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Dy. Commissioner of Income Tax 1 (1) , Mumbai Versus M/s Shree Aditya Finwealth Pvt. Ltd.

2016 (5) TMI 425 - ITAT MUMBAI

Sale consideration determined by Stamp Duty Authority for value determined by DVO - Held that:- We have observed that for the purpose of computation of capital gain, the full value of consideration received has to be taken based upon the actual value of sale of property which is higher than the stamp duty value in accordance with the provisions of section 50C of the Act. In this case the full value of the property is comprised of land and building amounting to ₹ 40 crores while the stamp d .....

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ant Member For the Petitioner : Shri Ramachandran For the Respondent : Shri K. Gopal ORDER Per Ramit Kochar, Accountant Member This appeal, filed by the Revenue, being ITA No. 5133/Mum/2014, is directed against the order dated 30.05.2014 passed by learned Commissioner of Income Tax (Appeals)- 1, Mumbai (hereinafter called the CIT(A) ), for the assessment year 2009-10. 2. The ground raised by the Revenue in the memo of appeal filed with the Tribunal reads as under:- 1. Whether on the facts and in .....

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usiness of textile manufacturing. During the financial year relevant to A.Y. 2009-10 the assessee company has sold a property comprising land and structures. An agreement for sale has been entered into with assessee and M/s Future Communications Ltd. on 24.12.2008 for a total consideration of ₹ 40 crores. The assessee was the owner of the premises and structures as on the date of sale agreement. The property was situated at Mohili, Village Mohili, Safed Pool, Kurla Andheri Road, Andherti ( .....

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s The assessee has declared long term capital gain on the land and short term capital gain on the structures. The A.O. made reference to the DVO for determination of the fair market value of the property in accordance with the provisions of section 55A of the Act. The DVO submitted the fair market value at ₹ 40,60,99,000/- for which the break up as under:- Value of land ₹ 38,08,30,000/- Value of structures ₹ 2,52,69,000/- The assessee was show caused as to why adverse inference .....

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eceived was much more than the stamp duty valuation. The assessee protested against the reference made to the DVO. The assessee relied upon the decision of the ITAT in the case of ITO v. Chandrakant R Patil and Others (2011) 56 DTR (Ahd) (Trib) 449 and Jayshankar S. Vaid v. DCIT (2010) 35 SOT 46 (Ahd) and submitted that reference can be made for valuation u/s 55A of the Act to ascertain the fair market value of the property and not the consideration. The assessee requested to consider the agreem .....

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n 16A(1) to(6) of the Wealth Tax applies and the A.O. can complete the assessment in conformity with the estimate of the Valuation Officer. Hence, assessment was completed after taking into consideration as assessed by the DVO. Aggrieved, the assessee filed its first appeal before the ld. CIT(A). 4. Before the ld. CIT(A), the assessee contested the addition made on this issue and submitted that for determination of fair market value of the land and structure the approved valuer was appointed and .....

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ion as contained under section 53C of the Act is met but in the instant case full value of consideration is taken higher of stamp duty valuation. The value of the structure was valued by the Government valuer. The valuation of the structure is valued after its demotion. The DVO valued after demolition was completed based upon the future value of the structure. Thus the assessee submitted that reference to section 55A to the DVO was illegal and bad in law as ascertaining the fair market value of .....

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f Jayshankar S. Vaid v. DCIT, 355 SOT 46 (Ahd) (2010). The ld. CIT(A) after considering the submission of the assessee noted that the assessee has declared LTCG of ₹ 30 crores on sale of land and STCG of ₹ 2 crores on structures as per the assessment order. The A.O. has referred the section 55A of the Act. The DVO has determined the value of land at ₹ 38,08,30,000/- and value of structure at ₹ 2,52,69,000/-. The assessee has objected to the A.O. in making the additions in .....

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rty which comprises land and structure thereon vide agreement dated 24.12.2008 for a total consideration of ₹ 40 crores while the stamp duty valuation ie ₹ 25,14,76,226/-. The income gained from the sale of land has been offered to tax as LTCG while the income from gain of building as STCG. The break up offered by the assessee is ₹ 38 crores for land and ₹ 2 crores for building. The A.O. has referred the matter to DVO whereby the value of land determined at ₹ 38,08, .....

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