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2017 (12) TMI 736 - AT - Income TaxApplicability of section 50C - valuation made by the Departmental Valuation Officer - assessee sold property for ₹ 45 lakhs and stamp duty value of the property is ₹ 60.54 lakhs thereby, as the assessee is having 1/3 share only addition in the hand of the assessee of ₹ 5.18 lakhs is confirmed - assessee has contested that the stamp duty rates cannot be applied in the case of assessee as in the same vicinity and sector the plots of the same area have been transferred even for lesser consideration. Held that:- Stamp duty is payable by the purchaser & it is for the purchaser to either accept it or dispute it. The assessee could not, on the basis of the price fixed by the Sub-Registrar, have claimed anything more than the agreed consideration of a sum of ₹ 10 lakhs which, according to the assessee, was the highest prevailing market price. It would follow automatically that his case was that the fair market value of the property could not be ₹ 35 lakhs as assessed by the District Sub Registrar. In a case of this nature the AO should, in fairness, have given an option to the assessee to have the valuation made by the Departmental Valuation Officer (DVO) contemplated u/ s 50C. Therefore as a matter of course, in all such cases the AO should give an option to the assessee to have the valuation made by the DVO. The valuation by the DVO is required to avoid miscarriage of justice. The legislature did not intend that the capital gain should be fixed merely on the basis of the valuation to be made by the District Sub Registrar for the purpose of stamp duty. The legislature has taken care to provide adequate machinery to give a fair treatment to the citizen/taxpayer. There is no reason why the machinery provided by the legislature should not be used and the benefit thereof should be refused. Even in a case where no such prayer was made the AO, discharging a quasi judicial function, has the bounden duty to act fairly and to give a fair treatment by giving him an option to follow the course provided by law. For the reasons set out above, and with the observations as above, we remit the matter to the file of the AO for recomputation of taxable capital gains. The AO shall decide the matter afresh in accordance with the law, by way of a speaking order and after giving due and fair opportunity of hearing to the assessee. The AO shall also require the DVO to submit valuation report in terms of above provisions of the law. - Appeal of the assessee is allowed for statistical purposes
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