Case Law Details
Vijay Arvind Raykar Vs ITO (ITAT Pune)
The assessee is a builder. He is in the business of construction and sale of residential/ commercial properties. The AO observed that certain residential units have been sold by the assessee at a price less than the value adopted for Stamp Duty purpose by the State Government.
During the assessment proceedings, the assessee pleaded before the AO that due to market conditions and competition, the assessee had sold at a price less than the stamp duty valuation. The assessee also pleaded that the project is situated in Gram Panchayat Area. The AO rejected the claim of the assessee. The AO specifically pointed out that in the same project i.e. Shushrut Residency, Flat No.14 of J1 was sold on 11.06.2013 to Mr.Ghadge for a consideration of Rs.23,50,000/- and stamp duty valuation is Rs.22,50,240/-. Therefore, the AO concluded that the reasons given by assessee that the project is in Gram Panchayat Area and market conditions are baseless. The AO stated that the assessee has sold some other units at a price more than the stamp duty valuation. Therefore, after discussing, the AO made an addition of Rs.27,30,900/- under section 43CA of the Act.
Section 43CA read with section 50C(2) explains that whenever the assessee claims that value adopted for the purpose of Stamp Duty is in excess of Fair Market Value, the AO may refer it for valuation to DVO. Therefore, we agree with the view of the ld.CIT(A). Since there is a dispute regarding valuation of Residential Units, the ld.CIT(A) was right in directing the AO to refer the issue of valuation to DVO. Accordingly, the AO is directed to refer the issue of valuation of impugned Residential Units to DVO. After receiving the valuation report from the DVO, the AO shall pass the order giving effect after giving opportunity to the assessee.
FULL TEXT OF THE ORDER OF ITAT PUNE
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