TMI Blog2015 (1) TMI 1479X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the DVO. Since the difference was nominal, CIT(A) has directed the Assessing Officer to adopt the sale consideration declared by the assessee. In this direction also, we do not find any infirmity or illegality. We, therefore, having agreed with the order of the ld. CIT(A), confirm his order. -Decided against revenue. - ITA No.290/LKW/2013 - - - Dated:- 23-1-2015 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER Appellant by: Shri. K. C. Meena, D.R. Respondent by: Shri. J. J. Mehrotra, C.A. ORDER PER SUNIL KUMAR YADAV: This appeal is preferred by the Revenue against the order of the ld. CIT(A), inter alia, on various grounds, which are as under:- 1. The Commissioner of Income-tax (Appeal) has erred in law and on facts of the case in deleting the addition made by the A.O. of Rs.61,14,377/- u/s 50C(1) Of the Income-tax Act, 1961. 2. The Ld. CIT(A) failed to appreciate the fact that the assessee has never claimed during the assessment proceedings that the value adopted or assessed or assessable by the stamp valuation authority exceeded the fair market value of land in order to require a reference for valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orwarded the valuation report of the DVO dated 30.3.2010 to the ld. CIT(A) and as per DVO's report, the fair market value was determined at Rs.1,58,90,358/-. In the light of the DVO's report, the ld. CIT(A) has observed that the difference in sale consideration adopted by the assessee and determined by the DVO is Rs.18,90,358/-, which is approximately 11.9% of the value estimated by the DVO. Since the difference was nominal, the ld. CIT(A) directed the Assessing Officer to adopt the actual sale consideration for the purpose of computing the capital gain. 6. Aggrieved, the Revenue has preferred an appeal before the Tribunal with the submission that before the Assessing Officer assessee has not raised a dispute with regard to the valuation adopted for the purpose of stamp duty, therefore, reference to the DVO cannot be made and the Assessing Officer has rightly adopted the valuation taken for stamp duty purpose as sale consideration and computed the capital gain. Therefore, there is no error in the assessment order. 7. The ld. counsel for the assessee, on the other hand, has submitted that before the Assessing Officer assessee has taken a plea that the land was used for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of section 50C(2) of the Act, but the Assessing Officer did not make compliance of the provisions of the Act and he has adopted the valuation declared for the purpose of stamp duty as sale consideration for computing the capital gain; whereas the ld. CIT(A) has appreciated the facts and directed the Assessing Officer to make reference to the DVO. Consequently reference has been made and the DVO has estimated the fair market value of the property at Rs.1,58,90,358/- which is less than the valuation adopted for the purpose of stamp duty. These facts clearly demonstrate that there was substance in the objections of the assessee raised before the Assessing Officer with regard to the valuation to be adopted as sale consideration. 10. We have also carefully examined the order of the ld. CIT(A) and we find that the ld. CIT(A) has taken into account the sale consideration mentioned in the sale deed and fair market value determined by the DVO. Having noted that the difference between the valuation declared and fair market value estimated by the DVO is insignificant, the ld. CIT(A) has directed the Assessing Officer to adopt the sale consideration declared by the assessee for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer under sub-section (1) of section 16A of that Act. Explanation I.--for the purposes of this section, Valuation Officer shall have the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957). Explanation 2.--For the purposes of this section, the expression assessable means the price which the stamp valuation authority would have, notwithstanding anything to the contrary contained in any other law for the time being in force, adopted or assessed, if it were referred to such authority for the purposes of the payment of stamp duty. (3) Subject to the provisions contained in sub-section (2), where the value ascertained under sub-section (2) exceeds the value adopted or assessed 93 [or assessable] by the stamp valuation authority referred to in sub section (1), the value so adopted or assessed 93 [or assessable] by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer. 4(8)(ii) Evidently, section 50C of the Act in simple terms says that the value taken for stamp duty by State registration Authority shall be considered deemed sale consideration. There is solace for assessee under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substantial justice and technical consideration were pitted against each other, the cause of substantial justice deserved to be preferred. It also needs to be mentioned here that in the case of Meghraj Baid vs. ITO (2008) 114 TTJ (Jd) 841 : (2008) 4 DTR (Jd)(Trib) 509 the Tribunal held that the word 'may' used in sub-s. (2) of s. 50C signified that in case the AO was not satisfied with the explanation of the assessee, he 'should' refer the -matter to the DVO. In other words, the Tribunal was of the view that 'may' be read as 'should' 4(8)(iv) Similar observations have been recorded by Hon'ble ITAT, Delhi in the case of ITO Vs Manju Rani Jain 24 SOT 24 and Hon'ble ITAT, Mumbai in the case of Ajmal Fragrance and Fashions (P) Ltd., Vs ACIT 34 SOT 57. It was observed that denial of such request or ignoring of such objection of the assessee against the value adopted by the Stamp Valuation Authority by the AO is against the spirit of legislation under the provisions of section 50C of the Act. Further, it has been held in N. Meenakshi 226 CTR 625 (Mad.) that k once the assessee applies to AO for making reference to DVO under section 50C of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26,10.2009 to make a reference to the DVO for ascertaining the fair market value of the property. The AO has forwarded the valuation report of the DVO dated 30.03.2010 through his letter dated 11.11.2010. The OVO has valued the fair market value at Rs.1,58,90,358/-. It would therefore suffice to record the values as under- Sale consideration Rs. 1,40,00,000/- Value as per Registered Valuer of appellant Rs. 1,39,28,000/- Value for the purpose of stamp duty Rs.2,01,14,377/- Value as per DVO Rs. 1,58,90,358/- The issue now is the value which has to be adopted for the purpose of section 50C of the Act. 4(10) The appellant in its submissions has stated that there are certain aspects which have still not been fully appreciated by the DVO in his report. The appellant contends that the value of the property would be lower than that estimated by the DVO because of the following factors. Owing to the 10 meter depth on road side to be given for widening, approximately 1,110 square meter area is un- utilizable. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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