TMI Blog2018 (12) TMI 1551X X X X Extracts X X X X X X X X Extracts X X X X ..... 2)(vii)(b) clause (ii) of the Act. For fair market value of the assets it is an admitted fact that neither of the lower authorities made any reference to the DVO. Section 56 first proviso make it clear that where the stamp duty of immovable property is disputed on grounds mentioned in sec. 50C(2), the Assessing Officer’s may refer such a valuation to the DVO. Hon'ble jurisdictional high court’s decision in Sunil Kumar Agarwal vs. CIT [2014 (6) TMI 13 - CALCUTTA HIGH COURT] holds that a reference u/s 50C has to be mandatorily made even if the assessee concerned fails to make such request therefore apply the said ratio mutatis mutandis in light of proviso hereinabove to restore the fair market value issue back to the Assessing Officer for afresh adjudication after making necessary reference to the DVO as per law.- Assessee’s appeal is partly allowed for statistical purposes . - ITA No.869/Kol/2018 - - - Dated:- 5-10-2018 - Shri S.S, Godara, Judicial Member For the Appellant : None For the Respondent : Shri Dilip Kumar Mitra, Addl. CIT-DR ORDER This assessee s appeal for assessment year 2014-15, arises against the Commissioner of Income-tax (Appeals)-6, Kolkat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) of the Act which basically deal exceeding a specified limit amended from item to time. These provision were brought in to effect to tax gifted sum subject to certain terms and condition after gift tax was dropped with effect from 30th September, 1998. Therefore, whole purpose was to tax the transfer of money under the guise of gift. In support of the above, it may please be noted that the language used in the said section is where an individual or HUF receives in any previous year The legislature would have used the term as a result of transfer as has been used in the provisions of section 50C and section 43CA of the Act, had there been any intention on their part to tax the excess of stamp duty value over actual consideration in the hand of recipient even in case of sale of Immovable property. Therefore, they have not intended to tax the said difference in the hand of transferee in case of sale by conveyance deed and only purpose was to tax in case of gift. Now, if you kindly view specifically the provisions of section 56(2)(vii) enacted with effect from 1st October 2009 which are read as under. Where an individual or HUF receives in any previous year from any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of gift/deemed gift into the income Tax Act after the abolition of Gift Tax Act an since the gift tax used to affect largely to individual and HUF, the applicability of this provision has also been restricted to individual and HUF only. Sir, further, the provisions of section 56(2)(vii)(b)(ii) is a deeming provision for the purpose of brining to tax the difference between stamp duty value and actual consideration mentioned in the conveyance deed as income from other source and in absence of any legally acceptable evidence the circle value adopted by the state agency for the purpose of stamp duty would not I cannot substitute the actual sale consideration passed to the seller by the buyer. The assessee has duly disclosed the cost of property purchased as per consideration paid by him to the seller. Therefore, the assessee has discharged is burden of proving purchase consideration a per sale deed. Now the AO was obliged to bring on record the positive evidence supporting the price assessed by the competent authority of state govt for the purpose of stamp duty. In the impugned case the AO has failed to do so and arbitrarily adapted stamp duty value and illegally added of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Calcutta High Court) (2014) 226 Taxman. Sec. 50C: If the stamp duty valuation is higher than the consideration received, the AO must refer the valuation to the AO even if there is no request by the assessee. The assessee sold a piece of land for ₹ 10 Lakhs and offered capital gains. However, the AO, CIT(A) Tribunal held that as the market value of the land was assessed by the District Sub Registrar at ₹ 35 Lakhs for stamp duty purposes, which was duly paid by the buyer, the consideration had to be taken at that figure U/s 50C. On appeal by the assessee to the High Court HELD allowing the appeal: No inference can be made that the assessee has accepted the price fixed by the District Sub Registrar for stamp duty purposes as the fair market value of the property. The legislature did not intend that the capital gain should be fixed merely on the basis of the valuation to be made by the District Subs Registrar for purpose of stamp duty. The legislature has taken care to provide adequate machinery to give a fair treatment to the citizen/taxpayer. There is no reason why the machinery provided by the legislature should not be used and the benefit thereof should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant s contention. The law in such respect is very clear and applies to both type transactions i.e. whether no consideration involved i.e. gift transactions and also to t ran where consideration is involved but consideration is lesser than the fair market value. Fair market value in such respect has been bench marked to the stamp duty value and in the case of the appellant the F.M.V. of the impugned property is higher than the consideration so mentioned in the Conveyance Deed and hence, the appellant s contention in such respect stand rejected. Hence, the only ground of the appellant is rejected. 3. Some key facts emerge from the above detailed lower appellate findings. There is no dispute about the assessee having purchased four immovable properties involving less than stamp value(es) rate(s) to the tune of ₹6,60,962/-. He raised various legal arguments before the CIT(A) which rejected. I find that sec.56(2)(vii)(b) is applicable in case of an individual or an HUF receiving any immovable property having stamp value exceeding ₹50,000/- rupees without consideration or such a consideration to be less than stamp price of the property by an amount exceeding ₹50,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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