TMI Blog2017 (3) TMI 1827X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of stamp duty and got released the document on 16.08.2011, the assessee cannot confront the rate determined by the DRO before the Assessing Officer. Even though the Assessing Officer obtained DVO rates, which is similar to the value determined by the DRO, the Assessing Officer taken the difference in value of DRO and SRO for working out the long term capital gains and the actual difference was brought to tax. Under the above facts and circumstances, we sustain the addition made by the Assessing Officer and confirmed by the ld. CIT(A) and thus, the ground raised by the assessee is dismissed. - I.T.A. No. 2991/Mds/2016 - - - Dated:- 15-3-2017 - Shri Chandra Poojari, Accountant Member AND Shri Duvvuru RL Reddy, Judicial Member For the Appellant : Shri S. Sridhar, Advocate For the Respondent : Shri Supriyo Pal, JCIT ORDER PER DUVVURU RL REDDY, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 5, dated 29.08.2016 relevant to the assessment year 2010-11. The only effective ground raised in the appeal of the assessee is that the ld. CIT(A) has erred in confirming the addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer has referred the case to the Valuation Officer, Unit II, Valuation Cell, Chennai to ascertain the correct value of the property, who has valued the property at ₹.555/- per sq. ft. and the sale consideration at ₹.3,79,90,860/- as adopted by the Appellate Authority i.e., DRO (Stamps). Accordingly, the Assessing Officer has determined the long term capital gains and the additional capital gain of ₹.1,17,14,585/- was brought to tax. 3. The assessee carried the matter in appeal before the ld. CIT(A). After considering the submissions of the assessee, various case law, the ld. CIT(A) has sustained the addition made by the Assessing Officer by observing as under: Computation under section 50C - Valuation of property The assessee has tried to justify sale consideration mentioned in the sale deed by stating that though the area of land as per the document was 623 sq. yds. but land physically available was only 580 sq. yds. It is the further contention that due to severe vaastu defect area of 125 sq. yds. was not usable for construction purposes and the buyer has also spent an amount of ₹ 30 lakhs towards levelling and construction of retention wal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d is the actual fair market value on the relevant date. Therefore, in the absence of all these evidences, assessee's claim also cannot be accepted in toto. [Para 17]. 6.3 For the above stated reasons all the grounds of appeal of appellant with respect to reopening of assessment are dismissed and the action of the Assessing officer to reopen the assessment is upheld. 7. 50C - opportunity not given: 7.1 The Assessing officer vide letter dt.10.09.2014 asked the assessee to explain why 50C should not be invoked. The assessee filed his objection for the proposal in writing along with some documents. 7.2 Hence the ground of the appellant that the no proper opportunity was given after obtaining the valuation report from the valuation cell in the assessment proceedings is dismissed as factually not correct. 8. 50C 8.1 The assessee challenged the Stamp value adopted by the SRO and appealed before the District Revenue Officer (Stamps), Chennai. The DRO inspected the property and determined the market value of the property at Rs.S55/- per sq. ft (against the guideline value of ₹ 400/- per sq.ft. as on the date of sale) i.e. 01.06.2009. 8.2.1 In his notes of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, this case law is not applicable to the facts of the case of the appellant. 8.2.2 The AR also placed reliance on [2014] 49 taxmann.com 513 (Madras) HIGH COURT OF MADRAS, Appadurai Vijayaraghavan, v. Joint Commissioner of Income-tax (OSD), Chennai. Section 50C of the Income-tax Act, 1961 - Capital gains - Special provision for computation of full value consideration (Reference to Valuation Officer) - Assessment year 2007-08 - Whether where assessee made an objection with regard to adoption of market value under section 50C( n, Assessing Officer should have referred valuation of capital asset to Valuation Officer under section 50C(2) - Held, yes [Para 15][In favour of assessee/Matter remanded] In this case the assessee made an objection with regard to adoption of market value under section 50C(1). The Assessing Officer adopted the market value under 50C(1) without referring to valuation. Hence, this case law is not applicable to the facts of the case of the appellant. 8.3 As per the report of the Valuation Officer, Unit-Il, Valuation Cell, Income Tax Department, Chennai dt.18.01.2015 received on 19.02.2015, it is stated that: As per the details submitted/e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence has been made before any other authority, court or the High Court, the Assessing officer may refer the valuation of the capital asset to a Valuation officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clause (i) of sub-section (1) and sub-sections (6) and (7) of section 23A, sub-Section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act. In this case the assessee had already appealed to District Revenue Officer (Stamps), Chennai. The DRO inspected the property and determined the market value of the property at ₹ 555/- per sq. ft. Hence reference to valuation officer is not necessary as per section 50C(2) mentioned above. 8.5 Whether valuation can be challenged by an assessee before the Assessing Officer even though same was challenged before the Stamp Authorities and his plea has been rejected? In Jitendra Mohan Saxena 2007 (7) TMI 361 - ITAT Lucknow-B, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer by invoking section 50C is upheld. 4. On being aggrieved, the assessee is in appeal before the Tribunal. By referring to the grounds of appeal, the ld. Counsel for the assessee has vehemently argued that the provisions of section 50C of the Act has no application to the facts of the case and ought to have appreciated that there was no variation between the stated consideration and the guideline value inasmuch as ought to have appreciated that the subsequent events were wrongly applied to substitute the sale consideration in the computation of long term capital gains and pleaded that the addition made by the Assessing Officer by invoking the provisions of section 50C of the Act should be deleted. 5. On the other hand, the ld. DR strongly supported the orders of authorities below. 6. We have heard both sides, perused the materials available on record and gone through the orders of authorities below. The assessee is an advocate by profession and sold the property at Zamin Pallavaram for a consideration as shown in the document at ₹.2,80,00,000/- @ ₹.400 per sq.ft., whereas, on examination of sale document of the property, the Assessing Officer has noticed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of property on the date of transfer and that the Assessing Officer may refer the matter of valuation to the Valuation Officer of the Income Tax Department itself. Although the word used is may , the Assessing Officer has to refer the case for valuation once requested by the assessee. If the valuation by the Valuation Officer of the IT department is lower, then such lower valuation is to be adopted by the Income Tax department for the purpose of capital gains taxation under section 50C of the Act. In the present case, before confronting the fair market value adopted by the SRO as higher, the assessee has not directly approached the Assessing Officer to refer the matter before the Departmental Valuation Officer to determine the fair market value, but against the value adopted by the SRO, the assessee has appealed before another authority i.e., District Revenue Officer (Stamps), Chennai. After inspecting the property, the DRO has determined the market value of the property at ₹.555/- per sq.ft. Once the District Revenue Officer (Stamps), Chennai determined the market value of the property, the assessee cannot confront the value before the Assessing Officer nor the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 41.51 crores, therefore, any value more than that cannot be taken as sale consideration. The AO has taken sale consideration as per provisions of section 50C which is a special provision regulating full valuation of consideration in certain cases. It clearly describe that in a case where consideration received or accruing as a result of transfer by an assessee of capital asset, which inter-alia include land or building or both is less than the value adopted or assessed or assessable by any authority of a State Government (Stamp Valuation Authority) for the purpose of payment of stamp duty in respect of such transfer the value so adopted or assessed or assessable, shall for the purposes of section 48, be deemed to be full value of the consideration received or accruing as a result of such transfer. Exception is provided in subsection (2)which prescribes that in a case where assessee claims before the AO that the value adopted or assessed or assessable by the Stamp Valuation Authority exceeds the fair market value of the property as on the date of the transfer and the value so adopted or assessed by the Stamp Valuation Authority under sub-section (1) of section 50C has not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue Authorities under section 53A of the Bombay Stamp Act 1958 and disposed of the appeal filed by the assessee. Subsequently the assessee filed a Petition for revaluation before the Chief Controlling Revenue Authority, Maharashtra State, Pune against aforementioned order dated 4/8/2009 and this was registered and Miscellaneous Application of the assessee was disposed of vide order dated 6/2/2012 and the copy of this order has filed at pages 110 to 114 of the paper book. The sum and substance of the order passed by the Chief Controlling Revenue Authority, Maharashtra State, Pune is that stamp duty has been paid by other party without protest and the duty payer has not appealed to this authority at any point of time. Moreover, assessee did not file application within time limit stipulated under the law i.e. 60 days from the receipt of impugned order. Therefore, assessee does not have locus to approach the authority. The authority is not legally empowered to take any decision or give opinion when no cause of action exists under the Stamp Act for the implementation of which this authority has been created. As per provision of section 50C(2) of Income Tax Act, 1961 a mechanism for re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved ought to have approached the Authorities in the first instance. Prima facie, it does appear that it is only at the time of filing of the Revised Return of Income that the Petitioners have sought to challenge the order of adjudication and valuation by the Collector of Stamps so as to claim some tax relief in the incidence of Long Term Capital Gain Tax. 8. In light of the above, I am not inclined to exercise writ jurisdiction of this Court to interfere with the impugned order. The Petition is, therefore, dismissed. 9. The Court is informed that the Assessment Order has been passed by the Assessing Officer of the Income Tax Department and the matter is now pending before the C.I.T. It is clarified that it will be open for the C.I.T. to pass such orders as he deems appropriate with regard to the valuation of the subject property in accordance with law and the orders passed by the Stamp and this order shall not be an impediment in that regard. 7.4 Subsequently, vide order dated 15/3/2013 certain mistakes in mentioning the dates was rectified and in Para-4 reproduced above and the date correctly to be read as 04-08-2008. 7.5 In the light of aforementioned facts it can be ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
