YASHODA BUILDER AND DEVELOPERS,NAGPUR V. ACIT CIRCLE - 1, NAGPUR

ITA 302/NAG/2024

AI Insights

The case involves Yashoda Builders and Developers appealing against the order of the Assistant Commissioner of Income Tax, which was upheld by the Commissioner of Income Tax (Appeals). The dispute centered on the addition of Rs. 45,08,931 to the assessee's income under section 43CA of the Income Tax Act, 1961, due to the difference between the sale consideration received and the stamp duty valuation of properties sold. The Tribunal examined whether the addition was justified, considering the tolerance band for variations in property valuations. The Tribunal concluded that the addition was not justified as the difference was within the tolerance band of 10%, and thus, the addition was deleted.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474347 (ITAT-NAGPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Other Referred Cases: Suresh C. Mehta vs. ITO, Bimla Singh vs. CIT, Shree Maya Real Estate Pvt. Ltd. vs. ITO, Rahul Constructions vs. DCIT, Maria Fernandes Cheryl vs. ITO, K.P. Varghese vs. ITO, Dattatraya Kerba Lonkar vs. DCIT, Harpreet Hotels (P) Ltd. vs. ITO, Kaaddu Jayghosh Appasaheb vs. ITO
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ABHAY Y. MARATHE
• Assessee Lawyers: KISHORE P. DEWANI
• Keywords: Condonation of delay; Set aside; Business income; Capital asset; Unexplained investment; Sale consideration of property below Jantri Value; Fair market value; Capital Gains; Principle of natural justice; Valuation report; Value adopted by valuation officer
• Section: 147; 148; 143(3); 142(1); 250; 56; 43CA; 139(1); 234B; 50C; 133A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI K.M. ROY, ACCOUNTANT, MEMBER ITA no.302/Nag./2024 (Assessment Year : 2017–18) Yashoda Builders And Developers 122, Samwari Bazar Road Sitabuldi, Nagpur 440 014 PAN – AABFY3873E ……………. Appellant v/s Asstt. Commissioner of Income Tax Circle–1, Nagpur ……………. Respondent Assessee by : Shri Kishore P. Dewani Revenue by : Shri Abhay Y. Marathe Date of Hearing – 22/01/2025 Date of Order – 04/02/2025 O R D E R PER K.M. ROY, A.M. The captioned appeal filed by the assessee is emanating from the impugned order dated 15/09/2023, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2017–18. 2. Following grounds have been raised by the assessee:– “1. The order passed by Commissioner of Income Tax (Appeals), National Faceless Appeal Centre dated 15/09/2023 u/s 250 of I.T. Act 1961 is illegal, invalid and bad in law. 2. The learned CIT(A) has dismissed the appeal summarily without considering the merits of grounds on the basis of evidence on record. The order passed by CIT(A) is in violation of principles of natural justice. 2 Yashoda Builders And Developers ITA no.302/Nag./2024 3. The order passed u/s 143(3) of I.T. Act 1961 is illegal, invalid and bad in law. 4. The addition made by A.O. and upheld by CIT(A) at Rs.43,68,851/- u/s 43CA of I.T. Act 1961 in respect to Wanadongri Project is unjustified, unwarranted and bad in law. 5. The learned A.O. erred in making addition and upheld by CIT(A) at Rs.43,68,851/- on account of difference in sale consideration received and stamp duty valuation as business income u/s 43CA of I.T. Act 1961. 6. The addition made by A.O. and upheld by CIT(A) at Rs.1,40,080/- u/s 43CA of I.T. Act 1961 in respect to Plot No.270 is unjustified, unwarranted and bad in law. 7. The learned A.O. erred in making addition and upheld by CIT(A) at Rs.1,40,080/- u/s 43CA of I.T. Act 1961 on account of difference in sale consideration received and stamp duty valuation as business income u/s 43CA of I.T. Act 1961. 8. The assessee denies liability to pay interest under section 234A, 234B and 234C of I.T. Act 1961. Without prejudice, levy of interest under section 234A, 234B and 234C of I.T. Act 1961 is unjustified, unwarranted and excessive. 9. Any other ground that shall be prayed at the time of hearing.” 3. During the course of hearing, the Registry has pointed out that there is a delay of 183 days in filing the present appeal by the assessee before the Tribunal. While going through the record, we find that the assessee has furnished an application for condonation of delay and affidavit in support of the application and requested to condone the delay. Considering the facts in the application for condonation of delay along with the averments made in the affidavit, we are of the opinion that the assessee is prevented in filing the appeal belatedly and we are satisfied that the delay in filing the appeal is due to reasonable cause. Consequently, we condone the delay of 183 days in filing the present appeal and admit the same for adjudication on merit. 3 Yashoda Builders And Developers ITA no.302/Nag./2024 4. Grounds No.1 to 7, raised by the assessee relates to the addition of ` 45,08,931, under section 43CA of the Income Tax Act, 1961 (\"the Act\") made by the Assessing Officer. 5. Facts in Brief:- The Assessing Officer made addition of ` 45,08,931 under section 43CA on the basis of report of Valuation Officer and ready recknor value of plot sold. 6. On appeal, the learned CIT(A) confirmed the order of the Assessing Officer. 7. Before us, the learned Counsel for the assessee furnished a gist of submissions in respect of grounds no.1 to 7, is reproduced hereunder for ready reference:– “A.O. Page 2 CIT(A) Page 3 - 5 1. Delay in filing of appeal is of 183 days. It was mistake in the office of counsel of assessee. Affidavit of employee of counsel is submitted along with application for condonation of delay. Reliance on: i) ITAT Order in ITA Nos.253 & 254/Nag/2018 in the case of M/s Western Coalfields Ltd. vide order dated 21/01/2020. 2. The addition of Rs.43,68,851/- u/s 43CA A) Sale proceeds of plots sold is at Rs.2,99,28,549/- and value determined by D.V.O. is at Rs. 3,42,97,400/-. The difference at Rs.43,68,851/- is on account of estimation and is 12.74%. B) Report of Valuation Officer is not based on any comparable sale instance (P- 10). In fact no basis is given for estimated valuation. C) Valuer in valuation report of same layout has valued the plots at three different rates having variation of more than 15% (P- 10). 4 Yashoda Builders And Developers ITA no.302/Nag./2024 D) Difference at less than 15% can be reasonably considered on account of estimation and needs to be ignored for section 50C, 43CA and 56 is consistent judicial view on the subject. Reliance on: i) 96 DTR 0308 (Mum.) Suresh C. Mehta vs. ITO (P- 16 - 20) (20) ii) (2009) 308 ITR 0071 (HC) Bimla Singh vs. CIT (P- 11 - 15) (14, 15) 7. Insofar as the addition at ` 1,40,080, under section 43CA of the Act is concerned, the learned Counsel for the assessee submitted the sale proceeds of Plot No.270 is at ` 8,65,920, and value for the purposes of levy of stamp duty is ` 10,06,000. The difference in value at ` 1,40,080, is 13.92%. Stamp duty value is not fair market value. He further submitted that assessee having claimed that assessee has sold plot at fair market value addition made without making reference to Valuation Officer is bad in law and unsustainable. 8. The learned Counsel for the assessee further submitted that the objections were filed before Valuation Officer. Various objections have not been dealt with in the valuation report of DVO. Difference at 12.74% is within tolerance band of less than 15% as per judicial precedents. Difference is on account of estimation of fair market value. 9. The learned Counsel for the assessee further submitted that Valuation Report has not been issued on the basis of each plot for the purpose of section 43CA of Act. It is not credible evidence to make addition at the hands of assessee in terms of provisions of section 43CA of 5 Yashoda Builders And Developers ITA no.302/Nag./2024 the Act. In support of his arguments, the learned Counsel for the assessee relied upon the following case laws:– i) Shree Maya Real Estate Pvt. Ltd. ITA No.227/Nag/2022 order dated 02/09/2024. ii) Rahul Constructions vs. DCIT, (2010) 29 CCH 0027 (Pune)(Trib.) iii) Maria Fernandes Cheryl vs. ITO, (2021) 85 ITR 0674 (Mum.) (Trib.) 10. The learned Counsel for the assessee further submitted that in assessee’s case the learned CIT(A) for the assessment year 2015-16 has accepted the tolerance band after following the Co–ordinate Bench decision of the Tribunal, Mumbai Bench, in Suresh C. Mehta, 96 DTR 308 (Mum). 11. The learned Counsel for the assessee submitted that the Hon’ble Apex Court in K.P. Varghese v/s ITO, 131 ITR 597 (SC) has noted that difference of 15% or more of the consideration declared is to avoid hardship in marginal case due to subjective assessment of fair market value. 12. The learned Departmental Representative (“the learned D.R.”) relied upon order of the Assessing Officer and learned CIT(A). He submitted that detailed reasons indicated in the assessment order and in order of the learned CIT(A) clearly explain that there is no merit in the submission of assessee. The addition made by the Assessing Officer and upheld by the learned CIT(A) is correct and proper and thus learned D.R. submitted that no interference is 6 Yashoda Builders And Developers ITA no.302/Nag./2024 called for in the order of learned CIT(A) and appeal of assessee needs to be dismissed. 13. We have heard the arguments of rival parties, perused the material available on record and gone through the orders of the authorities below. In assessee’s case, the addition has been made by the Assessing Officer at ` 45,08,931, under the provisions of section 43CA of th Act. The Assessing Officer computed the addition on the basis of report of Valuation Officer wherein fair market value of plots sold has been determined at ` 3,42,97,400. The Assessing Officer has made the addition at ` 43,68,851, under section 43CA of the Act. The aforesaid amount computes at 12.73% of the fair market value as per Valuation Officer. The Assessing Officer has also made addition in respect to Plot No.270 at ` 1,40,080, under section 43CA of the Act, which computes at 13.92% of ready recknor value at ` 10,06,000. In respect to this no reference is made to Valuation Officer. The Assessing Officer has thus made aggregate addition of above two sums at ` 45,08,931, in the assessment framed. 14. The Valuation Report of the Valuation officer has been placed in the Paper Book at Page–9 & 10. It is evident from report that the Valuation Officer has valued the fair market value of plots sold by segregating total land area in three parts and applying independent rates in the vicinity of ` 5,000 to ` 6,100 per square meter. The Valuation Officer has not based the estimated value on any comparable sale instances and it is pure estimated value. It is noted that in the same layout variation value of plot interse in the report of 7 Yashoda Builders And Developers ITA no.302/Nag./2024 Valuation Officer is 18.03%. The assessee has submitted objections on estimated valuation before Valuation Officer and same are placed at Page–51 & 52 of the Paper Book. The Valuation Officer has not dealt with the objection of the assessee submitted before the Valuation Officer in his report of valuation. The fair market value estimated by the Valuation Officer considering the defects mentioned does not appear to be sacrosanct. 15. The provisions of section 43CA/50C of the Act itself provides for tolerance band between value as per Ready Recknor Value and sale consideration received. The aforesaid provisions have been considered in judicial precedents and tolerance band for difference between estimated fair market value as per valuation report and sale consideration received have been applied. Considering tolerance band, it is concluded that no addition could be made under the provisions of section 43CA/50C(2) and section 56 of Act. The tolerance band considered is up to 15%. The aforesaid tolerance band is in terms of decision of Hon’ble Supreme Court in K. P. Varghese (supra) and in C. B. Gautam reported at 199 ITR 530 (SC). The Co–ordinate Bench of the Tribunal in Shree Maya Real Estate Pvt. Ltd. (supra) had considered the difference in value between fair market value determined by the DVO and the sale consideration received as per Sale Deed. The variation at 14.14% in the aforesaid case was held to be within the tolerance band and after following the judicial precedents on the subject has deleted the addition made under section 43CA of Act. Relevant extract from the decision of the Co–ordinate Bench in Shree Maya Real Estate Pvt. Ltd. (supra) is reproduced as under:– 8 Yashoda Builders And Developers ITA no.302/Nag./2024 “4. Ground no.2, relates to addition of 57,68,020, on account of income under section 43CA of the Act. 5. Facts in brief: The assessee filed its return of income for the year under consideration on 30/10/2017, declaring a total loss of (-) 1,06,13,791. A survey under section 133A of the Income Tax Act, 1961 (\"the Act\") was conducted at the premises of M/s. Tirupati Developers. Based on certain incriminating documents found and impounded during the survey operation, the case of the assessee was re opened under section 147 of the Act after recording the reasons as required by section 148(2) of the Act and obtaining necessary sanction under section 151 of the Act. Accordingly, a notice under section 148 dated 12/02/2021, was issued and duly served upon the assessee through e-mail requiring it to furnish the return of income. In response to notice under section 148 of the Act, the assessee, vide its reply dated 12/03/2021, stated that to treat his return of income filed under section 139(1) on 05/10/2017, as return filed in compliance of the notice under section 148 of the Act. Accordingly, notice under section 143(2) was issued on 16/12/2021, and notices under section 142(1) of the Act were issued, calling for information to the assessee from time to time and served upon assessee. The Assessing Officer examined the impounded documents and found that page no.6 to 24 of Annexure A 2/35 is copy of sale deed dated 31/05/2016 of land at Khasra no.83, Mouza Dongargaon, P.S.K. 73, having area of 2.63 hectares, Nagpur between the assessee and M/s. Tirupati Developers. As per the sale deed, value of the immovable property adopted by the stamp duty authority is 7.20 crore whereas the sale consideration paid by the assessee is only 3.50 crore, and thus there was a difference of 3.70 crore between the market value of the property adopted by Stamp Duty Authority and the actual sale consideration attracted the provision of section 43CA of the Act. Thus, the Assessing Officer completed the assessment vide order dated 24/03/2022, and has made the addition of 57,68,020, under section 43CA of the Act. The Assessing Officer has thus determined the total loss as ( ) 48,45,771. Aggrieved by the assessment order, the assessee filed appeal before the first appellate authority. Aggrieved, the assessee carried the matter in appeal before the first appellate authority. 6. The learned CIT(A) confirmed the order passed by the Assessing Officer by observing as follows: “During the appellate proceedings, the appellant‟s AR has filed a detailed written submission. I have carefully gone through the submission filed by the AR, the assessment order and material available on record. It is noted that the appellant's AR has filed the same submission before the AO. It is seen that the appellant's case clearly comes under the purview of section 43CA of the Act. The market value of the immovable property as per the DVO's report is Rs. 4,07,68,020 whereas the value as per the actual sale consideration mentioned in the Sale Deed is Rs.3,50,00,000. The difference between the two, i.e., Rs.57,68,020/ is more than 10% of the actual sale consideration and therefore the appellant's case clearly falls under the purview of section 43CA of the Act. In the written submission filed by the appellant's AR, it has been argued that section43CA cannot be applied in the appellant's case since the 9 Yashoda Builders And Developers ITA no.302/Nag./2024 property has certain disadvantages. All these facts have been carefully considered by the DVO while determining the market value and therefore, no further relief can be given on this account. The appellant's AR has also referred to certain judicial decisions in support of the arguments. It is seen that the facts and circumstances involved in the cited cases are totally different from the facts in volved in the appellant's case. Therefore, the appellant cannot get relief. Hence, having considered the facts and circumstances of the case, I am of the firm belief that the AO was correct in making the addition of Rs. 67,68,020/-u/s. 43CA of the Act. Therefore, the addition made by the AO is upheld. Hence this ground of appeal raised by the appellant is hereby \"dismissed\". The assessee being once gain aggrieved, is in appeal before the Tribunal. 7. Before us, the learned A.R. furnished his brief synopsis, which read as under: 1. Assessee has sold an immoveable property for Rs.825,00,000/- against its stamp duty valuation of Rs.13,49,20,000/-. The fair market value of the property was assessed at Rs. 8,82,68,020/-by the Departmental Valuation Officer (DVO) on a reference made by Assessing Officer. The detail of the transaction is summarized as under: Sr. no. Particulars Rupees 1. Actual Sale Price 825,00,000 2. Stamp Duty Valuation 3. Valuation as per DVO 2. The immoveable property sold was an agricultural land with following Khasara Number: a) KH.No.85/1&85/2 b) KH.No.72 c) KH.No. 83 3. MOU for the sale of the property between the Assessee and the buyer (M/s. Tirupati Developers) was done by single agreement on 20/07/2015. The copy of the same was submitted during assessment proceeding as well as during appellate proceeding before CIT(A). The MOU between the Assessee and buyer is not in dispute. 4. The property with above Khasara Numbers was purchased by the Assessee from M/s. Grace Realities (India) Pvt Ltd by single sale deed only on 14/08/2013. The copy of the purchase deed was submitted during assessment proceeding as well as during appellate proceeding 10 Yashoda Builders And Developers ITA no.302/Nag./2024 before CIT(A). 5. The property purchased by the Assessee was litigation and disputes and as a result, Assessee was not able to find the buyer for the property until 2016. The sale by the Assessee was a distress sale as such and the transaction was fully buyer dominated transaction. 6. At the instance of the buyer, the sale deed of above property was executed in 3 parts as under: a) KH.No.85/1&85/2-Saledeeddoneon29.03.2016. b) KH.No.72-Saledeeddoneon29.03.2016. c) KH.No.83-Saledeeddoneon31.05.2016. 7. The DVO has given the valuation reports in 3 parts as the sale deed was done in 3 parts. 8. The details of the valuation given by the DVO vis a vis actual sale price and stamp duty valuation is summarized as under: Sr. no. Sale Deed Date Kh. No. Area Hec. Stamp Duty Value Actual Sale Amount DVO Report Difference 1. 29/03/2016 85/1 & 85/2 0.81 & 0.81 40600000 32400000 32400000 0.00 2. 29/03/2016 72 0.73 22320000 15100000 15100000 0.00 3. 31/05/2016 83 2.63 72000000 35000000 40768020 0.00 Total 3.36 134920000 82500000 88268020 5768020 9. Learned AO has taken each sale deeds in isolation and not as part of one complete deal as per MOU executed on 20.07.2015. The sale deed executed on 31/05/2016 was having the FMV of Rs.407,68,020/- as against actual sale value of Rs.350,00,000/-. The difference of Rs.57,68,020/- was taxed U/s 43CA. 10. While passing the Assessment order, the Learned AO & respected CIT(A) has failed to appreciate the following facts: a) The sale deed executed was the part of one single sale transactions of MOU on 20.07.2015. b) The transaction was buyers dominated transactions and the sale deed was required to be done as per the convenience and comfort of the buyer. c) The property was having lot of litigation and disputes and any denial or rejection could have been fatal to the interest of the Assessee. 3. We have given a thoughtful consideration to the arguments made by the rival parties and perused the material available on record. The sale of three plots must be considered on an aggregate basis as these are contiguous portion of the same piece of land which has been purchased by a common deed. Only at the time of sale, three deeds were executed covering two financial years as per prudent commercial consideration and have also been 11 Yashoda Builders And Developers ITA no.302/Nag./2024 sold a single purchaser. The transactions are not independent and should be viewed as a whole on an aggregate basis to have a holistic view. The details of transactions of an aggregate basis are summarised as under: S.no. Particulars Amount() 1. Actual Sale Price 8,25,00,000 2. Stamp Duty Valuation 3. Valuation as per DVO 4. In view of the valuation as per DVO being lower than the stamp duty valuation, the comparison has to be made between actual sale price and the valuation as per DVO. The difference is 57,68,020. Such difference is 6.99% of the actual sale price. The difference within tolerance band of 10% and the application of such band will relate from 01/04/2014. The case of the assessee is covered by the order dated 02/07/2021, passed by the Coordinate Bench rendered in Stalwart Impex Pvt. Ltd. v/s ITO, ITA no.5752/Mum./2019, for the assessment year 201617. There relevant part of the order is reproduced below:- Both sides heard, orders of authorities below examined. The solitary issue as sailed by the assessee is addition made u/s 43CA of the Act in respect of difference between agreement value of the flats and market value determined by the DVO. The value of flats as per assessee, Stamp Duty Value and value as determined by the DVO are tabulated herein under: Sr. no. Flat no. Agreement value(in) Stamp Duty Value (in ` ) Fair Market Value as determined by DVO (in) Differenc e (in) 1. E1/404 30,92,250 34,04,000 32,27,000 1,34,750 2. D2/702 32,24,750 40,40,000 37,36,000 5,11,250 3. F1/502 33,94,500 35,39,000 34,30,000 35,500 Total 97,11,500 1,09,83,000 1,03,93,000 6,81,500 The difference between agreement value and value determined by DVO is Rs.6,81,500/-. In terms of percentage the difference is 7% approximately. The short contention of the assessee is that where the difference between the agreement value and the market value is less than 10% no addition should be made. 5. Similar issue had come up before the Tribunal in the case of Radhika Sales Corporation (supra). The Tribunal deleted the addition by observing as under: “5. We have heard the submissions made by representatives of rival sides and have perused the orders of authorities below. The solitary issue raised in the appeal by the assessee is 12 Yashoda Builders And Developers ITA no.302/Nag./2024 against the addition of Rs.10,38,000/- on account of difference in Long Term Capital Gain declared by the assessee and computed by the assessing Officer after considering the DVO‟s valuation report. It is an undisputed fact that the assessee has disclosed sale consideration of the land as Rs.1,10,00,000/-. During the scrutiny assessment proceedings reference was made to DVO for the valuation of property. The DVO vide report dated 30-12-2013 determined the fair market value of the property as Rs.1,20,38,000/-. The difference between actual sale consideration declared by the assessee and the fair market value determined by the DVO is approximately 9.43%. We find that the Co- ordinate Bench of the Tribunal in the case of Dattatraya Kerba Lonkar Vs. Deputy Commissioner of Income Tax (supra) after considering various decisions including the decision rendered in the case of Rahul Constructions Vs. Deputy Commissioner of Income Tax (supra) and the judgment of Singh Vs. Commissioner of Income Tax (supra) has held as under: “8. We find merit in the submission of Ld. A.R. the difference between the fair market value determined by the DVO and actual sale consideration is Rs.7,14,530/- i.e slightly more than 2 per cent of the sale consideration. The co-ordinate Bench of the Tribunal in the case of Rahul Construction V/s. DCIT (supra) has held that where difference between the sale consideration declared by the assessee and fair market value as determined by the DVO u/s 50C is less than 10 percent, the Assessing Officer was not justified in substituting the value determined for sale consideration disclosed by the assessee. The Co-ordinate Bench after considering the provisions of Section 50C of the Act and the provision of section 23A and 24(5) of the Wealth Tax Act held as under :- 13. Combined reading of the above provisions shows that the valuation adopted by the DVO is subject to appeal and the same is not final. In the instant case we find that as against the value of Rs.28,73,000/- adopted by the stamp valuation authorities, the DVO has determined the FMV on the date of transfer at Rs.20,55,000/-. This itself shows that there is wide variation between the two values. Further, the value adopted by the DVO is also based on some estimate. We find that the difference between sale consideration shown by the assessee at Rs.19,00,000/- and the FMV determined by the DVO at Rs.20,55,000/- is only Rs. 1,55,000 which is less than 10 per cent. The Courts and Tribunals are consistently taking a liberal approach in favour of the assessee where the difference between the value adopted by the assessee and the value adopted by the DVO is less than 10 per cent. 13 Yashoda Builders And Developers ITA no.302/Nag./2024 14. We find that the Pune Bench of the Tribunal in the case of Asstt. CIT V/s. Harpreet Hotels (p) Ltd. vide ITA Nos. 1156- 1160/pn/2000 and relied on by the learned counsel for the assessee had dismissed the appeal filed by the Revenue where the CIT(A) had deleted the unexplained investment in house construction on the ground that the difference between the figure shown by the assessee and the figure of the DVO is hardly 10 percent. 15. Similarly, we find that the Pune Bench of the Tribunal in the case of ITO V/s. Kaaddu Jayghosh Appasaheb, vide ITA No.441/PN/2004 for the asst. yr 1992-1993 and relied on by the learned counsel for the assessee following the decision of the J&K High Court in the case of Honest Group of Hotels (P) Ltd. V/s CIT (2002) 177 CTR (J&K) 232 had held that when the margin between the value as given by the assessee and the Departmental valuer was less than 10 per cent , the different is liable to be ignored and the addition made by the A.O cannot be sustained. 16. Since in the instant case such difference is less than 10 per cent and considering the fact that valuation is always a matter of estimation where some degree of difference bound to occur, we are of the considered opinion that the A.O.in the instant case is not justified in substituting the sale consideration at Rs.20,55,000 as Against the actual sale consideration of Rs.19,00,000/- disclosed by the assessee. We, therefore, set aside the order of the CIT(A) and direct the A.O. to take Rs.19,00,000/- only as the sale consideration of the property. The grounds raised by the assessee are a accordingly allowed.” 9. The ld .A.R of the assessee has further placed reliance on the decision of Hon‟ble Patna High Court in the case of Bimla Singh v/s. CIT (supra) wherein Hon‟ble High Court has held that difference between the cost of construction shown by the assessee and as determined by the Assessing Officer being less than 15 percent, the same is to be ignored for the purposes of addition. High Court in the case of CIT V/s. Sadna Gupta 352 ITA 595 held that unless and until there was some other evidence to indicate that extra consideration had flowed in transaction for purchase of property, report of DVO could not form basis of any addition on part of revenue. In absence of any evidence no reliance could be placed on the report of DVO for making addition. 14 Yashoda Builders And Developers ITA no.302/Nag./2024 10. Thus, in view of the fact that the difference between sale consideration and the market value determined by the DVO is not substantial and is approximately little over 2 per cent of the actual sale consideration, we find no reason for rejecting actual sale consideration mentioned in the Sale Deed for determining long term capital gain. Accordingly, the ground No.1 raised in appeal by the assessee is allowed. The Assessing Officer is directed to adopt actual sale consideration as mentioned in the Sale Deed as a fair market value for determining the long term capital gain.” 6. In the light of the facts of the case and the decisions discussed above, we find merit in the submissions of assessee. In the present case, since difference between the value declared by the assessee and the value determined by the DVO is less than 10%, no addition in respect of Long Term Capital Gains is warranted. The findings of Commissioner of Income Tax (Appeals) on this issue are accordingly, set aside and the appeal of assessee is allowed.” It would be relevant to mention here that the afore mentioned decision was rendered with reference to provisions of Section 50C of the Act. The addition in the instant case is made u/s 43CA of the Act. I find that the provisions of both the sections are pari materia, except that the provisions of section 43CA operate in respect of consideration received on transfer of an asset (other than capital asset) being land or building or both and provisions of section 50C are attracted on transfer of capital assest being land or building or both. Hence, the decision rendered u/s.50C of the Act giving leverage of minor variation, in the value declared by the assessee and the stamp duty value would equally hold good for variation in the value u/s 43CA of the Act. Thus, from the above decision it can be safely deduced that where the difference between sale consideration declared by the assessee and stamp duty value of an asset (other than capital asset) being land or building or both is less than 10%, no addition under section 43CA of the Act is warranted. 6. Here, it would be relevant to mention that the Finance Act 2018 has inserted a proviso to sub-section (1) of section 43CA providing 5% tolerance limit in variation between declared sale consideration vis-à-vis stamp duty value for making no addition. Similar proviso was inserted by the Finance Act 2018 to sub-section(1) to section 50C of the Act. The said tolerance limit band was enhanced from 5% to 10% by the Finance Act 2020 w.e.f. 01/4/2021. The Tribunal in the case of Maria Fernandes Cheryl vs. ITO (International Taxation) reported as 123 taxmann.com 252 (Mumbai) after considering various decision and the CBDT Circular No.8 of 2018 dated 26-12- 2018 held, that the amendment is retrospective in nature and relates back to the date of insertion of statutory section to the Act. The relevant extract of the observations made by the Bench reads as under: 15 Yashoda Builders And Developers ITA no.302/Nag./2024 7. ………. The insertion of the third proviso to section 50C(1) provides s for this tolerance band with respect to a certain degree of variations between the stamp duty valuation and the stated consideration of an immovable property. In other words, as long as the variations are within the permissible limits, the anti-avoidance provisions of Section 50C do not come into play. As we have noted earlier, the CBDT itself accepts that there could be various bonafide reasons explaining the small variations between the sale consideration of immovable property as disclosed by the assessee vis-à-vis the stamp duty valuation for the said immovable property. Obviously, therefore, disturbing the actual sale consideration, for the purpose of computing capital gains, and adopting a notional figure, for that purpose, will not be justified in such cases. On a conceptual note, an estimation of market price is an estimation nevertheless, even if by a statutory authority like the stamp duty valuation authority, and such a valuation can never be elevated to the status of such a precise computation which admits no variations. The rigour of Section 50C(1) was thus relaxed, and very thought fully so, to take these bonafide cases of small variations between the stated sale consideration vis-à-vis stamp duty valuation, out of the scope of adjustments contemplated in the computation of capital gains under this anti-avoidance provision. In our humble understanding, it is a case of a curative amendment to take care of unintended consequences of the scheme of Section 50C. It makes perfect sense, and truly reflects a very pragmatic approach full of compassion and fairness, that just because there is a small variation between the stated sale consideration of a property and stamp duty valuation of the same property, one cannot proceed to draw an inference against the assessee, and subject the assessee to practically prove his being truthful in stating the sale consideration. Clearly, therefore, this insertion of the third proviso to Section 50C(1) is in the nature of a remedial measure to address a bonafide situation where there is little justification for invoking an anti- avoidance provision. Similarly, so far as enhancement of tolerance band to 10% by the Finance Act 2020, is concerned, as noted in the CBDT circular itself, it was done in response to the representations of the stakeholders for enhancement in the tolerance band. Once the Government acknowledged this genuine hardship to the taxpayer and addressed the issue by a suitable amendment in law, the next question was what should be a fair tolerance band for variations in these values. As a responsive Government, which is truly the hallmark of the present Government, even though the initial tolerance band level was taken at 5%, in response to the representations by the stakeholders, this tolerance band, or safe harbor provision, was increased to 10%. There is no particular reason to justify any particular time frame for implementing this enhancement of tolerance band or safe harbour provision. The reasons assigned by the CBDT, i.e., \"the variation between stamp duty value and actual consideration received can occur in respect of similar properties in the same area because of a variety of factors, including the shape of the plot or location,\" was as much valid in 2003 as it is in 2021. There is no variation in the material facts in this respect in 2021vis-à-vis the material facts in 2003. What holds good in 2021 was also good in 2003. If variations upto 10% need to be tolerated and need not be probed further, under section 50C, in 2021, 16 Yashoda Builders And Developers ITA no.302/Nag./2024 there were no good reasons to probe such variations, under section 50C, in the earlier periods as well. We are, therefore, satisfied that the amendment in the scheme of Section 50C(1), by inserting the third proviso thereto and by enhancing the tolerance band for variations between the stated sale consideration vis-à-vis stamp duty valuation to 10%, are curative in nature, and, therefore, these provisions, even though stated to be prospective, must be held to relate back to the date when the related statutory provision of Section 50C, i.e. 1st April 2003. In plain words, what is means is that even if the valuation of a property, for the purpose of stamp duty valuation, is 10% more than the stated sale consideration, the stated sale consideration will be accepted at the face value and the anti-avoidance provisions under section 50C will not be invoked. 8. Once legislature very graciously accepts, by introducing the legal amendments in question, that there were lacunas in the provisions of section 50C in the sense that even in the cases of genuine variations between the stated consideration and the stamp duty valuation, anti- avoidance provisions under section 50C could be pressed into service, and thus remedied the law, there is no escape from holding that these amendments are effective with effect from the date on which the related provision, i.e., Section 50C, itself was introduced. These amendments are thus held to be retrospective in effect. In our considered view, therefore, the provisions of the third proviso to Section 50C (1), as they stand now, must be held to be effective with effect from 1st April 2003. We order accordingly. Learned Departmental Representative, however, does not give up. Learned Departmental Representative has suggested that we may mention in our order that \"relief is being provided as a special case and this decision may not be considered as a precedent\". Nothing can be farther from a judicious approach to the process of dispensation of justice, and such an approach, as is prayed for, is an antithesis of the principle of \"equality before the law,\" which is one of our most cherished constitutional values. Our judicial functioning has to be even-handed, transparent, and predictable, and what we decide for one litigant must hold good for all other similarly placed litigants as well. We, therefore, decline to entertain this plea of the assessee.” [Emphasis added now] As has been aptly explained above, the rational for holding newly inserted proviso to sub-section (1) to section 50C of the Act as curative in nature, hence, having retrospective application, the same analogy would apply to the provisions of Section 43CA of the Act. Both the sections are similarly worded except that both the sections have application on different sets of assessee. As has been pointed earlier, Section 43CA gets attracted where the consideration received or accrues as a result of transfer of an asset (other than a capital asset) being land or building or both. Whereas, provisions of section 50C operates where the consideration received or accrues as a result of transfer of a capital asset being land or building or both. Both the sections induce deeming fiction to substitute actual sale consideration with notional value of asset based on Stamp Duty valuation. Further, a perusal of Circular 8 of 2018 (supra) would show that identical reasons have been given in Para 16 for „Rationalization of Sections 43CA and 50C‟. The proviso has been inserted and subsequently tolerance bank 17 Yashoda Builders And Developers ITA no.302/Nag./2024 limit has been enhanced to mitigate hardship of genuine transactions in the real estate sector. Ergo, in the light of reasoning given for insertion of the proviso and exposition by the Tribunal for retrospective application of the said proviso, I have no hesitation in holding that the proviso to sub-section (1) to section 43CA and the subsequent amendment thereto relates back to the date on which the said section was made effective i.e. 01/4/2014. 7. In light of above findings, the Assessing Officer is directed to delete the addition of Rs.6,81,500/- under section 43CA of the Act. The impugned order is quashed and appeal of the assessee is allowed. 10. The learned Departmental Representative only submitted that during the assessment year 2017 18, the tolerance band was up to 5%, however, we reject his argument in view of the decision of the Co ordinate Bench cited supra since the difference is below tolerance band, the entire addition of 57,68,020, is directed to be deleted. Accordingly, all the ground no.2, raised by the assessee in its appeal for the assessment year 2017 18 is allowed.” 16. The facts in assessee’s case clearly indicate that difference in the value between the fair market value as per Valuation Officer and sale consideration received and ready recoknor value of Plot No.270 is within the tolerance band. Thus no addition ought to have been made in the assessment order. In respect to Plot No.270 no mandatory reference is made to the Valuation Officer. Respectfully following the decision of this Tribunal reproduced hereinabove and various judicial precedents discussed/relied in the submission of assessee reproduced hereunder, we are of the considered opinion that the addition made in the assessee’s case at ` 45,08,931, is unjustified hence directed to be delete. Accordingly grounds no.1 to 7, raised by the assessee are allowed. 17. In ground no.8, the assessee has challenged levy of interest under section 234A, 234B and 234C of the Act. Consequential relief on account of relief in quantum addition is directed to be granted. 18 Yashoda Builders And Developers ITA no.302/Nag./2024 18. In the result, appeal filed by the assessee is partly allowed. Order pronounced in the open Court on 04/02/2025 Sd/- V. DURGA RAO JUDICIAL MEMBER Sd/- K.M. ROY ACCOUNTANT MEMBER NAGPUR, DATED: 04/02/2025 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Sr. Private Secretary ITAT, Nagpur "