Chittu Bhawanji Narsey Vs ITO (ITAT Mumbai)
ITAT Mumbai applies Section 50C(3): Stamp Duty Value to Prevail over Higher DVO Valuation
Mumbai ITAT has granted relief to Assessee by deleting the addition made u/s 50C on account of adoption of higher DVO valuation. Assessee, along with co-owners, had sold a residential flat through an agreement executed in December 2010 & registered on 07.01.2011 for Rs 3.50 crore. While the stamp valuation authority valued the property at Rs 4.17 crore on the date of registration, Assessee argued that the agreement to sell had been finalised earlier, when the ready reckoner value was only Rs 3.21 crore. The Assessing Officer, after reference to the DVO as directed by the Tribunal in an earlier round, adopted the DVO’s valuation of Rs 4.13 crore as on 27.11.2010, & accordingly recomputed Assessee’s long-term capital gains. CIT(A) upheld this action.
Before the Tribunal, Assessee contended that u/s 50C(3), where the DVO’s valuation exceeds that of the stamp valuation authority, the lower stamp duty valuation must be taken as the deemed consideration. It was further pointed out that the Stamp Valuation Authority itself had determined the ready reckoner value of the property at Rs 3.21 crore when the documents were presented in November 2010, prior to the revision of reckoner rates effective 01.01.2011 which had inflated the valuation to Rs 4.17 crore. Assessee supported his stand with documentary evidence including registered agreements, ready reckoner extracts & judicial precedents.
