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Smt. Sudha Jain Versus The ITO-6 (3) , Aaykar Bhawan, Jhansi

2016 (6) TMI 36 - ITAT AGRA

Non referring the valuation of the property sold during the year to the D.V.O for determining its true value for the purpose of computation of capital gain as per the provision of section 50C(1) and (2) - Held that:- AR submitted that the market value of the impugned property is less than what is assumed by the authorities below. Ld. AR contended that the impugned land was agricultural when sold by the assessee and it was only later on that it was converted to residential. Moreover Ld. AR stated .....

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value as consideration for the purpose of calculation capital gains from the sale of land all along. In view of the same and in the interest of justice we consider it fit to restore the matter back to the file of the AO for reconsidering the claim of the assesee challenging the stamp duty valuation and further direct the AO to refer the matter to the D.V.O as prescribed under section 50C(2) of the Act. We direct that the assessee be given full opportunity to adduce all evidence in support of its .....

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I, Agra dt. 12/12/2013. 2. The assessee has raised the following grounds of appeal: 1.That the Ld. CIT(A)-II, Agra has erred in law and on facts in treating the land under consideration as a residential land and not an agricultural land and adopting the valuation done for the payment of stamp duty, as (deemed) full consideration instead of apparent consideration instead of apparent consideration as per deed. 2. That the Ld. CIT(A)-II, Agra has erred in law and on facts in ignoring the mandatory .....

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, Agra has erred in law and on facts in ignoring the provision of clause (a) of section 54F of Income Tax Act, 1961, which stated that if the cost of new asset is not less than the net consideration of original asset, the Capital Gain shall not be charged under section 45. of Income Tax Act, 1961. 5. That CIT(A)-II, Agra has erred in law and on facts by misinterpreting the provision of section 50C(1) of Income Tax Act, 1961 and invoking the same for the purpose of Section 54F of the I.T. Act, 19 .....

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he assessment order (because the Notice dated 23.12.2011, referred to by the Assessing Officer was for A.Y. 2007-08 and not for A.Y. 2009-10) therefore, the appellant was prevented by reasonable and sufficient cause in not explaining full and correct facts before the Ld. AO and for this reason along the assessment is liable to be quashed. 3. Briefly stated return showing total income of ₹ 3,67,278/- was filed by the assesee for the impugned AY. During the course of assessment proceeding it .....

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tal gain of the assessee by substituting the sale consideration received by the assessee of ₹ 19,60,000/- by the stamp duty valuation of the property at ₹ 60,40,000/- and further after allowing deduction under section 54EC of ₹ 16,00,000/-. The long term capital gain earned by the assessee was therefore calculated at ₹ 46,00,424/-. Further during assessment proceeding the assessee had claimed deduction under section 54B of ₹ 3,36,300/- and under section 54F of ͅ .....

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) for computation of long term capital gain and also the denial of deduction under section 54F. Ld. CIT(A) vide his order dt. 12/12/2013 upheld the order of the AO on the issue of application of provision of Section 50C(1). While on the issue regarding allowability of deduction under section 54F, part relief to the extent of ₹ 4,59,216/- was granted to the assessee subject to certain verification to be made by the AO. 4. Aggrieved by the same the assessee filed the present appeal before us .....

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ent proceedings, the assessee was not given adequate opportunity of hearing and the order was passed within a week of raising the issue before the assessee. Ld. Counsel further stated that during appellate proceedings ample evidences were adduced before the Ld. CIT(A)against the adoption of the stamp duty value of the property Ld. Counsel also filed additional evidence before us to show that the property was in dispute. Alternatively Ld. Counsel for the assessee stated that where assessee has cl .....

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Ld. Counsel relied upon the order of the Calcutta High Court in the case of Sunil Kumar Agarwal Vs. CIT in G.A. No. 3686 of 2013 in support of his aforestated argument. 7. Ld. DR on the other hand stated that the assessee had accepted substitution of the stamp duty valuation as the value of consideration for the purpose of calculating capital gain, during the assessment proceeding and therefore it was debarred from claiming otherwise. Ld. DR referred to the show cause notice issued to the assess .....

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ssee accepted the stamp duty value of the land sold to be taken as a sale consideration for the purpose of calculating the capital gain earned. Ld. DR therefore stated that the assessee could not now claim that he had disputed the adoption of the stamp duty valuation of the property during the assessment proceeding. Ld. DR therefore stated that there was no case for the provision of section 50C(2) to come into play in the present case and the Ld. Counsel for the assessee was wrong in stating tha .....

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e of calculating capital gain on the sale of the land was taken at ₹ 19,60,000/- and the assessee had not substituted the stamp duty value of the property for the purpose of calculating the capital gain earned as provided by section 50C of the Act . The sole issue arising before us is regarding the applicability of the provision of section 50C(2) in the facts of the present case. The provision of section 50C is a special provision for determining the value of consideration for the purpose .....

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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 received or accruing as a result of such transfer. (2) Without prejudice to the provisions of sub-section (1), where- (a) the assessee claims before any Assessing Officer that the value adopted or assessed or assessable by the stamp valuation authority under sub-section (1) exceeds the fair .....

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e (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 modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act. Explanation 1. For the purpose of this section, Valuation Officer shall have the same meaning as in clause (r) of section 2 .....

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d or building or both capital gain is to computed by taking the value adopted for stamp duty purposes as the consideration received in case it is more than the actual consideration received. An exception to this proposition is provided in sub-section 2 where if the assessee believes that the stamp duty value so adopted exceeds the fair market value of the property, he can make this claim before the AO and in such circumstances the AO then has to be refer the matter to a valuation officer. To dec .....

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or substituting the stamp duty valuation of the property at ₹ 60,40,000/- as per the provision of section 50C, in response to which the assesee vide her letter dt. 27/12/2011 filed a fresh calculation of capital gain, reproduced at page no. 27 of the CIT(A) order by taking the stamp duty valuation of the property. Thereafter assessment order was passed on 30/12/2011. Thus within a span of 7 days and after giving the assessee only one opportunity the assessment was framed by taking the stam .....

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so contended before the Ld. CIT(A) that the land was agricultural as per the records of Nagar Nigam Jhansi and its valuation as confirmed by the ADM (Finance & Revenue) for stamp valuation purposes was not more than 19.60 lacs . Necessary evidences as reproduced at PB 41-44 & 45-55 were filed before the Ld. CIT(A). During appellate proceedings a remand report on the above evidence was called for by the Ld. CIT(A) from the AO who submitted a letter from the Asst. Town Planner Jhansi dt. 1 .....

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in challenged the valuation adopted by the AO. It is amply clear from the above that even before the Ld. CIT(A) the assesee had not accepted the stamp duty valuation adopted by the AO. 10. Before us Ld. AR submitted that the market value of the impugned property is less than what is assumed by the authorities below. Ld. AR contended that the impugned land was agricultural when sold by the assessee and it was only later on that it was converted to residential. Moreover Ld. AR stated that the land .....

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