TaxTMI 
TaxTMI 
2008 (4) TMI 534
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....e sale consideration declared by the assessee for entire 4 properties was Rs. 40,48,000 while the market value adopted for stamp duty purpose was Rs. 1,64,16,000 so the Assessing Officer adopted the market value of the property for the stamp duty purposes taking recourse to section 50C of the Income-tax Act, 1961 [in short 'the Act'] and worked out the capital gain in the case of the assessee at Rs. 58,20,917. 3. Aggrieved with the order of Assessing Officer the assessee filed an appeal before the CIT(A) and submitted that the stamp duty is purely paid at the circle rates which are fixed by the state authorities. The circle rates do not mention the details and descriptions of the properties. It is flatly applied to all the properties which are covered in the vicinity of circle rates. In fact, old tenants covered under UP Rent Control Act could not be evicted or dispossessed from the properties. Also these properties have no proper location and no proper approach roads. The properties under consideration were considered at the same circle rates which are also applicable to those properties which are newly built, and having good location and approach roads. The property No. 31/20 ....
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.... not exceed the actual sale consideration. Further, it is submitted that the request was also made before the Assessing Officer to refer for valuation under section 50C(2) of the Act to Valuation Cell in case the Assessing Officer was not satisfied with the valuation of the above properties in question. The Assessing Officer turned down the request of the assessee and ignoring all the submissions made before him, he passed the impugned order. 4. In support of his contentions he placed reliance on various case laws as detailed in the order of CIT(A) to contend that from his submissions and the case laws cited, the market value of the properties sold should be adopted at the actual consideration for which they were sold (actual realized value) by the assessee and not the notional and hypothetical gain as assessed by the Assessing Officer and so the impugned addition made by the Assessing Officer is liable to be deleted. During assessment proceedings before the CIT(A) the ld. AR for the assessee further brought to his notice that vide letter dated 12-12-2005 the assessee has requested the Assessing Officer to refer the case to the Valuation Cell in case the value declared by the as....
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.... authorities below. 7. In order to decide the issue involved in the ground of appeal taken by the Revenue, we are required to decide whether the capital gains from the property are required to be worked out by adopting the market value on which the stamp duty has been paid by the assessee or are to be worked out as per the valuation by the Valuation Cell of the Income-tax Department. In this regard, we would like to refer to the relevant provisions of section 50C(1), (2) and (3) of the Act, which read as under: "50C. Special provision for full value of consideration in certain cases - (1) Where the consideration received or accruing as a result of the transfer of an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed by any authority of a State Government (hereafter in this section referred to as the "stamp valuation authority") for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer. (2) Without prejudice to the provisions of sub-sectio....
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.... where the assessee claims that the value adopted or assessee for 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 assessee in any appeal or provision 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. Sub-section (3) of section 50C of the Act further provided that if the fair market value determined by the Valuation Officer is less than the value adopted for stamp duty purposes, the Assessing Officer may adopt such fair market value to be the 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 shall take the full value of consideration to be the value adopted or assessed for stamp duty purposes. 9. Thus, sub-section (3) of section 50C of the Act would mean that if the value ascertained by Valuation Officer exceeds the stamp value; the value adopted for computation of capi....