BUTTEPATIL PROPERTIES,PUNE vs. INCOME-TAX OFFICER, WARD - 3(1), PUNE

आदेश / ORDER

PER PARTHA SARATHI CHAUDHURY, JM :

This appeal preferred by the assessee emanates from the order of Ld. CIT(Appeal), Pune-3 dated 27.03.2018 for the assessment year 2014-15 as per following grounds of appeal on record:

“1. On the facts and in the circumstances of the case and in law the learned authorities have erred in making the addition of Rs.5,74,924/- by invoking provisions of section 43CA of the Income Tax Act, 1961 by rejecting appellant’s submission in this regard. Appellant prays for deletion of entire addition.

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The appellant craves for to leave, add, alter, modify, delete about ground of appeal before or at the time of hearing, in the interest of natural justice.”

by invoking provisions of section 43CA of the Income Tax Act, 1961

(hereinafter referred to as ‘the Act’) on account of difference between stamp

duty valuation and actual consideration.

carrying on business of Builders, Promoters and Developers since 2011 and

assessed to income tax by the ITO, Ward 7(1), Pune. The assessee has

declared total income of Rs.2,45,750/- for the assessment year 2014-15 by

filing revised return dated 08.12.2014 and the assessment was completed

u/s.143(3) of the Act vide assessment order dated 22.12.2016. During the

year under consideration, the assessee has sold a flat to Premal Vasant

Wagh for actual consideration of Rs.67,20,000/- vide document

No.5363/2013 dated 22.04.2013 whereas stamp duty value adopted by the

government was Rs.72,94,924/- which is more than the value recorded in the

books of accounts. Accordingly, the Assessing Officer added Rs.5,74,924/- to

the total income of the assessee u/s.43CA of the Act.

addition made by the Assessing Officer and also observed that the case laws

relied on by the assessee are related to Section 50C of the Act, whereas, the

provisions of section 43CA were invoked which is inserted by the Finance Act,

2013, w.e.f. 01.04.2014.

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provision of section 43CA is identical in nature with respect to Section 50C of

the Act. The Ld. AR has placed reliance on the following decisions :

i) Rahul Construction Vs. DCIT, Pune ITA No.1543/PN/2007 for A.Y.2004-05 ii) Smt. Sita Bai Khetan Vs. Income Tax Officer, Jaipur, ITA No.826/JP/2013 for A.Y.2010-11.

While placing reliance on the aforesaid decisions, it was contended by

the Ld.AR that in these cases, there was difference between stamp duty

valuation adopted by the Government & the actual consideration received. It

was held that, if the difference is less than 10% then stamp duty/market

value, the difference shall not be considered for the purpose of section 50C of

the Act. Since Section 43CA is having identical situation as referred to in

Section 50C therefore, decisions of the above cases shall apply also and

covered by section 43CA of the Act.

Authorities.

provisions of the Act i.e. Section 50C and Section 43CA. Section 50C deals

with special provision for full value of consideration in certain cases with

regard to capital asset. Section 43CA is also special provision for full value of

consideration for transfer of assets other than capital assets in certain cases.

In this context, the application of the case laws with regard to Section 50C is

applicable to Section 43CA as well.

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Bench of the Tribunal, Pune in the case of Rahul Construction Vs. Deputy

Commissioner of Income Tax (supra.). In that case, assessee received an

amount of Rs.19,00,000/- as sale consideration on account of sale of

basement of a building. Stamp Valuation authorities have adopted the value

at Rs.28,73,000/- for the purpose of stamp duty on being objected by the

assessee for substitution of the same figure under section 50C(2). The

Assessing Officer referred the matter to the DVO who determined the fair

market value of the property on the date of sale at Rs.20,55,000/-. The Pune

Bench of the Tribunal observed that this itself shows that there is a wide

variation between the two values and that they are based on some estimate.

Difference between the sale consideration shown by the assessee and the fair

market value determined by the DVO is only Rs.1,55,000/- which is less than

10%. In view of the fact that valuation is always a matter of estimation where

some difference is bound to occur. The Assessing Officer was not justified in

substituting the value determined by the DVO for the sale consideration

disclosed by the assessee. Therefore, Assessing Officer was directed to take

Rs.19,00,000/- only as the sale consideration of the property.

This case of Rahul Construction Vs. DCIT (supra.) was also followed by

the Pune Bench of the Tribunal in ITA No.2704/PUN/2016, therein also, the

benefit of 10% difference of sale value was allowed in favour of the assessee.

Thus, following the aforesaid decisions, we are of the considered view that

difference between the sale consideration of the property shown by the

assessee and the fair market value determined by the DVO under section

50C(2) being less than 10%, the Assessing Officer is not justified in

substituting the value determined by the DVO for the sale consideration

disclosed by the assessee.

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Order pronounced on 08th day of February, 2019.

Sd/- Sd/- D. KARUNAKARA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER

पुणे / Pune; �दनांक / Dated : 08th February, 2019. SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :

अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT (Appeal), Pune-3. 4. The Pr. CIT-2, Pune. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक-सद�य” ब�च, 5. पुणे / DR, ITAT, “SMC” Bench, Pune. गाड� फ़ाइल / Guard File. 6.

// True Copy // आदेशानुसार / BY ORDER,

�नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.

6 ITA No. 682/PUN/2018 A.Y.2014-15

Date 1 Draft dictated on 07.02.2019 Sr.PS/PS 2 Draft placed before author 07.02.2019 Sr.PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr.PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order