BHIKHAMCHAND S. SHAH,NA vs. ARIVS.ITO WARD-2, NAVSARI

आदेश / O R D E R

PER BIJAYANANDA PRUSETH, AM:

raised by the assessee are as under: “1. The Learned CIT(A) has erred in law and in facts and confirm the addition to the extent of Rs.3,00,000/- u/s 50C of the Act.

2. The learned CIT(A) has erred in making addition ignoring the fact the difference in value adopted by the assessee and FMV (determined by the DVO) of the property u/s 50C is within the range of + / -10% as per the proviso to section 50C and applied retrospectively also.

3. The appellant craves leave to add, amend, alter or delete any or all the above grounds of appeal.”

/AY.2014-15 Bhikhamchand S. Shah 3. The facts of the case in brief are that the assessee filed return of income for AY.2014-15 on 31.07.2014, declaring total income of Rs.25,27,770/-. The assessee attended hearings before the AO and filed various details and documents. During the year, assessee has sold immovable property at Samroli, Taluka – Chikhli, Navsari for a consideration of Rs.69,00,000/-. As per the information received from the Stamp Valuation Authority, the market value of the said property was Rs.83,74,189/-. Thus, there was difference of Rs.14,74,189/-. On being show caused as to why the said amount of Rs.14,74,189/- should not be taxed u/s 50C of the Act, the assessee did not file any reply. Hence, addition of Rs.14,74,189/- was made u/s 50C of the Act. 3.1 Aggrieved by the order of AO, the assessee filed appeal before the CIT(A), Valsad, who confirmed the addition made by AO. On further appeal, the ITAT, Surat set aside the order of CIT(A) and remitted it to file of CIT(A) to adjudicate the issue afresh on merits. Accordingly, the CIT(A) issued notice for fresh hearing and obtained submission of assessee, which is reproduced at para 5 of the appellate order. It was submitted that the impugned land was considered as NA lndustrial land instead of NA Commercial land for the purpose of stamp valuation by the sub-registrar. If it is considered as land for commercial purpose, the market value would be Rs.69,46,510/- and the difference would be only Rs.46,510/-, which is within the 5% range and cannot be added u/s 50C of the Act. The CIT(A) forwarded the submission of appellant to AO and asked AO to make reference to the DVO. The DVO submitted the valuation estimating the fair /AY.2014-15 Bhikhamchand S. Shah market value (FMV) at Rs.72,00,000/- as against the stamp duty valuation of Rs.83,74,189/-. Thus, the difference was Rs.3,00,000/-, which was less than 10% of the valuation by the DVO. Hence, according to appellant, no addition is liable to be made as per the 3rd Proviso of section 50C of the Act. The CIT(A) did not accept the contention of the assessee, which is at para 6.5 and 6.6 of the appellate order. He observed that 3rd Proviso was inserted by Finance Act, 2018 w.e.f. 01.04.2019 to the effect that where the valuation of stamp valuation authority does not exceed 105% of the consideration received as a result of transfer, the consideration so received shall be deemed to be the full value of consideration for the purpose of section 48 of the Act. This margin was revised upward to 110% w.e.f. 01.04.2021. The appellant’s case pertains to AY.2014-15 when the said proviso had not been inserted in the Act. He, therefore, held that in absence of any provisions in the statute for providing such margin of tolerance between the valuation as per the DVO and actual sale consideration, the contention of assessee cannot be accepted. Accordingly, he directed AO to adopt the value of Rs.72,00,000/- as arrived at by the DVO as full value of consideration.