TMI Blog2016 (12) TMI 1280X X X X Extracts X X X X X X X X Extracts X X X X ..... 2005-2006, he merely accepted the petitioner’s ground. His direction, therefore, not to tax the income for the Assessment Year 2006-2007 but could be tax only for the year 2005-2006, therefore, must be seen in light of the petitioner’s own contention. The direction to adopt a correct cost of acquisition of the property was also in favour of the petitioner by accepting his contention. The further direction for obtaining DVO’s report, in any case, was a passing remark, and as noted, flowed from the provisions contained in Section 50C of the Act. We, therefore, propose no interference in such revisional order. Coming to the validity of the valuation by the DVO, the same obviously cannot be examined in a writ petition jettisoning the appeal provisions contained in the Act. Before deciding to relegate the petitioner to such appellate remedy, we had a cursory glance at such report. Contrary to what the counsel for the petitioner contended before us, the factors of the property being under litigation, there being encumbrances and tenancy was not lost sight of by the DVO. The report elaborately refers to these factors before coming to the final assessment of the valuation. Whether such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d upon the assessee to state why the valuation adopted by the Stamp Valuation Authority should not be taken as the market value of the property and the capital gain should not be worked out accordingly. The assessee opposed such stand of the Assessing Officer and contended that the property was actually sold for ₹ 7.75 crores of which his share was ₹ 2,13,50,000/-. The property was involved in litigation. Earlier there was an agreement to sale the property under which the owner had received ₹ 9.75 lakhs towards advance. The prospective purchasers defaulted and, therefore, the sale did not materialise. However, they had filed a suit for specific performance. It was further contended that the property was occupied by Border Road Task Force on rental basis. The possession of the property was not still with the owner. It was, under such circumstances, the new buyers agreed to purchase the property with all encumbrances. According to assessee, therefore, the valuation adopted by the Stamp Valuation Authority could not be substituted for the actual sale consideration received by the sellers. The assessee also pointed out that the sale deed was executed on 18.3.2005. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner passed his revisional order under Section 264 of the Act on 26.6.2009. In the order he observed that normally the property which is difficult to sell because of litigation would fetch less value than the market value. The stamp valuation is sometimes on the higher side. The assessee could not have objected to the stamp valuation because the onus to pay the duty was on the purchaser. He noted that, as per Section 50C of the Act, wherein the assessee objects to the Stamp Valuation Authority before the Assessing Officer, he has to refer the issue to the DVO. He also accepted the petitioner s stand that the question was relevant for the year 2005-2006 and not 2006-2007. In view of such background, he passed the following order. 2.5 The Assessing Officer, therefore, is directed under the powers conferred upon me u/s.264 to do the following: (i) To take the year of taxation of capital gains as assessment year 2005-06 as has been held earlier. (ii) To adopt the indexed cost of acquisition by taking the registered value as on 01.04.1981 as furnished by the assessee; and (iii) Refer the valuation of the property as on the date of transfer i.e. 18.03.2005 to the Departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder letters dated 25.11.2010 and 27.11.2010. These objections, however, were rejected by the Assessing Officer by an order dated 2.12.2010. In such order, he also clarified his stand regarding two separate sets of reasons being communicated to the petitioner and pointed out that in fact only one set of reasons were recorded. 2.9 The petitioner thereafter participated in the assessment proceedings which had commenced pursuant to the said notice dated 21.8.2009 issued by the Assessing Officer under Section 148 of the Act. During such assessment, the Assessing Officer obtained a report from the DVO as per which the fair market value of the property came to ₹ 12,27,80,380/- as on 18.3.2005 i.e. date of sale. During the course of assessment the Assessing Officer supplied the copy of report of the DVO to the assessee who raised multiple objections regarding its validity and on going assessment on the basis of such valuation. The Assessing Officer over-ruled all such objections and referred to at some length the report of the DVO for holding the value of the property on the date of sale as ₹ 12,27,80,380/- and adopted the same for the purpose of computing the assessee s ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be said to be prejudicial to the petitioner in such order. The notice for re-opening of the assessment was issued after recording valid reasons. The DVO has taken into account all relevant factors including the handicaps attached to the property. In any case, the valuation cannot be a subject matter of writ petition. The petitioner has an alternative appellate remedy which the petitioner has availed by filing appeal before the Appellate Commissioner. 5. We may first examine the petitioner s challenge to the revisional order passed by the Commissioner. We may recall, against the order of assessment dated 19.12.2008 for the Assessment Year 2006 2007, the petitioner had filed a petition before the Commissioner. In the order of assessment, the Assessing Officer had levied capital gain in hands of the petitioner by adopting the valuation of the Stamp Valuation Authority ignoring the petitioner s plea that such valuation was inaccurate, and that, in any case, the land was sold during the period of Assessment Year 2005 2006. In such background, the Commissioner substantially allowed the revision petition. He upheld the petitioner s contention that the income did not arise during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. 7. Quite part from this, we also do not see any illegality in the order of the Commissioner. In fact, the Commissioner substantially accepted the grievances of the petitioner. The petitioner s case that the income did not arise during the Assessment Year 2006 2007 but 2005-06 was accepted. As a natural corollary, the income as contended by the petitioner himself had to be accounted in the year 2005 2006. The petitioner had also contended that there could be no nil cost of acquisition, a contention which the Commissioner accepted. It is only on the background of such facts, the Commissioner also provided that the Assessing Officer would obtain a report from the DVO and adopt the valuation in such report for the purpose of computing the petitioner s capital gain. 8. This last direction has two facets. One is to obtain the DVO s report, and second is to adopt the valuation contained therein for the purpose of capital gain. 9. Section 50C of the Act pertains to special provisions for full value of consideration in certain cases. Under sub-sec.(1) of Section 50-C of the Act, where the consideration received or accruing as a result of the transfer by an assessee of a capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of the case. Therefore when the Commissioner accepted the assessee s contention that the income did not pertain to the Assessment Year 2006-2007 but pertained to Assessment Year 2005-2006, he merely accepted the petitioner s ground. His direction, therefore, not to tax the income for the Assessment Year 2006-2007 but could be tax only for the year 2005-2006, therefore, must be seen in light of the petitioner s own contention. The direction to adopt a correct cost of acquisition of the property was also in favour of the petitioner by accepting his contention. The further direction for obtaining DVO s report, in any case, was a passing remark, and as noted, flowed from the provisions contained in Section 50C of the Act. We, therefore, propose no interference in such revisional order. 12. Learned counsel Shri Shah, however, referred to the decision of the Supreme Court in case of Murlidhar Bhagwan Das reported in 52 ITR 355 in which it was observed that the Commissioner might hold that the income did not belong to the relevant year and might subsequently find that the income belonged to another year. Such a finding would not be necessary for disposal of the appeal or re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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