TMI Blog2019 (6) TMI 1175X X X X Extracts X X X X X X X X Extracts X X X X ..... ake a reference to the DVO, the AO while discharging a quasi judicial function is duty bound to act fairly by giving the assessee an option to follow the course provided by law to have the valuation made by the DVO. The assessee s case stands in a much better footing as in the course of assessment proceedings, the assessee had objected to adoption of stamp duty value as the deemed sale consideration. AO should have followed the mandate of sub section (2) of section 50C of the Act by making a reference to the DVO to determine the value of the property sold. The Assessing Officer having not done so and the learned Commissioner (Appeals) also failing to rectify the error committed by the Assessing Officer, we have no hesitation in restoring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the previous year relevant to the assessment year under dispute, the assessee has sold a flat in Galaxy Heaven, JVPD Scheme, Vile Parle, Mumbai, for a declared sale consideration of ₹ 1.75 crore. After reducing the cost of acquisition of the property as on 20th February 2008 amounting to ₹ 1,54,72,963, the assessee has offered short term capital gain of ₹ 20,27,037. After calling for information from the Registrar s Office at Andheri 2, Mumbai, and examining the registered sale deed, the Assessing Officer noticed that stamp valuation authority has determined the value of the property sold for stamp duty purpose at ₹ 2,51,45,500. Therefore, he called upon the assessee to explain why short term capital gain should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n following the provision of sub section (3) of section 50C of the Act. He submitted, as per section 50C(2) of the Act, once the assessee objects to the adoption of the value determined by the stamp valuation authority, the Assessing Officer has to make a reference to the Departmental Valuation Officer (DVO) to determine the value of the property. He submitted, the Assessing Officer having not done so, the assessment order is vitiated. He submitted, the learned Commissioner (Appeals) also fell into error by upholding the action of the Assessing Officer completely ignoring the mandate of section 50C(2) of the Act. The learned Authorised Representative submitted, before the Departmental Authorities assessee had specifically stated the reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) of section 50C of the Act is not mandatory is clear from the fact that under sub section (3) of section 50C of the Act, the Assessing Officer has been empowered to adopt the value determined by the DVO only in a case where it exceeds the value determined by the stamp valuation authority. Thus, she submitted, the Assessing Officer has not committed any error by not making a reference to the DVO for determining the value of the property sold. Further, she submitted, the assessee has not furnished any supporting evidence to substantiate its claim that the declared sale consideration is actual market value of the property. Drawing our attention to the sale deed she submitted, it clearly says that the property is unencumbered. She submitted, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eated as deemed sale consideration and has to be substituted for the declared sale consideration, however, in a case where the assessee objects to adoption of stamp duty valuation, as per sub section (2) of section 50C of the Act the Assessing Officer is required to make a reference to the DVO for determining the value of the property. Now, the issue before us is, whether as per section 50C(2) of the Act, it is mandatory on the part of the Assessing Officer to make a reference to the DVO to determine the value of the property. In our view, on a careful reading of the provisions contained under section 50C of the Act and the legislative intent for enacting such a provision, it becomes clear that in a case where the assessee objects to the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he other decisions cited by the learned Authorised Representative also express similar view. In fact, the Hon ble Calcutta High Court in Sunil Kumar Agarwal v/s CIT, [2015] 372 ITR 83 (Cal.), have gone a step further to observe that valuation by the DVO is contemplated under section 50C of the Act to avoid miscarriage of justice. It was held that when the legislature has taken care to provide adequate machinery to give a fair treatment to the tax payer, there is no reason why the machinery provided by the legislature should not be used and the benefit thereof should be refused. The Hon ble Court has observed that even in a case where no request is made by the assessee to make a reference to the DVO, the Assessing Officer while discharging a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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