Kalpana Sharma vs ITO, Ward 5(1)(4)

PER MAHAVIR SINGH, VP:

This appeal by the assessee is emanating from the order of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi dated 23.01.2026 pertaining to assessment year 2019-20 on the solitary issue of addition of Rs. 4,47,000/-

Heard both the sides and perused the records.

Brief facts of the case are that assessee, an individual deriving income from house property, interest and other sources, filed return of income on 29.9.2019 declaring total income at Rs. 9,72,100/- During the year, the assessee sold her 50% share in residential flat B-503, 5^th floor, Parsvnath Prestige Phase-I, Plot NO. 2, Sector-93A, Noidia (super area 144 sqm) for declared consideration of Rs. 40,00,000/- on 29.6.2018. Pursuant to ITAT remand order dated 26.12.2024 directing fresh adjudication, the AO referred the matter to DVO, Meerut under section 50C(2). The DVO, after inspection on 16.5.2025 and considering circle rate of 55,000 sqm. with adjustments for facilities (15%) and floor discount, valued the assessee’s share at Rs. 44,47,000/- vide report dated 3.6.2025. The AO adopted the same, resulting in addition of Rs. 4,47,000/-to short term capital gains. Aggrieved, the assessee preferred appeal before the Ld. CIT(A), who vide his impugned order dated 23.01.2026 sustained the addition by dismissing the appeal of the assessee. Against the order of the Ld. CIT(A), assessee is in appeal before us.

We have heard the rival contention and perused the records. Ld. AR submitted that Valuation Report submitted by the DVO is illegal as the same has been made adopting the circle rate mechanically without considering the valuation report by Tayal Associates dated 15.4.2018 submitted by the assessee at Rs. 79,26,000/-. He further submitted that the lower authorities did not consider the facts of the case in correct perspective and did not consider the fact that the difference in the circle rate and sale consideration was around 10% only and District Authority reduced the circle rate subsequently. It was further submitted that the valuation report is merely mechanical compliance in utter violence of statutory provisions and further the sale consideration almost comes within tolerance harbor limit of 10% (only exceeds Rs. 2300/-. It was further submitted that, within 13 days of sale of the share in property by the assessee on 29.6.2018, the Noida Authority on 11.7.2018 proposed that there shall be no increase in Base Valuation for Stamp Duty, by referring page no. 84 to 86 of the Paper Book for news article of moneycontrol.com informing about the proposals of the Noida Authority); the lifts and power back up were considered as essential services and therefore, the stamp duty on these two segments has been reduced to zero from 3 percent to Nil i.e. reduction of valuation by 6 percent. He further submitted that in addition to above, the Noida Authority proposed reducing for reducing the addition charge for the trhee additional common services that include clubs or community centers, swimming pools and gymnasiums from 3 percent to 2 percent, which resulting in further reduction of 3 percent. It was further submitted that the above proposals were given effect vide rate list issued on 1.8.2018 thereby providing relief of total 9 percent in Valuation for Stamp Duty by referring Page no. 80 to 83 of the Paper book for the relevant of the rate list online available at Noida Authority website at https://gbnagar.nic.in/document-cateogry/rate-list/page/2/. He further submitted that in the case of Maria Fernandes Cheryl vs. ITO (International Taxation), ITAT Mumbai, ITA No. 4850/Mum/2019, order dated 15.1.2021; [2-021] 123 taxmann.com 252/85 ITR (Trib.) 674 the Tribunal held that the 50C tolerance amendment is curative, intended to cover bona fide valuation differences, and therefore, the enhancement to 10% relates back to the date of section 50C itself. In that case, stamp value was Rs. 79,91,500/- against sale consideration of Rs. 75,00,000, difference about 6.55%, and section 50C addition was deleted. The tribunal reasoned that valuation is an estimate and small differences should not lead to adverse inference against the assessee. Ld. DR relied upon the orders of the authorities below.

In the background of the aforesaid discussions, we find considerable cogency in the contention of the Ld. AR that the sale consideration is almost comes within tolerance harbour limit of 10 percent, which exceeds only Rs. 2300/-. We further find that the Tribunal in the case Maria Fernandes Cheryl vs. ITO (supra) has observed that valuation is an estimate and small differences should not lead to adverse inference against the assessee. Thus, in the larger interest of justice, it would be appropriate to verify and examine the contention of the Ld. AR that whether within 13 days of sale of the share in property by the assessee on 29.6.2018, the Noida Authority on 11.7.2018 proposed that there shall be no increase in Base Valuation for Stamp Duty is applicable on the property sold by assessee and also verify the veracity of Page No. 80 to 86 of the Paper Book of rate list applicable as per Noida Authority and news article of moneycontrol.com informing about the proposals of the Noida Authority, as filed by the Assessee in the shape of paper book before us and if it is finding in order, then the addition in dispute may be deleted accordingly. We hold and direct accordingly.

In the result, the Assessee’s appeal is allowed for statistical purposes.