Dilip Manibhai Prajapati Vs ITO (ITAT Ahmedabad)
Ahmedabad ITAT: When Stamp Duty Value is Disputed, AO Must Refer Property Valuation to DVO under Section 56(2)(x)
The Ahmedabad ITAT deleted the addition made under section 56(2)(x) on account of the difference between the stamp duty value and the purchase consideration of land. The Tribunal held that where the assessee disputes the stamp duty valuation on the grounds contemplated under section 50C(2), the Assessing Officer ought to refer the matter to the Departmental Valuation Officer (DVO) before making any addition.
In the present case, the assessee had consistently contended that although stamp duty was levied treating the land as non-agricultural, what was actually purchased was agricultural land. More importantly, in the case of a co-purchaser of the same property, the AO had referred the valuation to the DVO, who determined the fair market value at ₹2.25 crore, as against the purchase consideration of ₹2.01 crore, a variation of only about 10%, which did not warrant any addition under section 56(2)(x).
The Tribunal held that once the DVO’s valuation established that the fair market value was substantially lower than the stamp duty value and the difference from the purchase consideration fell within the permissible tolerance limit, the addition could not survive. Accordingly, it directed deletion of the addition of ₹62.53 lakh. Having allowed the appeal on this ground, the Tribunal did not adjudicate the alternate contention regarding the character of the land as agricultural or non-agricultural.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (in short referred to as “ld.CIT(A)”) dated 15.03.2022 passed under section 250 of the Income Tax Act, 1961 (“the Act” for short) pertaining to Assessment Year 2018-19.
