TMI Blog2010 (5) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... Departmental Valuation Officer under section 50C(2) of the Income-tax Act, 1961. (3) The Commissioner of Income-tax (Appeals) failed to appreciate that reference under section 50C(2) to the Departmental Valuation Officer was imperative when the assessee disputes the valuation of the Special Deputy Collector (Stamps) as not being the fair market value contemplated under section 50C of the Act and hence confirming the Assessing Officer s order is untenable in law. (4) The Commissioner of Income-tax (Appeals) further failed to appreciate that the reference under section 50C(2) was for the purpose of computing the capital gains and was conceptually different from the value fixed by the Special Deputy Collector (Stamps) under section 47A of the Indian Stamp Act, intended only for fixing the stamp value and hence the denial of the reference as contemplated under the provisions of the Income-tax Act was unjustified and unsustainable in law. (5) The Commissioner of Income-tax (Appeals) ought to have considered the catena of decisions upholding the reference under section 50C(2) of the Act and thus directed the officer to make the reference to the Departmental Valuation Officer and ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cell. Thus he considered the guideline value as fixed by the Special Deputy Collector (Stamps) as the full value of consideration received on transfer of the property and thus worked out the capital gains. 4. Assailing the above before the learned Commissioner of Income-tax (Appeals), the submission of the assessee was that a right which was available to it under the Income-tax Act, could not be denied merely because there was a valuation done by the stamp valuation authority. The crux of its contention was that, despite its specific request, the Assessing Officer declined to refer the valuation to the Departmental Valuer. The assessee also tried to bring to the notice of the learned Commissioner of Income-tax (Appeals), certain alleged deficiencies in valuation made by the Special Deputy Collector (Stamps) and also certain locational disadvantages of the property. The learned Commissioner of Income-tax (Appeals) required a report from the Assessing Officer on the contentions of the Assessing Officer. The Assessing Officer thereupon reiterated what all was mentioned by him in the assessment order, in the report given to the learned Commissioner of Income-tax (Appeals). The lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot whether reference to a Departmental Valuer was mandatory or not, if an assessee had disputed the value fixed by the registration authority. In his opinion, the issue here was whether an assessee could claim reference to the Departmental Valuer when value adopted by the stamp valuation authority was itself referred before the Special Deputy Collector (Stamps). It was urged that the reference having been made under the Indian Stamp Act to the Special Deputy Collector (Stamps), no further reference of the same property for valuation could have been made by the Assessing Officer to the Departmental Valuer. 7. We have heard the rival submissions and perused the orders. The contention of the Department is that property was initially valued by the registration authority at Rs. 1,46,43,635 and the purchaser having objected to this value, the matter was referred to the Special Deputy Collector (Stamps) who fixed the guideline value at Rs. 1,28,03,500. Therefore, according to the Revenue, the assessee could not claim a reference of valuation of such property to the valuation cell of the Department. On the other hand, the assessee s grievance is that the value as fixed by the Special D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer, has not been truly set forth in the instrument, he would after registering such instrument, refer the same to the Collector for determination of the market value of such property. On receipt of the reference, the Collector shall, after giving the parties a reasonable opportunity of being heard and after holding an enquiry in such manner as may be prescribed by rules made under the Stamp Act determine the market value of the property. 30. Rule 4 of the Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968, provides the procedure on receipt of reference of the instrument under section 47A. As per rule 4, on receipt of a reference under sub-section (1) of section 47A, from a registering officer, the Collector shall issue a notice in Form I, to every person by whom, and to every person in whose favour the instrument has been executed, informing him of the receipt of the reference and asking him to submit to him his representations, if any, in writing to show that the market value of the property has been truly set forth in the instrument, and also to produce all evidence that he has in support of his representation, within 21 days from the date of servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value as determined by the stamp duty authority. Thus, a complete full proof safeguard has been given to the assessee to establish before the authorities concerned the real value. Thus, what is stated in section 50C as a real value cannot be regarded as a notional or artificial value and such real value is determinable only after hearing the assessee as per the statutory provisions stated supra. There is no indication either in the provisions of section 50C of the Income-tax Act or section 47A of the Stamp Act or Rules made thereunder about the adoption of the guideline value. Hence, the contention that section 50C is arbitrary and violative of article 14 cannot be accepted. Incidentally, we can refer the recent judgment of the Supreme Court in the case of the Government of Andhra Pradesh v. Smt. P. Laxmi Devi [2008] 4 SCC 720, in which even the onerous condition of deposit of fifty per cent. of the deficit duty for filing the appeal to the Collector is also upheld. 9. Thus it can be seen that the constitutional validity of section 50C of the Act was upheld after noting the various safeguards available to an aggrieved person regarding valuation of a property under the Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Departmental Valuation Officer then in that case this provision would be rendered redundant. The word may used in this sub-section signifies that in case the learned Assessing Officer is not satisfied with the explanation of the assessee, he should refer the matter to the Departmental Valuation Officer for the mentioned purpose. The learned authorised representative has relied on the decision of the hon ble Supreme Court rendered in the case of Ashok Leyland Ltd. v. Union of India [1997] 105 STC 152 wherein it has been held that the deeming provisions are rebuttable one. We have examined the entire facts of this case in the light of the provisions and precedents relied on before us. In our considered opinion the befitting reply of all the queries arose in our minds as well as raised by the parties is that the matter should be restored back to the file of the learned Assessing Officer with a direction that he shall refer this matter of valuation in the light of sub-section (2) of section 50C to the Departmental Valuation Officer for determining the consideration of this plot sold by the assessee under section 50C of the Act. The other connected grounds are also relate to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
