AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2013 (9) TMI 646
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....ctively taken by the AO by ignoring the fact that property is in the main market of Civil Lines and is meant for commercial use and that the assessee had not disputed the Stamp Duty valuation? 2. Whether the AO rightly adopted the market value of the land as per the Stamp Duty valuation which the assessee has never objected to, for working out the long term capital gain u/s 50-C of the Act?" 3. After having heard the learned counsel for the parties and perusing the orders passed by the AO, CIT (A) and ITAT, we find that appropriate question, which should have been framed for consideration is as to whether if the assessee claims before the AO that the value adopted or assessed or assessable by Stamp Valuation Authority under sub-section (1) of Section 50C of the Act exceeds the fair market value of the property as on the date of transfer, the Assessing Officer should refer the valuation of the capital asset to a Valuation Officer under Section 50 C (2) of the Act; and whether in the facts and circumstances, if the assessee has filed a report of the approved valuer under Section 12-A of the Wealth Tax Act 1957, and to which no objection was filed by the Income-tax Depa....
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....9 was never furnished before him and therefore the additional evidence may not be accepted at this stage. The CIT (A) thus rejected the additional evidence. The CIT (A) thereafter relied on Section 50 C of the Act and held as follows. "5.1 From the provisions of the said section it is seen that the following elements are essential before any valid addition can be made under the said section, as also endorsed by various Courts of law. 5.1.1. It is mandatory on the part of the AO to make reference to Valuation Officer as per provisions of section 50C where the assessee contended that valuation as done by Stamp Valuation Authority is not acceptable to him. The decision of the AO was not correct where he held that reference to Valuation Officer is optional since the assessee had not objected to value adopted by the State Valuation Authority, there was no need to refer matter to the Valuation Officer [Kalpataru Industries Vs. ITO ITAT No. 5540/Mum/07 decided on 24.08.2009. 5.1.2. Clauses (a) & (b) of sub-section (2) of section 50C are continuation to each other and therefore, conditions laid down in both the clauses are required to be satisfied ....
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....taken as a value for the purpose of arriving at the indexed Cost of Acquisition. This is more so as the property under consideration was very old and under tenancy since 1969 fetching a nominal rent of Rs.625 per month (approx.), in the year of sale and since the assessee could not vacate the property even after a legal battle, had to sell the property to the son of the tenant. 5.3 Therefore, the Capital Gains of the appellant is computed as below for the purpose of assessment : Sale Consideration Received Rs.33,77,186/- Less : Indexed Cost 3.9 lakh X 480/100 Rs.18,72,000/- Long Term Capital Gain Rs.15,05,186/- 5.4 The Long Term Capital Gains is to be taxed @20% based on the computation as above. 6. So far as the Additional Ground taken by the appellant regarding charge of interest is concerned, the same has not been pressed by the appellant during the course of appellate proceedings. In any case charge of interest is mandatory and consequential to the proceedings under consideration. Therefore, this additional ground of appeal is hereby dismissed. In result, the appeal is partly allowed 7. The Appeal filed by the reven....
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....ions (6) and (7) of section 23A, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with necessary modi-fications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under sub-section (1) of section 16A of that Act. Explanation 1. - For the purposes of this section, "Valuation Officer" shall have the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957). Explanation 2. - For the purposes of this section, the expression "assessable" means the price which the stamp valuation authority would have, notwithstanding anything to the contrary contained in any other law for the time being in force, adopted or assessed, if it were referred to such authority for the purposes of the payment of stamp duty. (3) Subject to the provisions contained in sub-section (2), where the value ascertained under sub-section (2) exceeds the value adopted or assessed or assessable by the stamp valuation authority referred to in sub-section (1), the value so adopted or assessed or assessable by such authority shall be....
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....perty and, therefore, there is no deemed gift in the present case. We, accordingly answer both the questions referred to us in the affirmative, i.e., in favour of the assessee and against the Revenue. There shall be no order as to costs." 10. Section 50-C of the Act is a rule of evidence in assessing the valuation of property for calculating the capital gain. The deeming provision under Section 50 C (1) of the Act is rebuttable. It is well known that an immovable property may have various attributes, charges, encumbrances, limitations and conditions. In the present case, it is stated that the property was under the tenancy of father of the purchaser since 1969 and thus the assessee being landlord of the property, offered it for sale to the tenant, which could not have attracted fair market value, as a willing purchaser may have offered for a property in vacant condition. The Stamp Valuation Authority does not take into consideration the attributes of the property for determining the fair market value in the condition the property is a offered for sale and is purchased. He is required to value the property in accordance with the circle rates fixed by the Collector. The object of th....
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....his order that the provisions of Section 50 C (2) are essentially to be read in conjunction with the provisions of Section 50 C (1) of the Act. He also found that in the present case both ingredients of provisions of Section 50 C (2) are present, which made it necessary for the AO to refer the matter for valuation to DVO in accordance with provisions of Section 55-A of the Income Tax Act. The ITAT in allowing the appeal committed serious error of law in finding that in such circumstances and facts of the case, the value of the capital asset as determined by the approved valuer for the month of October 2004 at Rs. 33,77,186/- has to be taken as the sale consideration and similarly the value taken by the approved valuer as on 1.4.1981 has to be taken for the purposes of arriving at indexed cost of acquisition. The ITAT failed to consider that the AO did not record any finding either on the validity of the claim/objection filed by the assessee nor did he record any finding on the sufficiency of valuation of the approved valuer submitted by the assessee. 13. In the present case, the assessee has submitted three different valuation reports of the approved valuer. The first report was b....