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2007 (7) TMI 361 - AT - Income TaxComputation of capital gains - Addition u/s 50C - Determination of sale consideration of residential property - valuation considered as on the date of sale - non-speaking order of the learned CIT(A) - HELD THAT:- In the present case, the assessee had shown a sale consideration of Rs. 21,50,000, the stamp valuation authority had adopted the value at Rs. 37,51,480. The DVO has determined the value at Rs. 37.75 lacs which is higher than valuation made by the stamp valuation authority. The AO has, therefore, adopted the valuation as made by stamp valuation authority and accordingly calculated the capital gains. The learned CIT(A) has confirmed the same. We do not find any infirmity in the action taken by the authorities below and the ld AR has also not been able to point out any error. The argument of the ld AR has been that the DVO had not considered the post-purchase construction made by the purchaser but we notice that the DVO had actually considered such construction by the purchaser and given effect to by only adopting the area and space as existing on the date of the sale as per sale deed. Therefore, we do not find any material which would substantiate the argument of the assessee. The next objection of the assessee is that the AO has not given any importance to the quality of construction. The sale deed showed that construction was simple and it was six years old before being sold. However, we do not find any material to show that valuation made by the DVO was anyway adversely affected because of this factor or that he has not taken these factors into account while valuing the property u/s 50C(2). Another objection was that the AO has not given any credence to the report of the Government approved valuer, whose report was made the basis for determination of sale price and the property was sold accordingly as per sale deed. In our considered view, this objection has no merit because what has to be compared as per s. 50C(3) is the DVO's report and stamp duty valuation and nothing else. For the purposes of invoking s. 50C(1) what is to be compared is the sale consideration as shown by the assessee and the valuation shown by stamp valuation authorities. The report of the approved valuer is an alien evidence for the purpose of applying s. 50C(1) or s. 50C(3). Accordingly, we do not find any merit in various contentions raised by the ld AR. Where s. 50C is invoked, then there is no scope of any discretion and the AO is duty bound to adopt the valuation made by stamp valuation authority if it is higher than the sale consideration shown by the assessee. However sub-s. (3) of s. 50C does provide some latitude. Where valuation made by DVO is higher, then the valuation by stamp valuation authority will be adopted for sale consideration declared but where the valuation made by DVO is less than the valuation made by the stamp valuation authority, then he may adopt such fair market value to be the full value of consideration. Thus, the discretion available to the AO, if any, is limited to this extent and as clarified in the Departmental Circular referred. In the present case, we do not find any material to come to the conclusion that valuation adopted by the DVO was lesser or could have been lesser than the valuation made by stamp valuation authority and therefore, we do not find any discretion available to the AO within the sub-s. (3) of s. 50C. As a result, we do not find any force in the appeal filed by the assessee. The order of the learned CIT(A) is upheld and the appeal filed by the assessee is dismissed.
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