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2012 (9) TMI 356 - AT - Income TaxValidity of revisionary order passed u/s 263 - under-assessment of capital gain - non-applicability of Section 50C by AO - Held that:- In instant case, AO has not examined the applicability of section 50C. Nothing has been brought on record to show that any such enquiry had been made by the AO in the course of assessment proceedings. In view of the specific provisions of section 50C, the AO ought to have examined this aspect and failure to do so renders the order of assessment erroneous and prejudicial to the interests of revenue. Therefore, CIT was justified in initiating proceedings u/s. 263 With regard to the merits of the order, it is found that provisions of section 50C(2) provide for a reference to the DVO, if the assessee makes a claim that the guidelines value for the purpose of stamp duty exceeds the fair market value of the property as on the date of transfer. Since the AO has not made any enquiries with regard to the application of section 50C, the assessee had no occasion to exercise his right u/s. 50C. Hence, AO is directed to make a reference to the DVO u/s 50C and thereafter compute the capital gain on transfer of capital asset. Thus, the order u/s. 263 is modified as stated above - Decided partly in favor of assessee.
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