TaxTMI 
TaxTMI 
2007 (3) TMI 317
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....er as against that shown by the assessee through agreement dated 30-11-2002. He referred the matter to the Assistant Valuation Officer under section 55A who estimated the value of the said plot at Rs. 1,43,122 as against sale consideration shown by the assessee at Rs. 36,000. The differential amount of Rs. 1,07,122 was added. In the first appeal, the assessee made various submissions including the inapplicability of section 50C to the facts of the case. The ld. CIT(A) did not accept the assessee's contention on merits and held that the value adopted by the Valuation Officer appeared reasonable and there was no reason to deviate from the same. Resultantly the addition was sustained. 4. I have heard the rival submissions and perused the relevant material on record. The ld. A.R. has vehemently argued that section 50C is not applicable to this case as the sale was made through agreement without getting it registered. It is further noted that this contention was also raised before the ld. CIT(A) who has recorded the assessee's submission on this count in the impugned order but had not adjudicated upon this aspect. At this juncture, it would be relevant to consider the relevant ....
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.... stamp duty purposes exceeds the fair market value of the property as on the date of transfer and he has not disputed the value so adopted or assessed in any appeal or revision or reference before any authority or court the Assessing Officer may refer the valuation of the relevant asset to a Valuation Officer in accordance with section 55A of the Income-tax Act. If the fair market value determined by the Valuation Officer is less than the value adopted for stamp duty purposes, the Assessing Officer may take such fair market value to be full value of consideration. However, if the fair market value determined by the valuation officer is more than the value adopted or assessed for stamp duty purposes, the Assessing Officer shall not adopt such fair market value and will take the full value of consideration to be the value adopted or assessed for stamp duty purposes. It is also proposed to provide that if the value adopted or assessed for stamp duty purposes is revised in any appeal, revision or reference, the assessment made shall be amended to recompute the capital gains by taking the revised value as the full value of consideration. These amendments will take effect from 1-4-20....
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....ssessee had shown lower sale consideration, the value for stamp duty purposes cannot be taken into consideration as the sole criteria in computing the capital gain on transfer of land and building. 9. It was with the view to overcome such a settled legal position that the Legislature inserted section 50C with effect from 1-4-2003. After the addition of this new section in the statute book, the earlier legal position qua the transfer of land or building or both is no more a good law inasmuch as the value adopted or assessed by any authority of State Government for the purpose of payment of stamp duty in respect of such transfer has to be considered as full value of consideration received as a result of transfer and capital gain has to be computed accordingly. The rigor of sub-section (1) of section 50C has been toned down by sub-section (2), the relevant portion of which provides that: "where the assessee claims before any Assessing Officer that the value adopted or assessed by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer, the Assessing Officer may refer the valuation of the capital asset to a Valuati....
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....erated by the Hon'ble Supreme Court in the case of CIT v. Mother India Refrigeration Industries (P.) Ltd. [1985] 155 ITR 711. Thus, what is relevant for the attractability of section 50C, is that the property which is under transfer from the assessee to another person should have been assessed at a higher value for stamp valuation purpose than that received or accruing to the assessee. The value adopted or assessed by the stamp valuation authorities has to be of the very same property, which is the subject-matter of transfer. The language of this section provides in unambiguous terms that the value adopted or assessed by the stamp valuation authority has to be substituted with the sale consideration of the 'such property'. But for section 50C, there is absolutely no warrant for replacing the value adopted by the stamp valuation authority with the actual sale consideration for the purposes of computing capital gain. Thus it is clear that the property in respect of which valuation is made for purposes of stamp duty must be the very same property, which is the subject-matter of transfer for calculating capital gain by invoking the provisions of this section. It is wholly i....