he was pursuing the application under section 154 before the learned CIT(Appeals).

Learned counsel for the assessee submitted that, as the application filed by the assessee under section 154 before the learned CIT(Appeals) was rejected on 16.3.2026, holding that the issue is debatable and not a mistake apparent on record, the assessee immediately, on the advice of the Chartered Accountant, filed the appeal on 01.04.2026, which resulted in a delay of 60 days.

Therefore, learned counsel for the assessee submitted that since the assessee was pursuing an alternative remedy by filing an application under section 154 before the learned CIT(Appeals), the assessee was under the bona fide belief / impression that the learned CIT(Appeals) would rectify the mistake, and, therefore, did not prefer an appeal before the Tribunal in time.

Learned counsel submitted that the delay in filing the appeal before the Tribunal is neither wilful nor intentional, but for the reasons explained above, and, therefore, requested that the delay of 60 days in filing the appeal before the Tribunal be condoned.

On hearing both the parties and perusing the materials before us, we find that the rectification application was filed by the assessee before the learned CIT(Appeals), which was dismissed by the National Faceless Appeal Centre, which shows the bona fides of the assessee in pursuing the alternate remedy. Therefore, we find that the assessee was prevented by reasonable cause from filing the appeal within time. Thus, we condone the delay and admit the appeal for adjudication on merits.

Coming to the merits of the addition, learned counsel for the assessee, referring to page No. 16 of the paper book, which is the agreement for sale, submitted that the sale consideration agreed by the parties was Rs. 80,00,000/-. Since the said value is less than the stamp duty value, the Assessing Officer referred the valuation of the property to the DVO.

Learned counsel, referring to page 1 of the paper book, which is the report of the DVO, submitted that the DVO arrived at the value of the property at Rs. 83,54,000/- as against Rs. 80,00,000/- of sale consideration declared by the assessee.

Learned counsel submitted that the difference in value adopted by the DVO and the actual sale consideration is less than 10%, no addition is required to be made, as the provisions of section 50C itself provide for a tolerance limit of 10%.

Learned counsel for the assessee further, placing reliance on the decision of the coordinate bench in the case of Shri Ashutosh Sinha versus ITO in ITA No. 643/MUM/2023 dated 29-8-2023, submitted that an identical issue had been considered by the coordinate bench, and, referring to para 14 of the said order, submitted that the third proviso to section 50C of the Act, which provided that where the value adopted or assessed or assessable by the stamp valuation authority does not exceed 10% of the consideration received, the same shall be taken as the full value of consideration. Further the Tribunal also agreed with the contention of the assessee that if the difference in valuation is less than 10% between the fair market value (FMV) and the sale consideration shown, then no addition is required to be made.

Learned counsel for the assessee further, referring to para 14 of the decision, submitted that the Tribunal also took note of the fact that though this provision had been brought into the statute with effect from 01.04.2019, since various courts have held that the same is a beneficial provision, the benefit should be given retrospective effect, and thus concluded that the same is applicable even for assessment years prior to the assessment year 2019-20.

Learned counsel for the assessee further submitted that a similar view has been taken in the case of Shri Vipul Otarmal Jain versus ITO in ITA No. 439/MUM/2026 dated 8-4-2026. Learned counsel for the assessee also placed reliance on the decision of the Mumbai Bench in the case of M/s John Fowler India Private Limited vs. DCIT in ITA No. 7545/MUM/2014 dated 25-1-2017, to which one of us is a party (JM), and submitted that the coordinate bench, following the decision of the Jaipur Bench in the case of

Heard rival contentions, perused the orders of the authorities and the decisions relied on. On perusal of the agreement for sale, which is placed at page 13 of the paper book, we observe that the assessee purchased the property by paying sale consideration of Rs. 80,00,000/-. As the stamp duty valuation for the said property was more than Rs. 80,00,000/-, the Assessing Officer referred the valuation to the DVO, and the DVO valued the property at Rs. 83,54,000/-.

The contention of the assessee is that since the difference in valuation between the DVO's value and the sale consideration actually paid by the assessee is less than 10%, applying the third proviso to section 50C of the Act, there should not be any addition since the difference is less than 10%.

The contention of the assessee was also that though the proviso was inserted with effect from 01.04.2019, since it is a beneficial provision, it should be applicable retrospectively even prior to 01.04.2019, and placed reliance on the decisions of various coordinate benches as referred to above.

We find considerable merit in the submissions of the learned counsel for the assessee. The coordinate bench in the case of Shri Ashutosh Sinha vs. ITO in ITA No. 643/MUM/2023 dated 29-8-2023 observed as under:

Similarly, in the case of Shri Vipul Otarmal Jain vs. ITO in ITA No. 439/MUM/2026 dated 08-04-2026, the coordinate bench, considering various decisions of the coordinate benches of Kolkata and Mumbai, held as under:

Similarly, the coordinate bench of Mumbai in the case of M/s John Fowler (India) Private Limited vs. DCIT in ITA No. 7545/MUM/2014 dated 25.01.2017 held as under:

In view of the above decisions and, the facts being identical, following the above said decisions, we direct the Assessing Officer to adopt the sale consideration as reported by the assessee, since the difference between the value determined by the DVO and the sale consideration actually paid by the assessee is less than 10%. Accordingly, the grounds raised by the assessee are allowed.

In the result, appeal of the assessee stands allowed.