Selling flats at amount lesser than stamp duty justified as flats had no parking space & electricity connection: ITAT

Case Details: Peerless General Finance & Investment Company Ltd. v. DCIT - [2021] 132 taxmann.com 80 (Kolkata - Trib.)

Judiciary and Counsel Details

• • P.M. Jagtap Vice-President and A.T. Varkey, Judicial Member
  • S.K. Tulsian, Adv., Ms. Riya Somani, C.A. and Ms. Lata Goyal, C.A. for the Appellant. 
  • Sanjay Rai, CIT for the Respondent.

Facts of the Case

Assessee-company sold four flats and offered capital gains of certain amount on same. Assessee computed capital gain lower than stamp duty valuation (SDV) of said flats for reason that said flats did not have a car parking space, and there was also no scope of getting a high voltage electric connection.

Assessing Officer (AO) accepted the same and passed an assessment order. The Pr. Commissioner invoked revision jurisdiction on the ground that impugned order of AO accepting capital gain offered by assessee at lesser amount than SDV of flats was erroneous and prejudicial to revenue. Assessee filed appeal against revisional order before the Kolkata Tribunal.

ITAT Held

The Tribunal has held that as evident from the submission made by the assessee before the AO, the actual sale consideration adopted, which was lower than the stamp duty valuation, was duly explained by the assessee, and the same was also supported by a valuation report of the registered valuer.

It was also relevant to note here that the assessee also made a specific request to the AO to refer the matter relating to the valuation of the property to DVO in terms of section 50C(2) if the lower sale consideration actually received by the assessee than the stamp duty value as justified by it was not acceptable. No such reference, however, was made by the AO.

Thus, it could be held that the explanation offered by the assessee in the matter was found acceptable by the AO, and on appreciation thereof, a well-considered view was taken by the AO. Accordingly, the impugned order passed by the ld. Pr. CIT revising the order of the AO on this issue was not sustainable.

List of Cases Referred to

• • CIT v. R.K. Construction Co. [2008] 175 Texman 165/[2009] 313 ITR 65 (Guj.) (para.13)
  • Dy. CIT v. Peerless General Finance & Investment Co. Ltd. [IT Appeal No. 1470 (Kol.) of 2019, dated 5-12-2019] (para 18).