TMI Blog2014 (4) TMI 1086X X X X Extracts X X X X X X X X Extracts X X X X ..... MBER Appellant by: Shri S.C.Jain Respondent by: Shri Manjit Singh, DR ORDER Per SUSHMA CHOWLA, J.M. : The appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-I, Ludhiana in Appeal No.436/IT/CIT(A)-I/Ldh/2011-12 relating to assessment year 2006-07 against the order passed under section 143(3) of Income Tax Act, 1961 (in short the Act ). 2. The assessee has raised the following grounds of appeal: That the sale proceeds of the land were considered at ₹ 7360000/- and after indexation the long term capital gains arrived at ₹ 2532644/- and after adjusting loss of ₹ 5760/- the return income was ₹ 2526884/-. (a) That the sale consideration u/s 50C of the Income Tax Act was considered by the A.O in the original assessment at ₹ 12532000/- on the basis of stamp duty although the proceeds of sales was received at ₹ 7360000/-. The A.O assessed the income accordingly. (b) That the matter was referred to Valuation Officer after set aside by the ITAT and the Valuation Officer assessed the valuation of property at ₹ 29798550/- and in the appeal before the CIT(A)-I has res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned A.R. for the assessee is aggrieved by the Valuation Report prepared by the Valuation Officer as the circle rates of commercial area had been adopted to compute the value of property in the hands of the assessee and further no credit has been allowed of various factors which had affected the market value of the property. The learned A.R. for the assessee clearly conceded that whereas the property of the assessee was residential, it was situated in an area where commercial activity was being carried out. The learned A.R. for the assessee also accepted that the DVO had given concession on account of the depth and on account of proximity to cremation ground. 7. The learned D.R. for the Revenue pointed out that the Assessing Officer and Valuation Officer had met with all the objections raised by the assessee and had valued the property after considering the same. Reliance was placed on the orders of the authorities below by the learned D.R. for the Revenue. 8.We have heard the rival contentions and perused the record.In the facts of the present case, original assessment was completed under section 143 (3) of the Act vide order dated 15.12.2008 under which addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er sq yd. As per segment 0008, Item No.0250, the area in question was not residential and was fully commercial. Without prejudice to the valuation already made, the Valuation Officer noted that even if various rates and values are considered, as pointed out by the assessee vide letter dated 28.12.2011 the value of a plot in Gandhi Nagar (residential area) @Rs.3600/- per sq.yd. would work out to ₹ 1.24 crores and at G.T. Road to Chowk Dholewal (residential circle road) @ ₹ 7300/- was worked out to ₹ 2.52 crores and as per G.T. Road to Chowk Dholewal (commercial area) @ ₹ 11,000/- would work out to ₹ 3.80 crores. The Valuation Officer further reported that particular location was actually visited alongwith representative of the assessee and the area was found to be fully commercial having commercial activities. The railway line had no bad impact on the commercial activities as it had affect on the residential areas. The valuation already made at ₹ 2.97 crores was held to be correct by the Valuation Officer. The reply of the assessee to the said comments of the Valuation Officer are reproduced at pages 22 and 23 of the assessment order in which he h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asset, whereas the property in question was residential. The learned A.R. for the assessee fairly admitted that the said property was residential though situated in an area where commercial activity was being carried on. The next objection of the learned A.R. for the assessee while arguing the matter was that certain factors which were affecting the value of the property were not considered by the DVO though he had given concession on account of the low depth of the property and also on account of proximity to the cremation ground. The assessee after the conclusion of the arguments had filed written submissions and the grievance of the learned A.R. for the assessee was that the Valuation Officer had not considered various objections and documents filed before valuing the property at ₹ 2.97 crores. The objections filed by the assessee before the Valuation Officer were as under: 1. The Sub-Registrar at the time of registration has considered the property in question as residential and has taken the stamp duty rate @ ₹ 3600/- per Sq. Yds., since the property is at Gandhinagar, Ludhiana, which is residential area as mentioned in the registration deed. The rate list as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO has given details in the assessment order page 24 and rebate of ₹ 732000/- has been given on this account. 12. The grievance of the learned A.R. for the assessee was that the Valuation Officer had not considered the above facts and made the valuation of the said property as under: a) The property in question has been considered as commercial property without looking to the Registration deeds and Fard issued by the Patwari on which the property in question has been ear marked as Residential. The main difference in rates is on the part of this issue. This fact is very relevant and the complete details have been given at point no. 1 2above.TheCIT (A) has not considered these issues. These points are very important and require reconsideration, specially the point of Agreement to Sell, since this issue was taken up with the valuation officer. The complete details are given by the AO in his Assessment Order at page no. 8 to 13 and these points are very important and the same may please be referred. It is also important to mention here that the Sub-Registrar is just equal to SDM and the rates adopted by the Sub-Registrar cannot be changed by the Valuation Officer. Eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has given details in the assessment order page 24 and rebate of ₹ 732000/-hasbeen given on this account. This issue has not been considered by the CIT (A). 13. The assessee is aggrieved by the Valuation Report of the Valuation Officer in not considering various points i.e. the land being residential in area. According to the learned A.R. for the assessee the main reason for high valuation of the said property was on account of the rates of land adopted by the Valuation Officer wherein the rate for the back portion was taken at ₹ 8200/- per sq.yd. and front portion was considered at ₹ 11,000/- per sq.yd. in spite of the fact that the property was residential in nature. The other grievance of the assessee was that the whole property in question was uneven and the size of the plot was very big and it was not possible to value the property. Another aspect while valuing the property was that the said property was in possession of another person i.e. the tenant and that fact was mentioned in the agreement to sale. Other aspect affecting the value of the property was its proximity to the railway line and also cremation ground and also low line middle portion. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e property as on the date of transfer and the said value had not been disputed in any appeal or revision or no reference had been made before any authority, the Court of High Court, the Assessing Officer may refer the valuation of the capital asset to Valuation Officer, who in turn shall value the property. Sub-section (3) to section 50C of the Act provides that where the value ascertained under sub-section(2) to section 50C of the Act exceeds the value adopted or assessed by the Stamp Valuation Authorities then the value so adopted or assessed by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer. 16. In view of the provisions of the Act, it is clearly provided that where the value adopted or assessed by the Stamp Valuation Authorities is higher than the sale value shown by the person, then the value so assessed by the Stamp Valuation Authorities would be adopted as full value of consideration on the transfer of the asset under section 48 of the Act. However, where the assessee had not disputed the valuation so adopted by the Stamp Valuation Authorities and is not in appeal against the same, a recourse is available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uding the stand of DVO to have adopted commercial rates for valuing 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 of the CIT (Appeals) in adopting the value assessed by the Stamp Valuation Authorities as the fair market value of the property on the date of transfer in computing the income of the assessee. We may mention that the learned counsel for the assessee initially raised another contention that the assessee in this case had entered in to an agreement to sale with the party in Delhi at a lower consideration, against which advance was also received. Therefore, we called for the file of earlier round of litigation and found that no such contention was taken in the first round of litigation before the Tribunal. When this fact was pointed out to learned A.R. for the assessee, he fairly withdrew this contention. 18.In view thereof, we confirm the or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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