Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2007 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2007 (7) TMI 350 - AT - Income TaxComputation of capital gains u/s 48 - Determination of sale consideration - Applicability Of section 50C - CIT(A) adopted the sale consideration of property at value taken by the stamp valuation authority, as against the actual sale consideration by applying provisions of s. 50C of the Act - CIT(A) ought to have adopted the sale consideration of property as per the valuation done by the Departmental Valuation Officer (DVO) - HELD THAT:- It is an undisputed position that even as per the DVO, the fair market value of the property. In these circumstances, the full value of consideration, for the purposes of s. 48, cannot be taken at a figure higher than Rs. 11,42,100. The scheme of s. 50C(2) clearly mandates so. The action of the authorities below in ignoring the DVO's report cannot be justified at all. We are, therefore, of the considered view that in no case, the full value of consideration on transfer of the property, for the purposes of computing the capital gains u/s 48, can be taken at a figure higher than Rs. 11,42,100. The DVO has simply adopted the average circle rate of residential and commercial area, on the ground that interior area of the locality, where the assessee's property is situated, is mixed developed area i.e. shops and offices on the ground floor and residence on the upper floors. When DVO's valuation required to compare the same with the valuation by the stamp valuation authority, it is futile to base such a report on the circle report itself. Such an approach will render exercise u/s 50C(2) a meaningless ritual and an empty formality. In our considered view, in such a case, the DVO's report should be based on consideration stated in the registration documents for comparable transactions, as also factors such as inputs from other sources about the market rates. Therefore, we remit the matter to the file of the AO. The DVO will value the property de novo, in the light of our above observations, and in case the valuation so arrived at by the DVO is less than Rs. 11,42,100, the AO shall adopt the fresh valuation so done by the DVO for the purpose of computing capital gains u/s 48 of the Act. We direct so to.
|