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2015 (9) TMI 1227 - ITAT DELHI

2015 (9) TMI 1227 - ITAT DELHI - TMI - Addition made on the basis of circle rate u/s. 50C - Held that:- In, the facts and circumstances of the present case attracts the provisions of section 50C(2) of the I.T. Act, 1961, because the assessee has made the objection for invoking the provisions of section 50C(1) of the Act and the AO had not referred the Valuation Report to the DVO, as per provisions of section 50C(2) of the I.T. Act, 1961 and without doing so, the AO had made the addition in dispu .....

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MADRAS HIGH COURT ) set aside the matter in dispute to the file of the AO to work out the capital gain by invoking the provisions of section 50C(2) of the I.T. Act., after providing adequate opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes. - ITA No. 3412/Del/2014 - Dated:- 8-7-2015 - H. S. Sidhu, JM, J. For the Appellant : Shri Akhilesh Kumar, Adv For the Respondent : Shri Robin Rawal, Sr DR ORDER Per H. S. Sidhu, JM. This appeal by the Assess .....

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de ld. CIT(A) failed to consider the specific instances placed by the assessee in support of Market rate being lower than circle rate and on the other hand failed to admit the valuation report in terms of rule 46A, hence order is arbitrary. (iii) Because, Ld. CIT(A) grossly erred in holding that, it is not mandatory for AO refer the matter (dispute about market value) to DVO in terms of section 50C(2) of the Act and the same could have been so referred only when assessee would have filed Valuer& .....

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AO to refer matter to the DVO with proper opportunity of being heard to assessee. 3. The assessee filed its return of income on 30.9.2008 declaring NIL income. The AO selected the case of assessee for scrutiny. Notice under section 143(2) of the I.T. Act, 1961 (hereinafter called "the Act") was issued on 18.9.2009 which was served upon the assessee. However, notice u/s. 143(2)1/42(1) of the Act were issued to the assessee and in compliance of the same, Authorised Representative of the .....

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s sold various plots for a sale consideration of ₹ 20,01,800/-, but the Circle Rate of the plot was ₹ 35,68,000/-. The AO asked the assessee why section 50C of the I.T. Act should not be applied in the case of the plots sold by the assessee company in the year under consideration. In response to the same, the assessee filed reply dated 20.12.2010 and stated that the rate adopted by the AO is higher than the prevailing market rate in the area. As a proof of prevailing market rate, ass .....

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pt the contention of the assessee and applied the provisions of section 50C of the I.T. Act in the case of the assessee and added ₹ 15,66,220/- the difference in consideration accruing, as a result of transfer of capital assets and the value adopted by the stamp valuation authority to be the full consideration received by the assessee as a result such transfer as income of the assessee vide order dated 30.12.2010 passed u/s. 143(3) of the I.T. Act. 4. Aggrieved with the same, assessee file .....

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(2) of the I.T. Act, because the assessee have filed Valuation Report before the AO and the AO has passed the assessment order contrary to the provisions of law. Similarly, Ld. CIT(A) had also upheld the same by dismissing the Appeal filed by the assessee. He requested that the matter may be sent back to the AO with the direction to refer the matter for valuation to the DVO and thereafter decide the issue in dispute Denovo and pass a speaking order. In support of his contention, he cited the fol .....

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eard both the parties and perused the records available with me, especially the provisions of section 50C and 50C(2) of the I.T. Act, 1961. I have also perused the copies of the judgments relied by the assessee's counsel referred mentioned in para 6 of this order as aforesaid. 8.1 For the sake of convenience, the relevant provisions of section 50C and 50C(2) of the Income Tax Act, 1961 are reproduced as under:- "50C(1) Where the consideration received or accruing as a result of the tran .....

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to the provisions of sub0section (1) where (a) the assessee claims before any AO that the value adopted or assessed by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer; (b) the value so adopted or assessed by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court, The Assessing Officer may refer .....

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n (1) of section 16A of that Act." 8.2 Keeping in view of the aforesaid provisions of law, I am of the considered opinion that the assessee has dispute before the AO the value adopted by the Stamp Valuation Authority. In view of the aforesaid provisions of section 50C(2) of the I.T. Act as well as the following citations relied upon by the ld. Counsel of the assessee mentioned at para 6.3 of the this order, I am of the considered opinion that where the assessee has claimed before the AO tha .....

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he circle rate declared by the Registration Authority and also mentioned that the sale consideration so received has been adopted by the assessee for taxation purpose for which provisions of section 50C should not be adopted in the case of the assessee, as per the provisions of section 50C(2) of the I.T. Act. But the AO has rejected the contention of the assessee and made the additions on the basis by applying the provisions of section 50C of the Act. Similarly, before the Ld. CIT(A) assessee ha .....

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f Rule 46A of the I.T. Rules, 1962. The evidence filed by the assessee is very much relevant for the proper decision on the issue in dispute. Secondly, as per the provisions of section 50C(2) of the I.T. Act, as reproduced above, when the assessee made claim before the AO that the value adopted or assessed by the Stamp Valuation Authority was higher than the fair market value of the property and this is also not disputed by the assessee in appeal or should have been or otherwise to any other aut .....

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