Kiran Agarwal Vs ITO (ITAT Jodhpur)
Small Valuation Difference Within Tolerance Band: Addition Under Section 69B Deleted
The Jodhpur Bench of the Income Tax Appellate Tribunal (ITAT) deleted the addition of ₹71,193 made under section 69B for AY 2017-18, holding that a minor difference in valuation of a residential house property was fully covered by the statutory tolerance band of 10% under section 50C.
The Tribunal noted that the CIT(A) had upheld the addition in a summary manner, without properly appreciating the legal position or the factual material already on record. On merits, the ITAT observed that the difference between the value of the property declared by the assessee and the value determined by the DVO was only about 1.57%, which is well within the permissible 10% variation allowed under the third proviso to section 50C(1).
The Bench further found fault with the DVO’s approach of deducting only 7.5% towards supervision charges, whereas even a 10% deduction (or the generally applied higher rate) would have resulted in a valuation lower than the value disclosed by the assessee in her balance sheet. This rendered the addition factually unsustainable and legally perverse.
In view of the clear statutory tolerance and the negligible variation, the ITAT held that no addition could be made for such marginal differences. Accordingly, the impugned order was set aside and the addition of ₹71,193 was deleted in full, and the appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT JODHPUR
