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B.M.J. Real Estate (P) Limited Versus Commissioner of Income Tax, Ludhiana and another

2015 (12) TMI 1068 - PUNJAB AND HARYANA HIGH COURT

Computation of capital gains - adoption of FMV - Held that:- The CIT(Appeals) had applied the value determined by the stamp Valuation authorities as to be fair market value of the property on the date of transfer, against which revenue is not in appeal. Hence the value assessed in the hands of the assessee is ₹ 1.25 crores as against the value assessed by the DVO at ₹ 2.97 crores. The perusal of the grievances raised by the assessee reflects that all the grievances were against the v .....

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the said property as the assessment in the hands of the assessee has not been made on such valuation report but on a much lesser value of ₹ 1.25 crores and even if credit is given on account of all the objections raised by the assessee, the value of property adopted in the hands of the assessee is much lower than the value determined by the DVO. Hence we uphold the order the CIT (Appeals) in adopting the value assessed by the Stamp Valuation authorities as the fair market value of the pro .....

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of 75 days in refiling the appeal. For the reasons stated in the application and after hearing learned counsel for the parties, the delay in refiling the appeal is condoned. CM stands disposed of. ITA No.114 of 2015 3. This appeal has been preferred by the assessee-appellant under section 260A of the Income Tax Act, 1961 (in short, the Act) against the order dated 28.4.2014, Annexure A.6 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (in short, the Tribunal ) in ITA No.179/Chd/20 .....

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ng in possession of the tenant and being closed to cremation ground was correctly valued at ₹ 73,00,000/- (correct figure being ₹ 73,60,000/-) and not ₹ 1.25 crores? 4. A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. The return of income of ₹ 25,26,880/- was filed by the assessee on 27.11.2006 which was processed under Section 143(1) of the Act on 2.8.2007 which was later on selected for scrutiny assessment. The .....

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) upheld the order of the Assessing Officer and dismissed the appeal. The appellant went in appeal before the Tribunal. Vide order dated 30.4.2010, Annexure A.3, the Tribunal partly allowed the appeal holding that the Assessing Officer had failed to make a reference to the District Valuation Officer (DVO) and remitted the issue back to the Assessing Officer for deciding the same afresh after making reference to the DVO to ascertain the fair market value of the asset on the date of the transfer. .....

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ore the Assessing Officer. The Assessing Officer vide order dated 30.12.2011, Annexure A.4 treated the sale consideration at ₹ 2,97,98,550/-. The assessee filed appeal before the CIT(Appeals). The CIT(A) vide Annexure A.5 observed that the addition made by the Assessing Officer by adopting the sale consideration at ₹ 2,97,98,550/- was contrary to the provisions of Section 50C of the Act as the full value of consideration by the DVO could not exceed the value on which stamp duty was p .....

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ction 3 of Section 50C of the Act, it was open for the appellant to have raised objection with regard to the report of the Valuation Officer. It was also argued that the sale consideration of ₹ 73,60,000/- was the correct value whereas the sale value adopted by the CIT(A) and the Tribunal at ₹ 1,25,32,000/- was unsustainable. 7. On the other hand, learned counsel for the revenue besides supporting the impugned order submitted that the value disclosed by the assessee was ₹ 73,60 .....

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d 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 adopted or assessed or assessable shall, for the purposes of section 48, be deemed to be the full value of the consideration re .....

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or no reference has been made before any other authority, court or the High Court, the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clause (i) of sub-section (1) and sub-sections (6) and (7) of section 23A, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with necessary modi .....

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withstanding anything to the contrary contained in any other law for the time being in force, adopted or assessed, if it were referred to such authority for the purposes of the payment of stamp duty. (3) Subject to the provisions contained in sub-section (2), where the value ascertained under sub-section (2) exceeds the value adopted or assessed or assessable by the stamp valuation authority referred to in sub-section (1), the value so adopted or assessed or assessable by such authority shall be .....

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emed to be the full value of consideration received or accruing as a result of such transfer and should be adopted for the purposes of section 48 of the Act. Sub section (2) of Section 50C of the Act provides that where the assessee claimed before any Assessing Officer that the value adopted or assessed by the stamp Valuation authorities exceeds the fair market value of the property as on the date of transfer and the said value had not been disputed in any appeal or revision or no reference had .....

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d or accruing as a result of the transfer. 10. In the present case, the assessee had sold the property for an amount of ₹ 73,60,000/- and the stamp duty had been paid at the rate of ₹ 1.25 crores whereas against the said stamp duty valuation, the Valuation officer had valued the property at ₹ 2,97,98,550/-. The CIT(A) applied the value determined by the stamp valuation authorities as to be fair market value of the property on the date of transfer. Hence the value assessed in th .....

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es and even if credit is given on account of all objections raised by the assessee, the value of the property adopted in the hands of the assessee is much lower than the value determined by the DVO. The relevant findings recorded by the Tribunal read thus:- 17. In the facts of the present case the requirements of section 50C of the Act have been met with by the Assessing Officer by making reference to the Valuation Officer and in turn received valuation report of the property determining the val .....

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e had sold the said asset for an amount of ₹ 73,60,000/- and the stamp duty had been paid at the rate of ₹ 1.25 crores whereas against the said stamp duty valuation, the Valuation Officer had valued the property at ₹ 2.97 crores. The CIT(Appeals) had applied the value determined by the stamp Valuation authorities as to be fair market value of the property on the date of transfer, against which revenue is not in appeal. Hence the value assessed in the hands of the assessee is &# .....

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