ITAT DELHI

GEETIKA SACHDEV VERSUS ITO, WARD-3 (2) , SAHARANPUR

Addition made u/s. 56(2)(vii)(b)(ii) – Purchase of flat below Fair Market value – adequate consideration – the difference between sale consideration shown by the assessee at ₹ 90 lacs and fair market value estimated by the DVO at ₹ 98,40,000/- which was less than 10% and hence, the same is liable to be ignored.

Addition made u/s. 56(2)(vii)(b)(ii) – Purchase of flat below Fair Market value – adequate consideration – Addition on account of difference of margin between the value as given by the assessee and the Departmental Valuer – HELD THAT:- From the facts, it is apparent that the assessee has disputed the addition to be made as mentioned in the show cause notice issued by the AO u/s. 56(2)(vii)(b) of the Act by stating that the purchase consideration paid by her was as per prevailing market rate at that time. However, the AO has not referred the matter to the DVO for the determination of the fair market value of the flat purchased as required under the relevant provisions of the Act. Accordingly the AO has been directed during the appellate proceedings to make such reference to the DVO to meet the principle of natural justice. The DVO, after considering the objections of the assessee and other evidences produced before him by the assessee, has determined the fair market value of the said flat at ₹ 98,40,000/-.

Ld. CIT(A) has observed that there was no justification for further altering the FMV determined by the DVO and further objections raised by the assessee were rejected. Accordingly under the facts of the case the addition made by the AO was confirmed to the extent of ₹ 8,40,000/- and the balance addition was deleted by the Ld. CIT(A) against which the assessee is in appeal before the Tribunal.

In the case of Rahul Constructions vs. DCIT [2012 (1) TMI 229 – ITAT PUNE] passed in ITA No. 1543/Pn/2007 (AY 2004-05) wherein the Tribunal has adjudicated and decided the similar issue in favour of the assessee, where it was held that the margin between the value as given by the assessee and the Departmental Valuer was less than 10 percent and the difference is liable to be ignored and the addition made by the lower authorities on this count cannot be sustained and accordingly, the same was deleted.

In the case in hand, the difference between sale consideration shown by the assessee at ₹ 90 lacs and fair market value estimated by the DVO at ₹ 98,40,000/- which was less than 10% and hence, the same is liable to be ignored and, therefore, the addition confirmed by the Ld. CIT(A) is not tenable and needs to be deleted – the addition in dispute is hereby deleted.

Appeal of the assessee allowed in part.

No.- ITA No. 6638/Del/2018

2019 (12) TMI 451 – ITAT DELHI

Dated.- December 2, 2019