Substitution of sale consideration or investment cost by FMV outside purview of sec. 50C and 56(l)(vi)/(vii) prohibited

ACIT Vs Satya Realtors Pvt Ltd (ITAT Delhi)

ITAT Delhi held that “full value of consideration” or “cost of investment” cannot be substituted by the fair market value (FMV), except in the case falling within the purview of 50C and Sec. 56(l)(vi)/(vii) of the Income Tax Act.

Facts- Present appeal is preferred by revenue mainly contesting for addition of investment in Purchase/sale of immovable property on the ground that the purchase or sale consideration recorded in the registered conveyance deed and in books or accounts are not reflecting the fair market value thereof.

Notably, AO added the difference between the fair market value (FMV) calculated by him on the basis of some assumptions and the recorded purchase or sale consideration to the total income of the assessee. CIT(A), vide the impugned order, deleted the said additions.

Conclusion- Held that “full value of consideration” or “cost of investment” cannot be substituted by the fair market value, except in the case falling within the purview of 50C and Sec. 56(l)(vi)/(vii).

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