TMI Blog2024 (2) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... to the District Valuation Officer (DVO) for determining of the FMV of the property as on the date of transfer. Thus as there were justifiable reasons for the assessee in not participating in the course of the proceedings before the A.O, as a result whereof, there was no occasion for him to have sought a reference to the DVO for determination of FMV of the property under consideration. The assessee had in the facts/submissions filed before the CIT(Appeals) categorically stated that as property under consideration was wall locked land located in between constructed buildings belonging to third parties with no independent access/approach road, therefore, for the said reason the said property was sold at a distress value of Rs. 3.50 lacs. Assessee has specifically brought to the notice of the CIT(Appeals) the locational disadvantages of his property, therefore the latter in exercise of powers vested with him which are co-terminus with that of the A.O ought to have considered the said material aspect and should have called for a remand report with a direction to the A.O to make a reference to the Valuation Cell for determining the FMV of the aforesaid property in question. Thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e addition in an ex-parte order without providing sufficient opportunity of being heard to the assessee and thereby violating the principles of natural justice. Hence, the impugned order passed by the Learned CIT (Appeal) is liable to be declared as illegal and bad-in-law. It is prayed that the order passed by the Learned CIT (Appeal) may kindly be declared as illegal and bad-in-law on account of violation of principles of natural justice. 4 The Appellant craves leave to add, amend, alter vary and / or withdraw any or all the above grounds of Appeal. 2. As the assessee had failed to file his return of income u/s. 139(1) of the Act for the year under consideration, i.e. A.Y.2013-14, therefore, the A.O initiated proceedings u/s. 147 of the Act. Notice u/s. 148 of the Act dated 04.12.2017 was issued to the assessee. 3. During the course of the assessment proceedings, the A.O gathered information that the assessee had sold an immovable property, Khasra No. 125/1 situated at Devnandan Nagar, Ward No.42, District: Bilaspur (admeasuring 3900 sq. ft.) for sum of Rs. 31,55,100/- on 31.03.2013. On a perusal of the sale deed , the A.O observed that though the aforesaid property was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee failed to do so. The CIT(Appeals) though held a conviction that the assessee was not interested in prosecuting his matter, which, thus, was liable to be dismissed on the said count itself, but in all fairness, proceeded with and examined the issue therein involved on merits. As is discernible from the records, the CIT(Appeals) observed that though the A.O in the course of the assessment proceedings had called upon the assessee to explain as to why the stamp duty value of Rs. 31,55,100/- of the aforesaid property may not be adopted as the deemed sale consideration for computing the capital gain u/s. 50C of the Act, but the latter had failed to come forth with any reply. Also, the CIT(Appeals) observed that though the A.O had specifically directed the assessee to furnish copy of the purchase deed and proof of exemption/deduction claimed so as to facilitate calculation of the capital gain on the sale of the aforesaid property, but no such details were furnished by him. Based on the aforesaid facts, the CIT(Appeals) was of the view that no infirmity did emerge from the view taken by the A.O who was constrained to adopt the stamp duty value of Rs. 31,55,100/- as the deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tamp duty of Rs. 31,55,100/- instead of Rs. 3,50,000/- received as sale consideration. The AO also requested the appellant to furnish purchase deed and proof of exemption / deduction claimed so as to provide eligible deduction to the appellant. However, no response was furnished by the appellant. Thereafter, show cause notice u/s 144 dated 05.12.2018 was issued to the appellant to furnish the details by 11.12.2018. However, the appellant again not furnished any details. Since no response was furnished by the appellant before the AO, the AO was left with no choice but to complete the assessment u/s 144 of the Act, 1961. Therefore, since the appellant has not furnished any purchase deed before the AO, the AO added the amount of Rs. 31,55,100/- as sale consideration u/s 50C of the I.T. Act, 1961 The relevant part of the same is reproduced under:- 6. I have perused the assessment order of the AO and the explanation given by him for adding the amount of Rs. 31,55,100/-. The AO during the course of the assessment proceeding issued multiple notices and final show cause notice was also sent to the appellant as to why the amount of Rs. 31,55,100/- should not be added u/s 50C of the I. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part from that, it was submitted by the Ld. AR that though the assessee had submitted before the CIT(Appeals) that he had purchased the property during F.Y.2003-04 for a total cost of Rs. 2,78,870/- ( including stamp duty registration charges), and had based on the same worked out the indexed cost of acquisition at Rs. 5,13,169/-, but the said material aspect had also been brushed aside by the CIT(Appeals), though a reference of the same was made by him in the body of his order. Based on the aforesaid facts, the Ld. AR submitted that now when the property under consideration that was sold by the assessee during the year suffered from serious locational disadvantage, i.e. being a wall locked land located in between constructed buildings belonging to third parties with no independent access/approach road, therefore, the A.O while framing the assessment ought to have made a reference to the Valuation Cell u/s. 50C(2) of the Act for determining the Fair Market Value (FMV) of the said property on the date of transfer. The Ld. AR submitted that though it is a matter of fact borne from record that the assessee under the aforesaid compelling circumstances had failed to participate in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat even in a case where no request is made by the assessee/ assessee s counsel for reference to the Valuation Cell for determination of FMV of the property, the A.O discharging quasi-judicial function remained under a bounden duty to have acted upon fairly by giving an option to follow the course provided by law. The relevant observations of the Hon ble High Court are culled out as under: 8. We have already set out hereinabove the recital appearing in the deeds of conveyance upon which the assessee was relying. Presumably, the case of the assessee was that price offered by the buyer was the highest prevailing price in the market. If this is his case then it is difficult to accept the proposition that the assessee had accepted that the price fixed by the District Sub-Registrar was the fair market value of the property. No such inference can be made as against the assessee because he had nothing to do in the matter. Stamp duty was payable by the purchaser. It was for the purchaser to either accept it or dispute it. The assessee could not, on the basis of the price fixed by the Sub-Registrar, have claimed anything more than the agreed consideration of a sum of Rs. 10 lakhs which, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d material aspect and should have called for a remand report with a direction to the A.O to make a reference to the Valuation Cell for determining the FMV of the aforesaid property in question. 13. Based on the aforesaid facts, I am of a strong conviction that the matter in all fairness requires to be restored to the file of the A.O who is directed to make a reference to the Valuation Officer for determination of FMV of the aforementioned property as on the date of transfer. Needless to say, the A.O shall in the course of the set aside proceedings afford a reasonable opportunity of being heard to the assessee. I am also unable to persuade myself to concur with the adoption of the cost of acquisition of the property under consideration at Rs. Nil by the A.O while calculating STCG on the sale of the same. Although the assessee had in the statement of the facts narrated before the CIT(Appeals), claimed that he had purchased the aforementioned property in FY. 2003-04 for a total consideration of Rs. 2,78,870/- (including stamp duty and registration charges) but the said fact in absence of any supporting material had not been considered by the appellate authority while disposing the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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