Preet Networks Private Limited vs DCIT, Central Circle-19

PER MAHAVIR SINGH, VICE PRESIDENT :

This appeal by the assessee is directed against the order dated 26.12.2025 of the Ld. Commissioner of Income Tax (Appeals-27), New Delhi [hereinafter referred to as “CIT(E)”] in Appeal No. CIT(A), Delhi-27/10044/2021-22 relevant to assessment year 2022-23. Assessment was framed by the DCIT/ACIT, Central Circle-19, New Delhi vide order dated 4.3.2024 u/s 143(3) of the Act.

At the threshold, it is noted that there is delay of 16 days in filing the appeal before the Tribunal. After hearing both the sides, we find sufficient cause has been attributed to the assessee for filing the belated appeal, thus, the delay of 16 days is condoned and appeal is admitted for adjudication.

The only issue in this appeal of the assessee is against the order of the Ld.CIT(A) confirming the action of the AO in not allowing 10% Safe Harbor Limit.

The brief facts are that during the year under consideration, the assessee sold a property, being industrial plot bearing no. J-25A, Sector 63, Noida to M/s Savita Polymers for a total sale consideration recorded in the sale deed at Rs. 5 crore. As per circle rate the Sub-Registrar registered the sale deed by valuing the property for the purpose of computing stamp duty of Rs. 5,65,35,000/-. The assessee before the AO submitted a Valuation Report valuing the property at Rs. 5,49,58,488/-. The assessee before the AO claimed in view of 3^rd proviso to section 50(1) by Safe Harbor Rule of 10% that there is no addition can be made by invoking the provision of section 50C of the Act. The approved valuer of the assessee valued the property i.e. at Rs. 5,49,58,488/- comprising land value at circle rate of Rs. 5,41,20,000/- and value of old construction of Rs. 8,38,488/-. Whereas stamp duty valuation of Rs. 5,65,35,000/- comprising of land value at circle rate of Rs. 5,41,20,000/- and value of construction at Rs. 24,15,000/-. The AO was of the view that stamp duty valuation in terms of section 50C will prevail and he accordingly treated the differential amount of Rs. 65,35,000/- as income of the assessee and added to the returned income of the assessee by invoking the provisions of section 50C of the Act. Aggrieved, assessee preferred appeal before the CIT(A) who CIT(A) also confirmed the action of the AO. Aggrieved, asseesee is in appeal before us.

We have heard the rival contentions and gone through the facts and circumstances of the case. We noted that the assessee has submitted valuation report prepared by the Registered Valuer valuing the property at Rs. 5,49,58,488/- comprising of land value at circle rate of Rs. 5,41,20,000/- and value of old construction of Rs. 8,38,488/- whereas the stamp duty value is Rs. 5,65,35,000/- comprising the land value of Rs. 5,41,20,000/- and value of construction of Rs. 24,15,000/-. The admitted facts are that the AO has never referred the matter to the DVO despite the objections of the assssee as against the value determined by the Stamp Duty Valuation Authority. AO did not rely on valuation report submitted by the assessee to support the amount of sale consideration without pointing any defect in the stamp duty without pointing any defect in the same or without rejecting the same. Once this is the case, the AO has to accept the valuation report submitted by the assessee i.e. registered valuer or he should refer the matter to the DVO for valuing the Fair Market Price in terms of section 50C(2) of the Act. Because the assessee has claimed that the value adopted by the Stamp Valuation Authority under sub-section (1) of section 50C exceeds the Fair Market Value of the property as on the date of transfer by filing the fair market value estimated by the registered valuer. Due to smallness of amount, we are not remitting back the matter to the AO for adjudication because the registered valuer valuation is available with us by taking the value at Rs. 5,49,54,488/- the Safe Habour Rule of 10% in terms of 3^rd proviso to Section 50C the difference is less than 10%. Hence, we delete the addition and allow the appeal of the assessee.