TMI Blog2018 (10) TMI 365X X X X Extracts X X X X X X X X Extracts X X X X ..... on of its potential user, then it would make a distress sale qua the remaining area. None of the authorities have examined, whether the remaining area has access from the road or not. Hence, in order to ascertain fair market value as contemplated in section 50C(2), a reference ought to be made to DVO. Restore these issues to the file of AO and direct him to make a reference under section 50C(2) to the DVO for determining fair market value of the plot as on the date of sale i.e. 31.1.2012. On the basis of that report, he would work out capital gain assessable in the hands of the assessee. Hence, in order to ascertain fair market value as contemplated in section 50C(2), a reference ought to be made to DVO. We set aside both orders of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn documented sale consideration at ₹ 35.00 lakhs, whereas for the purpose of stamp duty, value determined by the Sub-Registar office, Sanand was at ₹ 79,22,449/-. The AO sought explanation of the assessee as to why value on which stamp duty was paid be not deemed as full consideration received on transfer of these two properties for the purpose of computing capital gain under section 48 of the Income Tax Act. The assessee has given reply which has been reproduced by the AO on page no.3 of the assessment order. The stand of the assessee before the AO was that, it had purchased two plots from Shri Pravinbhai D. Bhanushali bearing plot no.143/1 (1979 sq.meter) and 143/2 (894 sq.meters) situated at Sanand on 30.3.2011. It has furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.6. With regard to the addition u/s.50C of the Act, it was observed by the AO that the appellant is a limited liability partnership firm and dealing in import, export, sale and distribution of agricultural products and cattle feeds. The AO has noticed that the assessee has shown two immovable properties which are registered with the Sub-Registrar Office, Sanand. It is further noticed that the total document amount shown is of ₹ 35 lakhs as against the value determined by the Sub-Registrar at ₹ 79,22,449/-. The AO has addition of the difference of ₹ 44,22,449/- u/s.50C of the Act. During the appellate proceedings, the appellant has contended that it had purchased two plots one on 30.3.2011 and second on 23.09.2010. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of payment of stamp duty could not be adopted as sale consideration by adopting provisions of Section 50C of the Act. The facts of the case and the submissions are considered. The main contention of the appellant is that the plots purchased by it were of no use due to absence of access of road and it has to cancel the transactions and gave back the plots to the original owner. Therefore, these are not to be considered as sale and provisions of Section 50C is not applicable on such transaction. The contention of the appellant is found to be acceptable in respect of plot No.143/1 and 143/2 at Sanand purchased from Pravinbhai B. Bhanushali. The appellant has purchased this plot for a price of ₹ 10 lakhs on 30.3.2011 and same was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that there is no transfer of plot in this exercise and section 50C ought not to be applied. During the course of hearing, he produced site plan wherein geographical location of plots is being displayed. On the strength of this site plan, he contended that remaining plot nos.139/1 and 141/3+4 are concerned, they are of no use to the assessee because it has purchased the specific area including plot no.143/1 and 143/2. Once the deed for 143/1 and 143/2 stand cancelled and accepted by the ld.CIT(A), then it is to be construed that the assessee could not fetch price equivalent to the one on which stamp duty was paid. The potential of remaining plot from a big chunk had reduced the price substantially. This encumbrance ought to be considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat where the consideration received or accruing as a result of transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed by any authority for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall for the purposes of section 48, be deemed to be the full value of the consideration. In other words, full consideration mentioned in section 48 is to be replaced by the consideration on which value of the property was adopted for the purpose of payment of stamp duty. 8. Sub-Section (2) of section 50C further contemplates that in case assessee alleges that stamp duty valuation authority under sub-section (1) exceeds the fair market val ..... X X X X Extracts X X X X X X X X Extracts X X X X
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