9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2008 (4) TMI 534 - AT - Income TaxComputation of capital gain u/s 48 - Determination of full value of consideration u/s 50C - ignoring the provisions of section 50C(1) and 50C(2) of the Act - capital gains from the property are required to be worked out by adopting the market value on which the stamp duty has been paid by the assessee or are to be worked out as per the valuation by the Valuation Cell of the Income-tax Department? - HELD THAT - In the instant case undisputedly the assessee contended before the AO that the actual consideration received by the assessee should be taken as the market value of the properties sold and not the amount paid as stamp duty for the purposes of transfer of the properties because the same was on a higher side in view of the existing details and descriptions given by the assessee before the AO. Further the assessee in accordance with provisions of section 50C(2) of the Act requested the AO to refer the properties for valuation to the Valuation Cell of the Income -tax Department and adopt the same as full market value of the properties for working out the capital gains. AO has not done so hence in our opinion the CIT(A) on considering the provisions of section 50C(2) of the Act has rightly directed the AO to refer the properties to the Valuation Cell of Income-tax Department for the purpose of valuation of the property and thereafter adopt the valuation for working out the capital gains. Since the direction issued by the CIT(A) is in accordance with the provisions of section 50C of the Act we find no illegality or infirmity in the well reasoned order of the CIT(A) and accordingly the same is upheld and ground of appeal taken by the Revenue is rejected. In the result the appeal filed by the Revenue is dismissed.
Issues Involved:
1. The correctness of the CIT(A)'s direction to the Assessing Officer to adopt the value estimated by the Valuation Officer (V.O.) for computing capital gains. 2. The application of Section 50C of the Income-tax Act, 1961 in determining the full value of consideration for the transfer of immovable property. Detailed Analysis: 1. The Correctness of CIT(A)'s Direction: The Revenue challenged the CIT(A)'s order directing the Assessing Officer to adopt the valuation estimated by the Valuation Officer (V.O.) for computing capital gains. The CIT(A) had observed that the officers in the Valuation Department are more technically qualified than those in the State Government who fix the value for stamp duty purposes. The CIT(A) noted that circle rates are fixed locality-wise and not with reference to a particular property. Therefore, the CIT(A) directed the Assessing Officer to adopt the V.O.'s valuation for working out the capital gains. 2. Application of Section 50C of the Income-tax Act, 1961: The core issue was whether the capital gains should be computed based on the market value for stamp duty purposes or the valuation by the Income-tax Department's Valuation Cell. The relevant provisions of Section 50C were analyzed: - Section 50C(1): If the consideration received from the transfer of a capital asset (land or building) is less than the value adopted by the State Government for stamp duty purposes, the latter value is deemed to be the full consideration for computing capital gains. - Section 50C(2): If the assessee claims that the stamp duty value exceeds the fair market value and has not disputed this value in any appeal, the Assessing Officer may refer the valuation to a Valuation Officer. - Section 50C(3): If the Valuation Officer's determined value is less than the stamp duty value, the former is adopted for capital gains computation. If it exceeds the stamp duty value, the latter remains the adopted value. The assessee had contended that the actual consideration should be taken as the market value due to various factors affecting the property value, such as old tenants, poor location, and pending litigation. The assessee had requested the Assessing Officer to refer the valuation to the Valuation Cell, which the Assessing Officer did not do. The CIT(A) directed the Assessing Officer to refer the properties to the Valuation Cell, which was consistent with Section 50C(2). Conclusion: The Tribunal upheld the CIT(A)'s order, noting that the CIT(A)'s direction to refer the properties to the Valuation Cell was in accordance with Section 50C of the Income-tax Act. The Tribunal found no illegality or infirmity in the CIT(A)'s order and dismissed the Revenue's appeal. The capital gains should be computed based on the valuation by the Valuation Cell rather than the stamp duty value, aligning with the statutory provisions. Result: The appeal filed by the Revenue was dismissed.
|
