DCIT Vs Gaurav Investments (ITAT Mumbai)
Tolerance band of 10% under Section 43CA held retrospective – Beneficial amendment applies to all years – Tribunal upholds CIT(A) deletion of ₹2.22 Cr addition- No addition if DVO value within 10% – ITAT Mumbai confirms retrospective safe-harbour relief
Revenue filed appeal against the order of CIT(A) deleting addition made u/s 43CA on account of difference between sale consideration & stamp duty value of immovable properties. The only issue before Tribunal was whether the amended tolerance limit of 10% introduced by Finance Act, 2020 could be applied retrospectively to A.Y. 2018-19.
Assessee, engaged in real estate development, had sold three commercial units at Trade Link Building, Kamala Mills, Lower Parel, Mumbai. AO noted that the sale consideration was lower than the value adopted by the stamp authority & made addition of ₹14.95 Cr u/s 43CA(1). Later, on receipt of DVO’s valuation, the difference was recomputed at ₹2.22 Cr & rectified u/s 154.
Before CIT(A), Assessee argued that as per DVO report, the difference between actual sale consideration & fair market value did not exceed 10%, hence as per the first proviso to s.43CA, the declared consideration must be accepted. CIT(A) accepted the plea relying on ITAT’s own decision in Assessee’s case for A.Y. 2017-18 (ITA No. 5184/Mum/2024 dated 29.04.2025) holding that the 10% safe-harbour is a beneficial provision having retrospective application. Accordingly, the entire addition u/s 43CA was deleted.
