TMI Blog2011 (5) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... credit of Rs. 54588/- in the capital account, assessee neither submitted any evidence nor argued the issue before the ld. CIT(A). Accordingly, the ld. CIT(A) concluded that the assessee did not wish to press this ground. Even before us, though the assessee in his written submissions mentioned that amount has been transferred from treasury office, Government of Gujrat, however, no evidence in support of this statement has been submitted, appeal is dismissed Addition on the basis of long term capital loss - AO rejected the assessee's submission on the ground that the documents showed that the possession had been handed over to the buyer on 16-3-2005, and it also showed that the cheque No.944075 dated 21-2-2005 for a sum of Rs. 4 lacs was issued by the buyer and received by the assessee on 21-2-2005. The acceptance of the seller was also recorded in the sale deed. Therefore, the sale of the property had been concluded in the FY 2004-05 and consequently the indexation adopted by the assessee was not correct. The AO therefore recomputed the LTCL and disallowed the sum of Rs. 13,797 - assessee did not contest the issue before the ld. CIT(A), in the absence of any material so as to tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e circumstances of the case and in law the Ld. CIT(A)-II, Surat has erred in sustaining the addition of Rs. 13797 on the basis of long term capital loss. The same deserves to be deleted. (5) Your appellant reserves his right to add, amend, alter and/or withdraw any ground of appeal at the time of hearing of the appeal. 2. Since similar issues were involved, these appeals were heard simultaneously for the sake of convenience and are being disposed of through this common order. 3. Adverting first to ground no.1 in these appeals, facts in brief as per the relevant orders in the case of Shri Sanjaybhai Z. Patel, are that return declaring income of Rs.13,12,973/- filed on 28-3-2007, after being processed u/s. 143(1) of the Income Tax Act (hereinafter referred as the Act) was selected for scrutiny with the service of notice u/s. 143(2) on 27-9-2007.During the course of assessment proceedings, the Assessing Officer [A.O in short] noticed that the assessee sold his land at Rundh for which sale deed was registered below the value determined by the Stamp Valuation Authority[SVA]. To a query by the AO as to why the provisions of section 50C should not be invoked, the assessee replied th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee's share in the addition of Rs. 1,91,000 made u/s. 50C was only Rs.1,14,600.This fact apparently was not brought before the AO as is evident from the detailed assessment order where the AO has placed on record and discussed all possible angles and interpretations pertaining to the application of the provisions of section 50C of the I. T. Act. However, the AO is directed to verify the claim of the AR and take appropriate action in this regard. (6.1) The AR has made an interesting reference to the provisions of sec. 269C of the I.T. Act, and has argued that since the difference between the selling price estimated by the SVA and the document price was not more than 15%, no addition could be made by the AO. I am of the view that this argument of the AR is not really relevant. Section 269C deals with the acquisition of an immovable property, while section 50C allows for the value adopted by the SVA for the purpose of stamp duty to be adopted as the full value of the consideration received by the seller of an immovable property. Therefore, the provisions of sec. 269C cannot be read into provisions of section 50C so as to make the latter section completely inoperable a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e difference between the selling price estimated by the SVA and the document price was not more than 15%, o addition could be made by the AO. I am of the view that this argument of the AR is not really relevant. Sec. 269C deals with the acquisition of an immovable property, while sec. 50C allows for the value adopted by the SVA for the purpose of stamp duty to be adopted as the full market value of the consideration received by the seller of an immovable property. Therefore, the provisions of Sec. 269C cannot be read into the provisions of sec. 50C so as to make the latter section completely inoperable and redundant. (5.1) Now coming to the addition under the provisions of Sec. 50C, the valuation of a property made by the SVA for the purpose of the payment of Stamp Duty, is to be deemed to be the full value of the consideration received or accrued as a result of the transfer. The valuation of the SVA is based on the 'jantri price' of a particular area, determined and valued by the local authority and the State Government. The 'jantri price' in turn is based on several factors which are well known. Therefore, there is an element of realistic determination of the valuation and henc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the SVA and the document price was not more than 15%, no addition could be made by the AO. I am of the view that this argument of the AR is not really relevant. Section 269C deals with the acquisition of an immovable property, while section 50C allows for the value adopted by the SVA for the purpose of stamp duty to be adopted as the full value of the consideration received by the seller of an immovable property. Therefore, the provisions of sec. 269C cannot be read into provisions of section 50C so as to make the latter section completely inoperable and redundant. (6.2) Now coming to the addition under the provisions of sec. 50C, the valuation of a property made by the SVA for the purpose of the payment of Stamp Duty, is to be deemed to be the full value of the consideration received or accrued as a result of the transfer. The valuation of the SVA is based on the 'jantri price' of a particular area, determined and valued by the local authority and the State Government. The 'jantri price' in turn is based on several factors which are well known. Therefore, there is an element of realistic determination of the valuation and hence, the sale consideration, which is rooted to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6] 217 ITR 59 (Mad.); Ms. Nirmal Grover v. Appropriate Authority [1997] 223 ITR 572/[1996] 85 Taxman 488 (Bom.); Ramesh Chand Bansal v. District Magistrate [1999] 5 SCC 62; CIT v. Chandani Bhuchar [2010] 323 ITR 510/191 Taxman 142 (P H); and CIT v. Shivakami Co. (P) Ltd. [1986] 159 ITR 71/25 Taxman 80K (SC). On the other hand, the ld. D.R. supported the findings of the ld. CIT(A) while mentioning that none of the decisions referred to in the written submissions are applicable in the facts and circumstances of the case. 10. We have heard Ld. D.R. and gone through the facts of the case as also the aforesaid decisions and written submissions filed by these assessees. At the outset, we may have a look at the relevant provisions of section 50C of the Act, which read as under:- "Sec. 50C (1) Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed [or assessable] by any authority of a State Government (hereafter in this section referred to as the "stamp valuation authority") for the purpose of payment of stamp duty in respect of such transfer, the value so ado ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l asset under transfer should be either land or building or both; (ii) There is a payment of stamp duty in respect of such transfer; (iii) There is a value adopted or assessed by stamp valuation authority for the purposes of stamp duty; and (iv) The consideration received or accrued as a result of transfer of the capital asset is less than the value adopted or assessed by the stamp valuation authority; then the value so adopted or assessed by stamp valuation authority shall be deemed to be, for the purposes of s. 48, the full value of the consideration received or accruing as a result of such transfer. 10.2 In nutshell, the normal rule in the scheme of provisions of s. 50C is that where stamp duty valuation is higher than the stated consideration on transfer of land or building, the same is to be adopted for the purposes of computing capital gains. The exception is that in case the assessee can demonstrate that the fair market valuation is less than the stamp duty valuation, the fair market value is to be adopted. The safeguard is that assessee's challenge to the stamp duty valuation before the tax authorities cannot put the assessee to any disadvantage. In effect, when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 50C of the Act, before the Commissioner (Appeals) but without success. Before the ITAT, the assessee vehemently argued that section 50C of the Act is identical with the earlier omitted section 52(2), though the phraseology used by the Legislature is different. He relied on the decision of the Hon'ble Supreme Court in the case of K. P. Varghese (supra) and submitted that there was no difference between section 52(2) and section 50C so far as the objects for introduction of section 50C was concerned. It was further argued that the Assessing Officer, should have offered the matter to the valuation officer. In these circumstances, the ITAT concluded that the legislative scheme of section 52(2), omitted with effect from 1-4-1988 from the Act and section 50C, is totally different. The golden rule of interpretation of statute is to go with the plain meaning of the words used by the Legislature. The Supreme Court has already explained the object of the omitted section 52(2) and, the principle laid down by the Supreme Court in the case of K. P. Varghese (supra) cannot be applied for interpreting the section 50C, putting the burden on the revenue to establish that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e onus under the deeming provisions of sec. 50C of the Act, is on the assessee to establish the FMV of the property. As long as assessee can reasonably discharge this onus, even under the scheme of s. 50C, the consideration stated by the assessee cannot be disturbed. In this situation, especially when the assessee failed to discharge onus laid down under sec. 50C of the Act, reliance on the decision in the case of K. P. Varghese (supra) is also misplaced. 10.6 The decisions in the case of Smt. Raj Kumari Vimla Devi (supra); Dinesh Kumar Mittal's case (supra); UP Jal Nigam's case (supra); R. Damodaran's case (supra); R. Jawahar's case (supra); Ms. Nirmal Grover's case (supra); Ramesh Chand Bansal's case (supra); and Shivakami Co. (P) Ltd.'s case (supra), were not rendered in the context of provisions of sec. 50C of the Act. In Chandani Bhuchar's case (supra), Hon'ble High Court held that in the absence of any legally enforceable acceptable evidence, the valuation done for the purpose of section 50C would not represent the actual consideration passed on to the seller. We find that none of these decisions was rendered in the context of issue before us regarding applicability of prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roper. 9. The following words of Lord Denning in the matter of applying precedents have become locus classicus: "Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cordozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive." ** ** ** 'Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches else you will find yourself lost in thickets and branches. My plea is to keep the path to justice clear of obstructions which could impede it.' 10.62 In the light of aforesaid observations of the Hon'ble Apex Court, we are of the opinion that reliance by these assessees on the aforesaid decisions in the case of Smt. Raj Kumari Vimla Devi (supra); Dinesh Kumar Mittal's case (supra); UP Jal Nigam's case (supra); R. Damodaran's case (supra); R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no evidence in support of this statement has been submitted. In these circumstances, we are not inclined to interfere with the findings of the ld. CIT(A). Therefore, ground no.2 in the appeal in the case of Zunzabhai P Patel, is dismissed. 15. Ground no.3 in the appeal in the case of Zunzabhai P Patel relates to addition of Rs. 13797/-. During the course of assessment proceedings, the AO noticed that the assessee claimed long term capital loss of Rs. 44390/- on sale of row house while the cost of acquisition was reflected at 766620/-, indexed cost at Rs. 894390/- and sale price at 850000/-as on the date of sale shown as 3-6-05. However, a copy of sale deed revealed that the agreement was registered on 22nd March 05. Though the assessee pleaded that one cheque of installment amounting to Rs. 4 lacs was credited into bank account of assessee on 4th June 2005 and the assessee did not transfer the possession of said row house to the buyer until then, the AO found that the possession had already been handed over to the buyer on 16.3.05 and it was mentioned in the document that cheque no. 944075 dated 21.2.05 for Rs. 4 lakh was received by the assessee on 21.2.2005 and the entire sale ..... X X X X Extracts X X X X X X X X Extracts X X X X
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