Shreyas Naynesh Modi v. ITO : The ten percent safe harbour limit applies to the fair market value determined by the Valuation Officer under section 56(2)(x).

50. [2026] 136 ITR(T) 489 (Mumbai - Trib.)

Shreyas Naynesh Modi v. Income-tax Officer

A.Y.: 2018-19 DATE: 23.01.2026

Sec. 56(2)(x) r.w.s. 50C and 55A - Assessee purchased flat for Rs. 2.65 crore against stamp duty valuation of Rs. 3.79 crore – On assessee's objection, reference to DVO was made who determined FMV at Rs. 2.81 crore – Addition made under section 56(2)(x) on difference between DVO's FMV and purchase consideration – Whether, the DVO's FMV replaces SDV and safe harbour limit of 10% applies with reference to FMV determined by DVO – Held, yes

The assessee, an individual, filed his return of income for A.Y. 2018-19 declaring total income of about Rs. 8.07 lakhs. The case was selected for scrutiny and notices under sections 143(2) and 142(1) were issued.

He had purchased a flat in Mumbai on 12.04.2017 for a consideration of Rs. 2.65 crores. A registered valuer had estimated its market value at Rs. 2.50 crores, whereas the stamp duty valuation was Rs. 3.79 crores.

During assessment proceedings, the assessee disputed the applicability of section 56(2)(x) and requested that a reference be made to the Departmental Valuation