The Jaipur bench of Income Tax Appellate Tribunal, has recently ruled that while computing capital gains, the AO shall adopt the value Declared By the Assessee, if the difference between the valuation adopted by the SVA and declared by the assessee is less than 10%. The Tribunal was considering an appeal filed by the assessee against the assessment order passed by it by the Income Tax Authorities.
The return filed by the assessee was rejected by the officer by making addition on account of Long Term Capital Gain and income from other sources. The assessee challenged the said order before the Commissioner of Income Tax (Appeals)on ground that the method of computation of capital gain adopted by by the AO was not proper.
The assessee submitted that the difference between the sale consideration of the property as per registered Sale Deed as against the value adopted by the Stamp Valuation Authority was Rs. 12,70,120/- i.e. 2.11%. Since the difference was within the tolerable limits, which is 15% of variation, as recognized by the Hon’ble Supreme Court in the case of C.B. Gautamvs. Union of India (1993) 199 ITR 530, no addition should be made.
The Tribunal noticed the decision of the Coordinate Bench in the case of Rahul construction vs. DCIT in ITA No. 1543/PN/2007 (2010) 38 DTR (Pune Trib.) in which the Tribunal followed the above dictum of the Supreme Court. On this basis the Tribunal directed the AO to adopt the value as declared by the assessee since the difference between the valuation adopted by the Stamp Valuation Authority and declared by the assessee, in the instant case is less than 10%.
Read the full text of the order below.