TaxTMI 
TaxTMI 
TaxTMI 
2012 (5) TMI 177
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.... decide afresh after considering the material placed before it earlier, by holding as under:- "This matter is taken up after admitting for final hearing itself. It appears from the impugned judgment and order of the Learned Tribunal that though the assessee argued with the materials, that the valuation arrived at by the assessing officer was not proper and justified, Learned Tribunal, it appears to us has not considered this aspect of the matter. Wherefore, are of the view that this matter needs to be reconsidered. Accordingly, the operation of judgment and order is kept in abeyance and the same is remanded for fresh hearing by the Learned Tribunal, who will hear afresh considering the materials placed before it earlier, and will take a fresh decision. If it is found that the present judgment is required to be changed or varied the same may be done with an open mind and without being influenced and/or swayed by the earlier observation. After considering all the aspects if it is found that this judgment does not require any change, in that event stay granted by this Court will stand automatically vacated." 3. Brief facts relating to this case are that the assessee filed his retu....
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.... assessed by any authority of a State Government (referred to as Stamp Valuation Authority) for the purpose of payment of stamp duty for such transfer, the value so adopted or assessed shall, for the purpose of section 48, be deemed to be the full value of consideration received or accruing as a result of such transfer. In other words, when the stated sale consideration of a land or house property is less than stamp duty valuation for the said property, it is the stamp duty valuation which shall prevail for the purposes of computation of capital gain u/s. 48 of the Act. (7) The provision is, however, subject to an important exception scheme of which is set out in sub-section (2) & (3) of Section 50C. Section 50C(2) provides that where assessee claims before the A.O. that the value adopted by the Stamp Valuation Authority, u/s. 50C(l), exceeds fair market value of the property as on the date of transfer, and unless such valuation is subject matter of litigation before any. Authority or Court, the A.O. may refer the matter for determination of fair market value of the property in question to the D.V.O. and the same shall be taken into account for computation of capital gain. Section....
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....rtly heard. On 20/1/2012, the matter was further taken up for hearing and during the course of hearing, learned counsel for the assessee, Sri S.M. Surana, first of all desired to produce the copy of valuation report made by the Office of ADSR, Sutahata, dated 08/9/2008, which reads as under : Government of West Bengal Office of the A.D.S.R. Sutahata Market Value/Chargeability Assessment Slip Query No./Year 007552/2008 Date 08/09/2008 Applicant Name Lakshmi Kanta Maity Applicant Status Others Type of Deed [0101] Sale Document Market Value Rs. 76,18,872/- Stampduty Payable Rs. 5,33,321/- Stamp Duty: Schedule 1A, Article-23 Registration Fee payable Rs. 83,798/- Sch No. Plot No. Proposed Land use Area Set Forth Value (Rs.) Market Value (Rs.) Depreciation/Appreciation Dist. Purba Medinapaore, P.S. - Durgachak, Mini. - HALDIA, Mouza- Basudevpur 1 1472 Bastu 17 Dec. 5,00,000/- 19,73,624/- AR OPT Sch No. Str. No. Floor No. Use Type Area Sq.Ft. Floor Type Age (Yrs) Roof Type Set Forth Market Depr/Aprc. ....
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.... 1154.76 sqm. Valuation for property at 1472, Basudevpur HPL Link Road, Haldia The property is located on mail HPL Link Road PS Durgachak. Considering the factors such as good commercial area, frontage of building, location, transport facilities and other amenities being very good the rate adopted is Rs. 10750 per sqm. Sd/- Valuation Officer-VI Income Tax Department 54/1, Rafi Ahmed Kidwai Road, Kolkata-700016." 5. We find that by Finance Act, 2002, a new section 50C has been inserted in the Act to make a special provision for determining deemed full value of consideration in case of transfer of immovable property. Sub-sec. (1) of sec. 50C of the Act provides that where the sale consideration declared to be received or accruing as a result of transfer of capital asset being land or building or both is less than the value adopted or assessed or assessable by any authority of Sate Govt. for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall be the deemed full value of consideration and capital gain shall be computed accordingly u/s. 48 of the Act. Further, sub-sec (2) of sec 50C of t....
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.... Rs. 10,750/- per sq.mt. and ascertained the fair market value of this property as on the date of sale dated 29/7/2005 at Rs. 1,24,13,620/-. The AO assessed the deemed sale consideration, as assessed by DVO at Rs. 1,24,13,670/- and computed LTCG accordingly. The assessee before appellate authorities made argument that there is no fixed rate or there is no circle rate fixed by West Bengal Government for assessing the fair market value for the purpose of stamp duty during the relevant period when property was sold by assessee for the area where assessee's property. He referred the matter to Govt. of West Bengal, who assessed the fair market value of this property as on 08/9/2008, whereas the sale was made as on 29/7/2005, at Rs. 76,18,872/- referring the same property. The relevant fair market value assessed by A.D.S.R., Sutahata has been reproduced above in para 4 page 4 & 5 of this order. 7. In view of the above facts, now the question arises as to why the fair market value assessed by DVO as per the provision of sec. 50C(2)(a) of the Act be adopted. The expression "fair market value", in relation to any immovable property transferred, meant the price the immovable property ordina....
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....rring the matter to DVO reason being if the DVO is to adopt the value taken by stamp duty authority, then he has not applied his independent mind and that itself is based on irrelevant considerations and germane considerations have not been considered while assessing the value. Hon'ble Supreme Court has ruled for determining the fair market value, no doubt in the context of Land Acquisition Act, 1894, but the same holds the field even in the case of valuation to be made by the DVO. Hon'ble Apex Court has considered the issue in Chimanlal Hargovinddas v. Special Land Acquisition Officer AIR 1988 SC 1652, 1656-58, in Suresh Kumar v. Town Improvement Trust, Bhopal [1989] 2 SCC 329 (SC) and in Land Acquisition Collector v. Sukhdev Singh AIR 1995 HP 150, laid down following guiding factors:- "(1) The market value of land under acquisition has to be determined as on the crucial date of publication of the notification under section 4 of the Land Acquisition Act (Dates of Notifications under sections 6 and 9 are irrelevant). (2) The determination has to be made standing on the date line of valuation (date of publication of notification under section 4) as if the value is a hy....
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....bsp;Remoteness from developed locality. 6. Level vis-à-vis land under acquisition 6. Some special disadvantageous factor which would deter a purchaser. 7. Special value for an owner of an Adjoining property to which it may Have some very special advantage. (11) The evaluation of these factors of course depends on the facts of each case. There cannot be any hard and fast or rigid rule. Common sense is the best and most reliable guide. For instance, take the factor regarding the size. A building plot of land say 500 to 1000 sq. yds. cannot be compared with a large tract or block of land of say 10000 sq. yds. or more. Firstly while a smaller plot is within the reach of many, a large block of land will have to be developed by preparing a lay-out, carving out roads, leaving open space, plotting out smaller plots, waiting for purchasers (meanwhile the invested money will be blocked up) and the hazards of an entrepreneur. The factor can be discounted by making a deduction by way of an allowance at an appropriate rate ranging approximately between 20% to 50% to account for land required to be set apart for carrying out lands a....