2010 (1) TMI 502 - HC - Income Tax

Appeal Rejected as Assessee Proves Sale Consideration; No Section 142A Valuation Needed for Capital Gains

HC dismissed Revenue's appeal, holding that no substantial question of law arose. It upheld the findings of CIT(A) and Tribunal accepting the sale ... Valuation of property for tax purposes - deeming provision for the purpose of bringing to tax the difference as capital gain - burden of proof - HELD THAT:- The argument of the learned counsel for the Revenue that the Tribunal should have asked the Assessing Officer to make a reference to the Valuation Officer under section 142A of the Act does not require any detailed consideration because the Commissioner of Income-tax (Appeals) had sent the evidence produced by the assessee to the Assessing Officer for his comments. He conducted an inquiry and asked the assessee-respondent to produce original bank statement. Then he sent a reply to the Commissioner of Income-tax (Appeals) authenticating the whole transactions. Thereafter, the Commissioner of Income-tax (Appeals) and the Tribunal have accepted the sale consideration depicted in the sale deed as fact. The assessee-respondent has discharged the burden of proving the sale consideration as projected in the sale deed. Moreover, learned counsel for the Revenue has not been able to point out that the view taken by the Allahabad High Court in Smt. Raj Kumar Vimla Devi's case[2005 (2) TMI 89 - ALLAHABAD HIGH COURT] has been challenged before the hon'ble Supreme Court and the same has been rejected. The aforesaid view seems to have acceptance of the appellant. It that be so then the principle of consistency would require that the aforesaid view be followed as the correct view. Accordingly, we are of the view that no question of law much less substantial question of law warranting admission of the appeal would arise for determination of this court. Issues: (i) Whether valuation adopted or assessed by a State authority for stamp duty can be treated as the full sale consideration for income-tax purposes under section 48 read with section 50C of the Income-tax Act, 1961; (ii) Whether the Revenue's appeal under section 260A raises a substantial question of law warranting admission.Issue (i): Whether valuation adopted or assessed by a State authority for stamp duty can be treated as the full sale consideration for income-tax purposes under section 48 read with section 50C of the Income-tax Act, 1961.Analysis: The valuation made for stamp duty is a deeming construct for specified fiscal purposes and does not automatically establish the actual sale consideration in the absence of admissible evidence. The Assessing Officer must produce positive evidence to show that the assessee paid consideration in excess of the amount recorded in the sale deed. Reliance on precedent emphasises that valuation registers for stamp duty do not ipso facto determine market value for other statutory schemes. The Tribunal and the first appellate authority accepted the sale deed consideration after examination of bank statements and related documents.Conclusion: The valuation adopted for stamp duty does not ipso facto substitute the actual sale consideration; in the absence of positive evidence of higher payment the sale deed consideration must be accepted. This conclusion is in favour of the assessee.Issue (ii): Whether the Revenue's appeal under section 260A raises a substantial question of law warranting admission.Analysis: The issue before the appellate forum involved application of settled principles regarding stamp duty valuation and evidentiary burden, with relevant precedent supporting the view taken below. The factual and legal determinations made by the Tribunal and the first appellate authority were not shown to involve a substantial question of law requiring this court's interference.Conclusion: No substantial question of law is made out; the appeal does not warrant admission. This conclusion is in favour of the assessee.Final Conclusion: The Revenue's appeal is dismissed and the Tribunal's order upholding the first appellate authority's acceptance of the sale deed consideration is sustained, resulting in no addition being justified on account of alleged higher consideration.Ratio Decidendi: Valuation adopted by a State authority for stamp duty does not, without independent positive evidence, operate as conclusive proof of higher sale consideration for income-tax purposes; the assessing authority bears the evidentiary burden to establish any excess consideration and section 50C operates as a deeming provision for capital gains valuation only.