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2010 (11) TMI 129 - AT - Income TaxComputation of short term capital gain - The assessee was called upon to explain as to why the provisions of section 50C be not applied for the purposes of computing capital gain - The assessee was called upon to explain as to why the value adopted by DVO be not rejected - Admittedly the stamp value of the said flat on the date of transfer was ₹ 1.18 crores - It is apparent from a bare perusal of the above provision that the directive of sub-section (1) of section 50C is not absolute - The mechanism for redressal of grievance by the assessee in a case where such stamp valuation is on a higher side, has been enshrined in sub-section (2) of section 50C - It is not open to the Assessing Officer to set aside the report of the Valuation Officer and then go by his own whims and fancies From sub-section (2) of section 50C it can be noticed that where the assessee disputes the valuation of stamp valuation authority, “the Assessing Officer may refer the valuation of the capital assets to a Valuation Officer - if the value determined by the DVO under sub-section (2) is lower than that of the value adopted, assessed or assessable by the stamp valuation authority under sub-section (1), the value so estimated under sub-section (2) shall be binding on the Assessing Officer and the assessment shall be made accordingly. In our considered opinion both the authorities below erred in taking shelter of the provisions of sub-section (3) of section 50C in disregarding the value determined by the DVO. DVO determined fair market value at ₹ 46.48 lakhs, which is lower than the value for the purpose of stamp duty at ₹ 1.18 crore - As per the provisions of section 50C(2), the capital gain is required to be computed by considering the fair market value of the property at ₹ 46,48,781 as the full value of the consideration received or accruing to the assessee as a result of the transfer of capital asset - In the result, the appeal is partly allowed for statistical purposes.
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