TMI Blog2014 (10) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 14.76 crores as determined by the SRO for stamp duty purpose - AO’s action cannot be approved - When the assessee has objected to the SRO value and the valuation of the property has been referred to the DVO, the AO is duty bound to take into account the valuation made by the DVO and thereafter compute the capital gain in terms with section 50C(3). Assessee has complied to the provisions of section 50C(2) and AO has referred the valuation to DVO - adoption of SRO value by completely ignoring the valuation made by the DVO is totally wrong and in violation of statutory mandate of section 50C - value determined by SRO cannot be considered as the fair market value of the property for computation of capital gain. Determination of value by DVO – Held that:- section 50C is a deeming provision, assessee is required to establish that sale consideration shown by him is the actual fair market value as on the date of execution of agreement of sale cum GPA on 30/10/2008 - Neither the assessee nor the department has brought any substantive evidence on record to justify the value adopted by them – thus, the matter is required to be remitted back to the AO for fresh adjudication – Decided i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Fair Market Value for assessment of capital gains. 8. Without prejudices to the above the appellant contends that departmental valuation report is binding on the AO and erred in not accepting the value. 9. The learned CIT(A) erred in holding that the appellant did not dispute guideline value u/s 50C of the Act before any Courts and therefore valuation officers report does not find any merit. 10. Authorities below did not place any evidence to support that the appellant received sale consideration mentioned for stamp duty purpose, while the value u/s 50C was adopted dislodging real consideration received. 11. The ld. AO having arrived acquisition cost on 01/04/1981 at ₹ 5.16 lakhs erred in not allowing indexation and consequent deduction to the share of the appellant at ₹ 2.50 lakhs instead ₹ 43,020/- allowed. 12. Authorities below are not correct in denying exemption of investment of ₹ 35 lakhs made in Bonds u/s 54EC of the Act. 13. The appellant craves leave to file additional grounds before the disposal of the appeal and prays that the sale value received by the appellant be directed to be accepted. 3. As facts are identical, we wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee concluded that provisions of section 50C(1) is applicable and accordingly computed the capital gain by adopting the FMV determined by the registering authority for stamp duty purpose at ₹ 14,76,00,000/-. On the basis of such SRO value, assessee s share in the sale consideration was considered at ₹ 1,23,00,000/- after allowing deduction towards indexed cost of acquisition at ₹ 43,020/-, the long term capital was computed at ₹ 1,22,56,980/-. Being aggrieved of assessment order, so passed, the assessee preferred appeal before the CIT(A). 5. Before the CIT(A), the assessee apart from contesting the finding of the AO with regard to adoption of SRO value also raised additional ground to the effect that the AO should have considered the valuation made by the DVO in the report submitted by him by determining the value of the property at ₹ 43.41 lakhs per acre as against SRO value of ₹ 82 lakhs per acre. 6. The CIT(A) after considering the submissions of the assessee and examining the facts and materials on record noted that the AO indeed had made a reference to the Valuation Cell on 30/12/2011. However, before the Valuation Report was rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alendar year upto 01/11/07 the co-owners received further amount of ₹ 93 lakhs through 14 account payee cheques. It was submitted that after receipt of total sale consideration of ₹ 4,50,00,000/- the deeds were registered and possession was delivered on 30/01/2009. It was submitted that while at the time of sale of land on 04/09/2007 the land value as per SRO guideline was ₹ 35.00 lakhs per acre but at the time of registration of transfer deeds on 30/10/2009 the land value as per SRO guideline had increased to ₹ 82 lakh per acre. It was submitted that though the assessee had objected to SRO value during the assessment proceeding and even though the AO had made a reference to the DVO but rejecting the objections of the assessee, the AO had computed capital gain by accepting the SRO value of ₹ 14,76,00,000/-. In this context, the learned AR referred to the valuation report of the registered valuer, DVO and SRO value as on 01/01/2007 as per the certificates issued in some other cases. The learned AR submitted that as the assessee has received the entire sale consideration through a/c payee cheques and there is no material in the possession of the departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cre. Surprisingly, the AO ignoring the statutory mandate as contained u/s 50C(2) and (3) completed the assessment on the very same day he referred the valuation to the DVO by adopting the value of property at ₹ 14.76 crores as determined by the SRO for stamp duty purpose. In our view, AO s action cannot be approved. When the assessee has objected to the SRO value and the valuation of the property has been referred to the DVO, the AO is duty bound to take into account the valuation made by the DVO and thereafter compute the capital gain in terms with section 50C(3). Unfortunately, though the CIT(A) was aware of the aforesaid factual position, she has confirmed the assessment by misinterpreting the provisions contained u/s 50C. A plain reading of section 50C would make it clear that though sub-section (1) postulates adoption of SRO value where the consideration shown by the assessee is less but subsection (2) carves out an exception by providing that if the assessee objects to the SRO value and he has not disputed the SRO value before any authority or court, then the AO may refer the valuation to Valuation Officer. Sub-section (3) provides that if the valuation made by the DVO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of the property and examining all materials on record. Still, if there are no evidence to indicate the actual fair market value of the property as on the relevant date then the AO may estimate the fair market value of the asset reasonably by taking into consideration assessee s submissions. However, we make it clear that in no case the FMV should exceed the valuation made by the DVO. The AO must afford a reasonable opportunity of being heard to the assessee before deciding the issue. 11. Ground No. 11 is in respect of cost of acquisition of property on 01/04/1981 as arrived by the AO. 12. Neither, learned AR has advanced any argument in this regard nor there is any material to justify the claim of the assessee, hence, this ground is dismissed. 13. Ground No. 12 is in respect of denial exemption u/s 54EC of the Act. 14. Though, at the time of hearing, learned AR has not advanced any specific argument in support of the aforesaid ground, however, considering the fact that we have directed the AO to determine capital gain afresh after ascertaining the fair market value of the property on the date of sale, we also remit this issue to the file of the AO for considering ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
