If difference between investment on house property and valuer's report is so meager that one could assume it to be bona fide difference fit to be ignored, then addition on income of assessee would subject to be deleted.

Held Tribunal has heard both the parties and perused the records, especially the impugned order and the case laws cited by both the parties. Tribunal find that Ld. CIT(A) has sustained the addition of Rs. 6,07,000 made by AO for the difference between the actual sale consideration and fair market value estimated by the departmental valuation officer . In the absence of any statutory provision, no hard and fast rule can be laid down in regard to the percentage of difference which can be ignored. The difference between the assessee and the valuer was less than 15 per cent. Not only this, the construction of the house was spread over a period of 7 years. In the facts of the present case the difference between the plea of the assessee on the issue on investment on house property and valuer's report was so meager that one could assume it to be bona fide difference fit to be ignored." Keeping in view of the facts and circumstances of the case and respectfully following the precedent, as aforesaid, Tribunal deletes the addition in dispute and allow the grounds raised by the assessee. (Para 7)

The Assessee has filed the present appeal against the impugned order dated 01/4/2016 passed by the Ld. Commissioner of Income Tax (Appeals)-11, New Delhi pertaining to the assessment year 2012-13.

2. The following grounds have been raised in the Assessee’s appeal.

1. That the learned CIT (A) -11, New Delhi has erred both in law and on facts. of the case in sustaining the addition of Rs. 6,07,000 made by AO for the difference between the actual sale consideration and fair market value estimated by the departmental valuation officer by complete disregard to material placed on record, which deserves to be deleted.

2. That the difference of Rs. 6,07,000/- between the sale consideration of Rs. 55,00,000/- and fair market value of Rs. 61,07,000/- estimated by the departmental valuation officer being 11.04%, which is marginal and well within tolerance limit/ band of 15% laid down by various Courts, the Ld. CIT(A)-11, New Delhi should have deleted the resultant addition.

3. That the authoritative decisions relied upon by the assessee which were squarely applicable over his case, we arbitrarily brushed aside by the learned -CIT(A) -11, New Delhi for no rational and just reason and by complete disregard to the judgment of Hon'ble Apex Court in the case of CIT Vs. Vegetable Products reported in 88 ITR 192.

5. That the appellate order arbitrary, capricious and against deserves to be quashed/annulled.

The appellant seeks permission to modify and/or prefer any other ground of appeal as the circumstances of the case

4. Against the impugned order dated 04.12.2017 of the Ld. CIT(A), assessee is in appeal before the Tribunal.

5. During the hearing, Ld. Counsel of the assessee has stated Ld. CIT(A) has erred both in law and on facts of the case in sustaining the addition of Rs. 6,07,000 made by AO for the difference between the actual sale consideration and fair market value estimated by the departmental valuation officer by complete disregard to material placed on record, which deserves to be deleted. He further stated that the difference of Rs. 6,07,000/- between the sale consideration of Rs. 55,00,000/- and fair market value of Rs. 61,07,000/- estimated by the departmental valuation officer being 11.04%, which is marginal and well within tolerance limit/ band of 15% laid down by various Courts, the Ld. CIT(A), New Delhi should have deleted the resultant addition. In support of his contention he relied upon the decision of the Hon’ble Patna High Court in the case of Bimla Singh vs. CIT reported (2009) 308 ITR 71 (Patna) and stated that the issue involved in the present appeal is squarely covered by this decision, hence, he requested that by following the same ratio, the appeal of the assessee may be allowed.

6. On the contrary, Ld. DR relied upon the orders of the authorities below and relied upon the case laws as referred in the impugned order.

7. I have heard both the parties and perused the records, especially the impugned order and the case laws cited by both the parties. I find that Ld. CIT(A) has sustained the addition of Rs. 6,07,000 made by AO for the difference between the actual sale consideration and fair market value estimated by the departmental valuation officer. I further note that the difference of Rs. 6,07,000/- between the sale consideration of Rs. 55,00,000/- and fair market value of Rs. 61,07,000/- estimated by the departmental valuation officer being 11.04%, which is marginal and well within tolerance limit/ band of 15% laid down in the decision of the Hon’ble Patna High Court in the case of Bimla Singh vs. CIT reported (2009) 308 ITR 71 (Patna) wherein it was held that “that in valuation of the house property bonafide difference is bound to occur. In the absence of any statutory provision, no hard and fast rule can be laid down in regard to the percentage of difference which can be ignored. The difference between the assessee and the valuer was less than 15 per cent. Not only this, the construction of the house was spread over a period of 7 years. In the facts of the present case the difference between the plea of the assessee on the issue on investment on house property and valuer’s report was so meager that one couold assume it to be bona fide difference fit to be ignored.” Keeping in view of the facts and circumstances of the case and respectfully following the precedent, as aforesaid, I delete the addition in dispute and allow the grounds raised by the assessee.

8. In the result, the Appeal filed by the assessee stands allowed.

Order pronounced on 14/05/2018.

Sd/-

[H.S. SIDHU]

JUDICIAL MEMBER

Date 14/05/2018

LEGAL REFERENCES

Form 16 Form ODI Section 6 Section 1 Income Tax Act Section 147 Section 148 Section 61 Section 55 Section 143 Section 271(1)(c) Section 234A Section 50C Section 86

CONCEPTS

SRE

Similar Ripples

Questions

There is no question

If difference between investment on house property and valuer's report is so meager that one could assume it to be bona fide difference fit to be ignored, then addition on income of assessee would subject to be deleted.

Write your Comment

Generic

Reportdata/518.pdf

Would you like to edit this news ? Edit

Select Format

You get opportunity to take 30 day Challenge program.

Optional

Advanced

You get opportunity to take 30 day Challenge program.

Optional

Add tags

You get opportunity to take 30 day Challenge program.

Optional

PUBLISH IT

Don't sell
PUBLISH IT
Publish privately
SAVE AS DRAFT

Dont't publish now

Held

Tribunal has heard both the parties and perused the records, especially the impugned order and the case laws cited by both the parties. Tribunal find that Ld. CIT(A) has sustained the addition of Rs.
6,07,000 made by AO for the difference between the actual sale consideration and fair market value estimated by the departmental valuation officer . In the absence of any statutory provision, no hard and fast rule can be laid down in regard to the percentage of difference which can be ignored. The difference between the assessee and the valuer was less than 15 per cent. Not only this, the
construction of the house was spread over a period of 7 years. In the facts of the present case the difference between the plea of the assessee on the issue on investment on house property and valuer's
report was so meager that one could assume it to be bona fide difference fit to be ignored." Keeping in view of the facts and circumstances of the case and respectfully following the precedent, as aforesaid, Tribunal deletes the addition in dispute and allow the grounds raised by the assessee.

(Para 7)

The Assessee has filed the present appeal against the impugned
order dated 01/4/2016 passed by the Ld. Commissioner of Income Tax
(Appeals)-11, New Delhi pertaining to the assessment year 2012-13. 
2. The following grounds have been raised in the Assessee’s appeal. 
1. That the learned CIT (A) -11, New Delhi has erred
both in law and on facts. of the case in sustaining the
addition of Rs. 6,07,000 made by AO for the difference
between the actual sale consideration and fair market
value estimated by the departmental valuation officer
by complete disregard to material placed on record,
which deserves to be deleted.

2. That the difference of Rs. 6,07,000/- between the
sale consideration of Rs. 55,00,000/- and fair market
value of Rs. 61,07,000/- estimated by the
departmental valuation officer being 11.04%, which is
marginal and well within tolerance limit/ band of 15%
laid down by various Courts, the Ld. CIT(A)-11, New
Delhi should have deleted the resultant addition.

3. That the authoritative decisions relied upon by the
assessee which were squarely applicable over his case,
we arbitrarily brushed aside by the learned -CIT(A) -11,
New Delhi for no rational and just reason and by
complete disregard to the judgment of Hon'ble Apex
Court in the case of CIT Vs. Vegetable Products reported
in 88 ITR 192.

4. That the learned CIT (A) -11, New Delhi has in law and
on fact in sustaining the wrong charge under ss. 234A,
234B and 234C and initiation proceedings U/S 271(1)(c) (of Income Tax Act, 1961) erred both of interest of penalty 
5. That the appellate order arbitrary, capricious and
against deserves to be quashed/annulled. 
The appellant seeks permission to modify and/or prefer
any other ground of appeal as the circumstances of the case

3. The brief facts of the case are that the assessee had filed the return
of income on 31.03.20 13 showing a total income of Rs. 1,97,540/-. The
case of the assessee was reopened u/s. 147 (of Income Tax Act, 1961) by
issue of notice u/s 148 (of Income Tax Act, 1961) on 17.02.2015 and notice u/s 143 (of Income Tax Act, 1961)(2}
of the Act was issued on 10.09.2015. During the course of assessment
proceedings, the AO noted that the assessee has sold a property at
Anand Parbat, Near Rohtak Road vide sale deed dated 27.08.2011. As per
the sale deed, the sale consideration was Rs. 55 lakhs as against the
stamp duty valuation of Rs. 1.31 crores. The assessee raised objections to
the proposed addition of Rs. 86 lakhs u/s 50C (of Income Tax Act, 1961). As a result, the
AO referred the property for valuation to the DVO who vide his report
dated 10.12.2015 valued the property at Rs. 61,07,000/-. Accordingly,
the AO made the addition of Rs. 6,07,000/- on account of difference in
the valuation of property done by the DVO and the sale consideration by
invoking the provisions of section 50C (of Income Tax Act, 1961) vide his order dated
03.03.2016 passed u/s. 148 (of Income Tax Act, 1961)/143(3) of the Act. Aggrieved with the
assessment order, the assessee appealed before the Ld. CIT(A), who vide
his impugned order dated 04.12.2017 has dismissed the appeal of the
assessee. 
4. Against the impugned order dated 04.12.2017 of the Ld. CIT(A),
assessee is in appeal before the Tribunal. 
5. During the hearing, Ld. Counsel of the assessee has stated
Ld. CIT(A) has erred both in law and on facts of the case in sustaining the
addition of Rs. 6,07,000 made by AO for the difference between the
actual sale consideration and fair market value estimated by the
departmental valuation officer by complete disregard to material placed
on record, which deserves to be deleted. He further stated that the
difference of Rs. 6,07,000/- between the sale consideration of Rs.
55,00,000/- and fair market value of Rs. 61,07,000/- estimated by the
departmental valuation officer being 11.04%, which is marginal and well
within tolerance limit/ band of 15% laid down by various Courts, the Ld.
CIT(A), New Delhi should have deleted the resultant addition. In support
of his contention he relied upon the decision of the Hon’ble Patna High
Court in the case of Bimla Singh vs. CIT reported (2009) 308 ITR 71
(Patna) and stated that the issue involved in the present appeal is
squarely covered by this decision, hence, he requested that by following
the same ratio, the appeal of the assessee may be allowed. 
6. On the contrary, Ld. DR relied upon the orders of the authorities
below and relied upon the case laws as referred in the impugned order. 
7. I have heard both the parties and perused the records, especially
the impugned order and the case laws cited by both the parties. I find
that Ld. CIT(A) has sustained the addition of Rs. 6,07,000 made by AO for
the difference between the actual sale consideration and fair market value
estimated by the departmental valuation officer. I further note that the
difference of Rs. 6,07,000/- between the sale consideration of
Rs. 55,00,000/- and fair market value of Rs. 61,07,000/- estimated by
the departmental valuation officer being 11.04%, which is marginal and
well within tolerance limit/ band of 15% laid down in the decision of the
Hon’ble Patna High Court in the case of Bimla Singh vs. CIT reported
(2009) 308 ITR 71 (Patna) wherein it was held that “that in valuation of
the house property bonafide difference is bound to occur. In the absence
of any statutory provision, no hard and fast rule can be laid down in
regard to the percentage of difference which can be ignored. The
difference between the assessee and the valuer was less than 15 per
cent. Not only this, the construction of the house was spread over a
period of 7 years. In the facts of the present case the difference between
the plea of the assessee on the issue on investment on house property
and valuer’s report was so meager that one couold assume it to be bona
fide difference fit to be ignored.” Keeping in view of the facts and
circumstances of the case and respectfully following the precedent, as
aforesaid, I delete the addition in dispute and allow the grounds raised by
the assessee. 
8. In the result, the Appeal filed by the assessee stands allowed. 
Order pronounced on 14/05/2018. 
Sd/- 
[H.S. SIDHU] 
JUDICIAL MEMBER 
Date 14/05/2018

2. That the difference of Rs. 6,07,000/- between the
sale consideration of Rs. 55,00,000/- and fair market
value of Rs. 61,07,000/- estimated by the
departmental valuation officer being 11.04%, which is
marginal and well within tolerance limit/ band of 15%
laid down by various Courts, the Ld. CIT(A)-11, New
Delhi should have deleted the resultant addition.

3. That the authoritative decisions relied upon by the
assessee which were squarely applicable over his case,
we arbitrarily brushed aside by the learned -CIT(A) -11,
New Delhi for no rational and just reason and by
complete disregard to the judgment of Hon'ble Apex
Court in the case of CIT Vs. Vegetable Products reported
in 88 ITR 192.

Hi Thakurani,
I want to withdraw in my Thakurani wallet
Thanks,

Select the reason for validity check

I feel great..the news is still good.please give the reason too..thanks..

Why do you think the News as invalid?” Please mention the reason.

I appreciate your effort. May I request you to select one of the reasons from below.
I am marking this post and your reason to Thakurani Moderators. They will take appropriate action.
Thanks,

Write your reason

My Dear ,

Harassing

Spam

Ingenuine

Rotten

Alien

Plagiarism

Unformatted

If difference between investment on house property and valuer's report is so meager that one could assume it to be bona fide difference fit to be ignored, then addition on income of assessee would subject to be deleted.