ITAT Delhi deletes Section 50C addition after accepting registered valuer’s valuation

Preet Networks Private Limited Vs DCIT (ITAT Delhi)

AO Cannot Reject Registered Valuer’s Report in Silence: Accept It or Refer the Property to DVO u/s 50C(2)

The Delhi Bench of the ITAT has held that where an assessee disputes the stamp-duty value and supports the declared sale consideration with a report from a registered valuer, the AO cannot ignore the report and mechanically adopt the stamp-duty value u/s 50C. The AO must either point out defects in the assessee’s valuation or refer the property to the Departmental Valuation Officer u/s 50C(2). On the peculiar facts, the Tribunal adopted the registered valuer’s figure, applied the 10% safe-harbour tolerance and deleted the addition of ₹65,35,000.

The assessee, Preet Networks Pvt. Ltd., sold an industrial property bearing Plot No. J-25A, Sector 63, Noida, to M/s Savita Polymers. The total sale consideration recorded in the registered sale deed was ₹5 crore.

For stamp-duty purposes, the Sub-Registrar valued the property at ₹5,65,35,000. This valuation comprised ₹5,41,20,000 towards the land and ₹24,15,000 towards the construction standing thereon.

The assessee disputed the stamp-duty valuation and produced a report from an approved registered valuer. The valuer estimated the fair market value of the property at approximately ₹5,49,58,488. In the valuer’s computation, the land was valued at the same circle-rate figure of ₹5,41,20,000, but the old construction was valued at only ₹8,38,488.