· During the year, assessee relinquished his rights in respect of a commercial space for a total consideration of Rs.56,20,00,000/-.The plot was acquired by assessee for Rs.20,15,55,501/-. Therefore, the difference of Rs.36,04,44,499/- was shown by the assessee in its P&L a/c.
· The AO referred the matter to the DVO, who ascertained the value at Rs.67,09,04,000/-. Therefore, the AO made the addition of the differential amount of Rs.11,23,89,000/-, as per the provisions of section 50C.
· The CIT(A), however, deleted the addition observing that since the value adopted by assessee was more than the value as per the circle rates adopted by Stamp Valuation Authority, the provisions of section 50C(1) could not be attracted in the case of assessee.
· The Tribunal, in addition to the applicability of section 50C(1), further took note of the fact that the provisions of section 50C(3) restrict the value of consideration to the value ascertained by the Stamp Valuation Authority in a case where the value ascertained by the DVO is more than the value ascertained by the Stamp Valuation Authority.
· Therefore, since the value adopted by assessee was more than the value ascertained by the Stamp Valuation Authority, the Tribunal concluded that the no addition on account of section 50C could be made in the case of assessee.
For further reading, refer the attachment.
Further Reading