TMI Blog2017 (1) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... he ground that he is duty bound to go by the valuation adopted by the stamp valuation authority. Litigation in the Bombay, particularly, under the Maharashtra Rent Control Act, is well known and needs to be taken judicial notice. A property which is in the occupation of tenants for more than 60 years one cannot fetch full market value and in fact the party who purchased the property had agreed to the terms and conditions i.e. the property was purchased on “as is where is” condition with a specific clause that any further litigation will be dealt with by the purchaser and under those circumstances, generally, market value cannot be adopted. In these circumstances, the Courts time and gain held that reference u/s 50C(2) of the IT Act is mandatory and the AO having failed to follow the provisions of the Act, he should not be given one more chance to refer the matter to the DVO. Recently, the Hon’ble Supreme Court in the case of Manish Mahaeswari Vs. ACIT and another, and Indore Construction P. Ltd. Vs. CIT, [2007 (2) TMI 148 - SUPREME COURT OF INDIA] vis-à-vis the provisions of section 153C of the Act, observed that if the AO has not recorded his satisfaction for issue of notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice dated 20/06/2013 to the assessee asking her explanation as to why the value of ₹ 1,35,57,500/- adopted by the stamp valuation authority for the purpose of levying stamp duty should not be adopted for the purpose of computation of capital gains as per section 50C of the Act. The AR of the assessee, inter-alia, submitted that the consideration received by her may be adopted as fair value of the property as the entire property was occupied by the tenants for over 60 years and litigation was pending over the same. She, therefore, objected for adoption of stamp duty valuation and requested that the same may be referred to the Departmental Valuation Officer (DVO) as per section 50C of the Act, for which, she relied on the decision of the Mumbai Tribunal in the case of Ms. Nandita Kosla [2011] 11 344 (Mumbai) and Hon ble Mumbai High Court in the case of M/.s Bhatia Nagar Premises Cooperative Society Ltd. Vs. Union of India and others, [2010] 234 CTR (Bom) 175. 2.2 Referring to the provisions of section 50C(1), the AO observed that he is bound to adopt the value of the stamp valuation authority u/s 50C of the Act for the purpose of computation of capital gains and has no d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to departmental valuation officer. 2. Whether the Ld. CIT(A) has erred on facts and circumstances holding that reference to departmental valuation officer u/s 50C(2)(a) is mandatory for Assessing Officer while determining value of the property as per the provisions of section 50C ignoring that the expression used is may and shall . 3. Without prejudice to the above, the Ld. CIT(A) ought to have remanded the issue to the AO with a direction to refer valuation of the property to departmental valuation officer and decided the matter accordingly. 5. None appeared on behalf of the respondent-assessee at the time of hearing of this appeal. However, we proceed to decide the appeal after hearing the ld. DR and on merits of the case. 6. Ld. DR submitted that the CIT(A) ought to have remanded the issue to the file of the AO with a direction to refer valuation of the property to the Departmental Valuation Officer and decide the matter accordingly. He, therefore, pleaded that the matter may be remanded to the file of the AO. 7. We have carefully considered the submissions of the ld. DR and perused the material on record. We have also gone through the case law on thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te reference: It has been said that the taxes are the price that we pay for civilization. If so, it is essential that those who are entrusted with the task of calculating and realizing that price should familiarize themselves with the relevant provisions and become well-versed with the law on the subject. Any remissness on their part can only be at the cost of the national exchequer and must necessarily result in loss of revenue. At the same time, we have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi judicial controversies as it must in other spheres of human activity. Presumably bearing in mind the said principle, apart from the fact that the CIT(A) has no power to set aside the matter, he deleted the addition made by the AO for not exercising due diligence on his part i.e.; not following the mandatory provisions of section 50C(2) of the Act. The limited issue that arises for our consideration is as to whether the CIT(A) is justified in cancelling the addition ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly ₹ 450/- per month as on the date of sale have also been annexed to the sale deed. The sale deed also contains a clause that the property was sold under as is where is condition and the purchaser has agreed to acquire the same from the vendors on the same basis for a consideration of ₹ 39 lakhs. It was also explained that her father and grand father in their life time could not take possession of the property nor could get the tenants vacated. She being a lady residing at Hyderabad was neither able to look after the property or enjoy the same which forced her to sell the same in as is where is condition for a price whatever she could get. In spite of advertisement in the news papers, nobody came forward to purchase the property because of litigation. As there was a threat of property going away from her hands, she was forced to sell the same for whatever price she could get. By explaining in detail, it was stated that the property was occupied by tenants for over 60 years that litigation was pending and, thus, whatever she could obtain on sale should be treated as FMV of the said property, while, she also made a specific request to the AO to refer the matter to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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