Date:25/08/2008 URL: http://www.thehindu.com/2008/08/25/stories/2008082550051500.htm

Business

Stamp value: marginal differences may be ignored

In a recent case where the agreed consideration recorded on the sale date was Rs. 50 lakh, the valuation officer fixed at Rs. 56 lakh and the stamp duty value was Rs. 70 lakh. The assessing officer has limited the addition to Rs. 6 lakh as per valuation report. Since the difference is hardly 10 per cent, could it not have been accepted by the assessing officer without driving the assessee to appeal.

The assessing officer is bound by the valuation report from the valuation officer.

But there is a right of appeal. Marginal variations are bound to be ignored. There is an unwritten inference in law that the law is not concerned with trifles.

At any rate, there is an authority from the Supreme Court in the matter of right to pre-emptive purchase of property under Chapter XX-C, which is now deleted. Where the fair market value was considered by the Appropriate Authority to be more than the agreed consideration in the agreement for sale registered with the Appropriate Authority under the requirements of Chapter XX-C, the Supreme Court in C. B. Gautam v Union of India (1993) 199 ITR 530 (SC) recognised a tolerance limit of 15 per cent, being the difference between the value adopted in the document and the value adopted for registration.

Such relaxation was understood by the Supreme Court as one required to be borne in mind, though the law itself does not make any such provision for exception for marginal valuation.

But it is implied law in the context of the fact that fair market value is not the price which can be precisely measured with reference to any absolute criteria.

S. RAJARATNAM