TMI Blog2015 (7) TMI 563X X X X Extracts X X X X X X X X Extracts X X X X ..... oted, the assessee in the original grounds raised in this appeal has challenged the valuation of its property as determined by the DVO in his valuation report. In this regard, it is observed that the additional evidence in the form of letter dated 20.1.2012 issued by the General Manager, A.P. Industrial Infrastructure Corporation was filed by the assessee before the learned CIT(A), wherein it was stated that the land rate in industrial Estate, Sanath Nagar fixed by the Price Fixation Committee during February, 2006 was ₹ 3,750 per sq. metre. The said additional evidence, however, was not admitted by the learned CIT(A) mainly on the ground that the assessee had not furnished any reason whatsoever as to why the said evidence was not filed before the Assessing Officer. As submitted by the learned counsel for the assessee in this regard, the said evidence in the form of letter dated 20.1.2012 was obtained by the assessee only after the completion of assessment by the Assessing Officer on 30.12.2011 and since the same was not available at the relevant time, it could not be filed before the Assessing Officer. Keeping in this submission made by the learned counsel for the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer on 30.4.2010 reopening the assessment after recording the reasons. In reply, a letter dated 07.6.2010 was filed by the assessee requesting the Assessing Officer to treat the original return filed by it on 28.7.2006 as the return filed in response to the notice under S.148. During the course of re-assessment proceedings, the assessee was called upon by the Assessing Officer to explain as to why the market value of the property as taken by the Stamp Valuation Authority at ₹ 11,34,93,000 should not be taken as the sale consideration in place of the lower consideration of ₹ 9,06,00,000 shown in the agreement, for the purposes of computation of capital gains in accordance with the provisions of S.50C of the Act. In reply, it was submitted by the assessee that the value adopted by the Stamp Valuation Authority is excessive and the same being more than the fair market value, a reference may be made for valuation of the property to the DVO. Accordingly, a reference was made by the Assessing Officer to the DVO, who submitted his valuation report on 27.12.2011 determining the value of the property sold by the assessee at ₹ 15,99,81,400 The valuation report of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is the fair market value at that time even though Registration Authority Value is ₹ 8,01,57,000/. Hence it is evident from this transaction Registration Authority value is more than fair market value. In the same way it is at the time of sale of property also. In this regard our honorable request to the Honorable g Officer to consider the facts of the case. That the fair market value of the property in that Industries Area below the Registration Authority Value and our sale consideration is at fair market value. So kindly adopt the sale consideration value in calculation the capital gain tax and complete the Assessment. 3. The Assessing Officer did not find merit in the above objections raised by the assessee. According to him, the stand of the assessee that the difference that existed at the time of purchase between the purchase price and the valuation as per the registering authority has existed even at the time of sale also had no basis. He held that the property of the assessee over a period of time had gained much commercial value and as per the specific provisions contained in S.50C the value adopted by the Stamp Valuation authority was required to be take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted by the affidavits of the concerned persons, we are satisfied that there was a sufficient cause for the delay in filing the present appeal by the assessee, and this position is not disputed even by the Learned Departmental Representative. The delay in filing this appeal on the part of the assessee is, therefore, condoned and we now proceed to dispose of the same on merits. 6. In the original grounds raised in this appeal, the assessee has raised various issues challenging the valuation of its property as determined by the DVO. During the course of appellate proceedings before the Tribunal, the assessee has filed an applications seeking admission of the following additional grounds- 1. It is contended that provisions of 50C are inapplicable to the facts of the appellant s case in as much as the said section has no application to bona fide, genuine and honest transaction entered into between the parties. 2. On the facts on record, it is not the case of the revenue that any consideration is paid over and above the sale consideration shown in the sale deed. Hence it is contended that the provisions of section 50C are inapplicable to the appellant s case. 3. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , unless there is understatement of the consideration in respect of the transfer and the burden of showing that there is such understatement is on the Revenue. It was also held that under Entry 82 List 1 of Seventh Schedule of the Constitution, tax can be imposed on income other than agricultural income and the Parliament cannot choose to tax as income an item which, in no rational sense, can be regarded as a citizen s income or even a receipt. The learned counsel for the assessee submitted that S.52(2) creates a fiction similar to S.50C and therefore, the of S.50C can be invoked only when the Revenue has brought on record something to show that there is understatement of the consideration in respect of the transfer or in other words, the consideration actually received by the assessee is more than what is declared or disclosed by him, as held by the Hon'ble Supreme Court in the case of K.P.Varghese (supra). 10. The learned counsel for the assessee also relied on other caselaws wherein a similar view, as expressed by the Hon'ble Supreme Court in the case of K.P.Varghese (supra), was taken in the context of the proviso to S.12B(2) of the Indian Income-tax Act, 1922. He al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Indian Income-tax Act, 1922 and S.52(2) of the Income Tax Act,1961 cannot be applied in the context of S.50C. He contended that the position on this issue has entirely changed after the insertion of S.50C in the statute and if the contention of learned counsel for the assessee is accepted, the very purpose of S.50C will be defeated, rendering the said provision redundant. 13. As regards the decision of the Hon'ble Punjab and Haryana High Court in the case of CIT V/s. Chandani Bhochar (supra), cited by the learned counsel for the assessee, the Learned Departmental Representative submitted that the same is rendered in the case of a purchaser of the property, while applying the provisions of S.69B for making the addition on account of unexplained investment by relying on the value of the asset determined for the purpose of paying stamp duty, and the same, therefore, cannot be applied in the present case, where the assessee is the seller and the issue is relating to the computation of capital gains by applying the provisions of S.50C. 14. We have considered the rival submissions and also perused the relevant material on record. In the present case, the capital gain arisin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve that the transfer was effected with the object of avoidance or reduction of the liability of the assessee under section 45, the full value of the consideration for the transfer shall, with the previous approval of Inspecting Assistant Commissioner, be taken to be the fair market value of the capital asset on the date of the transfer. (2) Without prejudice to the provisions of sub-section (1), if in the opinion of the Income-tax officer the fair market value of a capital asset transferred by an assessee as on the date of the transfer exceeds the full value of the consideration d d by the assessee in respect of the transfer of such capital assets by an amount of not less than fifteen per cent of the value red, the full value of the consideration for such capital asset shall, with the previous approval of the Inspecting Assistant Commissioner, be taken to be its fair market value on the date of its transfer. (Empha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessed by any authority of a State Government (hereinafter 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 adopted or assessed shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer. 15. Although the learned counsel for the assessee has contended that since S.52(2) as well as proviso to S.12B(2) creates a deeming fiction similar to S.50C, the ratio of the decisions rendered in the context of S.52(2) and the proviso to S.12B(2) is applicable even in the context of S.50C, the comparative reading of the relevant provisions clearly shows that the Assessing Officer, for invoking the provision of S.52(2) as well as the proviso to S.12B(2) was required to have a reason to believe that the transfer was effected by the assessee with the object of avoidance or reduction of the tax liability, by understating the sale consideration of the capital asset sold, and keeping in view this specific requirement and the object of the relevant provisions of S.52(2) as well as proviso to S.12B(2), it was held by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses Cooperative Society Ltd. V/s. Union of India and others (334 ITR 145) before the Hon'ble Bombay High Court. It was contende on behalf of the assessee in this regard that the power of Central Legislature to tax on capital gain arises under Entry 82 List 1 of Schedule VII of the Constitution of India and although the word income has to be interpreted in a liberal sense, the amount sought to be taxed must bear a reasonable relation to the concept of income. It was contended that the meaning of income under S.50C is therefore, beyond what is stipulated under Entry 82 List 1 Schedule VII of the Constitution. This contention of the assessee, however, was not accepted by the Hon'ble Bombay High Court as well as the Hon'ble Madras High Court by relying on the decision of the Hon'ble Supreme Court in the case of Union of India V/s. A.Sanyasi Rao and Others (219 ITR 330) wherein it was held that there is a clear distinction between the subject matter of tax and the standard by which the amount of tax is measured. Explaining further, it was observed by the Hon'ble Supreme Court in the case of A.Sansyasi Rao and Others (supra) that having regard to the past difficul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the preliminary issue raised by the assessee in this appeal, contending that the Assessing Officer, for invoking the provisions of S.50C, has to bring something on record to show that the consideration has been understated by the assessee, and that the assessee has actually received more than what is declared by him. The additional grounds raised by the assessee are accordingly dismissed. 19. As already noted, the assessee in the original grounds raised in this appeal has challenged the valuation of its property as determined by the DVO in his valuation report. In this regard, it is observed that the additional evidence in the form of letter dated 20.1.2012 issued by the General Manager, A.P. Industrial Infrastructure Corporation was filed by the assessee before the learned CIT(A), wherein it was stated that the land rate in industrial Estate, Sanath Nagar fixed by the Price Fixation Committee during February, 2006 was ₹ 3,750 per sq. metre. The said additional evidence, however, was not admitted by the learned CIT(A) mainly on the ground that the assessee had not furnished any reason whatsoever as to why the said evidence was not filed before the Assessing Officer. As sub ..... X X X X Extracts X X X X X X X X Extracts X X X X
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