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2023 (6) TMI 219 - AT - Income TaxRevision u/s 263 - long term capital gains returned by the assessee with a direction to AO to re-do the same by referring to the valuation of the property to DVO and also to reclassify the income as business income instead of long term capital gains as returned by the assessee and after giving an opportunity of hearing to the assessee - HELD THAT:- In the instant case, the assessee has not disputed the value of the estate as per the Stamp Valuation Authority but has preferred to adopt sale consideration actually received at Rs. 6,34,23,000/- as against the value of the Stamp Valuation Authority for the purpose of computing Capital gains. It is also admitted that the AO has not looked into these aspects while framing the assessment u/s. 143(3) r.w.s 144C(3) of the Act. Since the Ld. AO has failed to cause any enquiry on the above issues before passing the assessment order, Pr. CIT has held that the order of the Ld. AO passed u/s.143(3) r.w.s 144C(3) of the Act is not only erroneous but also prejudicial to the interest of the Revenue and accordingly, we are of the considered view the jurisdiction exercised by the Ld. Pr. CIT U/s. 263 of the Act is valid in law. Treatment of the income as capital gains or business income arising out of the sale of the industrial land by the assessee by converting it into various parts - From the plain reading of the 3rd proviso to section 50C(1) of the Act, we find that the value adopted or assessed or assessable by the stamp valuation authority does not exceed one hundred and ten percent [110%] of the consideration received or accruing as a result of the transfer. Accordingly, the consideration received shall be deemed to be the full value of consideration for the purposes of section 48 of the Act. In the instant case, the Ld. DVO has valued the property at Rs. 6,96,36,350/- which is less than 110% of the value of sale consideration received by the assessee as declared in the sale deeds. Since the character of the land has not been recategorized and has been sold as a fixed asset by the assessee, we hereby direct the Ld. AO to compute the income of arising out of the sale of the parts of the industrial land as capital gains of the assessee by considering the actual consideration received by the assessee. Thus, the grounds raised by the assessee are allowed.
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