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TMI Blog2018 (9) TMI 1310X X X X Extracts X X X X X X X X Extracts X X X X ..... to examine these transactions, issued notice u/s 148 of the Act on 4.5.2012 duly served upon the assessee. Necessary details as called for were filed. Apart from the additions for low gross profit as well as addition u/s 68 of the Act, addition was also made for Short Term Capital Gain computed after applying provision of Section 50C of the act at Rs. 78,04,301/-. It was contended by the assessee before the assessing officer that no addition should be made u/s 50C of the Act by way of applying the value adopted by the Stamp Valuation Authority as the alleged industrial land was a disputed land and was encroached by other persons. Due to this reason the alleged property was sold at a value less than the fair market value. But the Assessing Officer was not convinced with this statement and he without referring to the Departmental Valuation Officer for valuation of impugned land computed the Short Term Capital Gain u/s 50C of the Act and made the addition. Income was assessed at Rs. 54,59,521/- in following manner; Income shown as per computation of income Add: Short Term capital gain u/s 50C as discussed above Addition on a/c of low GP Addition on u/s 68 as discussed above Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Valuation Officer to value the alleged property. We find that the Ld.CIT(A) confirmed the addition observing as under; "8. Ground Nos. 4 & 5:- By these grounds the appellant has challenged the addition of Rs. 7804301/ - being STCG added by invoking section 50C of the Income Tax Act, 1961. The detailed facts of the case as per the assessment order are reproduced at Para No.2 above and the detailed written submissions of the appellant are reproduced at Para No.3 above. 8.1 Briefly stated the facts are that for the year under consideration the AO noted that the appellant has sold immovable properties on 24/10/2008 and 23/01/2009 for Rs. 987000/- & Rs. 658000/-. As per the sale deed the value adopted by the Stamp Valuation Authority in respect of the above properties was Rs. 5596000 / - and Rs. 3776000 / - respectively. Appellant had not shown any capital gain on the above transaction. The AO therefore asked the appellant to show cause as to why the STCG as per provision of section 50C of the Income Tax Act, 1961 of Rs. 7804301/ - not be assessed for the year under consideration. Appellant contended that provision of section 50C were not applicable as the asset was a busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TO the ITAT Mumbai Bench I 32 SOT 419 (Mumbai) has held as under:- "As per the legislative history, section 5OC was inserted in the Act by the Finance Act, 2002 with effect from 1-4-2003 and it is in the nature of special provision which is introduced in determining the full value of the consideration in case of transfer of land or building or both. The value determined or assessed by any authority of the State Government for purpose of payment of stamp duty in respect, of such registration of conveyance deed would be deemed to be full value of the consideration received or accruing as a result of such transfer. It becomes apparent that the said section specifically deals with the transfer of the 'capital asset', being land or building or both and it provides for replacing the value adopted or assessed for the purpose of stamp duty, under section 48 in place of value or sale consideration shown by the assessee. So far as section 5OC is concerned the language of the said section is so clear in respect of its intention that it is brought on the statute book by way of deeming provision in the nature of the Explanation to section 48. Moreover, it is abundantly clear from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es it clear that there is no exclusion of applicability of one fiction in a case where other fiction is applicable. As a matter of fact, there is no conflict between these two legal fictions which operate in different fields and their application in a given case simultaneously does not result in imposition of supposition on other supposition of law. The Assessing Officer thus was right in applying the provision of section 5OC to the transfer of depreciable capital assets covered by section 50 and in computing the capital gain arising from the said transfer by adopting the stamp duty valuation. [Para 20]" In the case of Assistant Commissioner of Income-tax, Co. Circle IV(3), Chennai vs. MIL Industries Ltd. 142 ITD 428 it has been held as under:- "Whether whatever may be problems suffered by an assessee, in reality those reasons cannot be permitted to go beyond scope of section 5OC _ Held, yes _ Whether, therefore, misfortunes happened to assessee or difficulties faced by assessee or matter of distress sales, etc., cannot be a ground to modify valuation - Held, yes" Considering the above facts and the legal position it is seen that the appellant company has admitted that the land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer to compute the Short Term Capital Gain. It seems that the Ld. Assessing Officer has directly resorted to impose the provisions of Section 50C without even calling for a Departmental Valuation Officer's report when the value so adopted by the Stamp Valuation authorities has been challenged by the assessee. Even when the matter came up before Ld.CIT(A), he even when having co-terminus power as that of the Assessing Officer did not refer the matter for valuation to DVO. 12. We find that similar set of facts came before us in the case of Sadhana Sharma Vs. ITO-2(4), Indore, I.T.A.No.396/Ind/97(supra) wherein we have directed the Ld.CIT(A) for examining the additional evidences and also directed him to make due reference to the DVO for valuing the impugned land, observing as follows; "8. We have heard rival contentions and perused records placed before us. The assessee, apart from challenging the addition of Short Term Capital Gain confirmed by Ld. CIT(A) has also challenged the action of Ld.CIT(A) of rejecting the assessee's application for admission of additional evidence. 9. We observe that in the instant appeal the issue relates to the adoption of market valuation as per s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n.com 109(Gujarat) holding that "it was open to the Ato consider on merits contentions raised in an appeal, on an aspect which was never before ITO and with which the assessee never agreed". 11. Coming to the facts of the instant appeal and examining them in the light of above judgments we find that the assessee failed to raise objection before the Assessing Authority about the adoption of stamp authority valuation but subsequently raised the issue before Ld. CIT(Appeals). Specific ground was also raised for admitting of additional evidence and objected the market value adopted by the Assessing Authority but Ld. CIT(A) casually brushed aside this application. We therefore in the given circumstances of the case and in the interest of justice and fair play are of the considered opinion that the Ld.CIT(A) ought to have admitted the additional evidence as it is well within his powers provided in Section 250 of the Act and should have made due references to the Departmental Valuation Officer for valuing the impugned land. We therefore accept the additional evidence and set aside all the issues raised in this appeal to the file of Ld.CIT(A) to examine the additional evidence filed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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