2013 (11) TMI 208

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....e land of its factory property situated at Ambattur for a consideration of Rs. 2,22,64,409. This consideration is as per the sale deed executed by the assessee-company. At the same time, the guideline value adopted by the registering authority was Rs. 3,95,91,000. In the computation of the long-term capital gains the assessee adopted the consideration at Rs. 2,22,64,409. But, the Assessing Officer held that the guideline value of Rs. 3,95,91,000 must be adopted in computing the longterm capital gains. The assessee requested for referring the matter to the Valuation Cell. The Assessing Officer referred the matter to the Valuation Cell under section 50C of the Income-tax Act, 1961. The District Valuation Officer (DVO) proposed a value of Rs. ....

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....ax appearing for the Revenue. The learned Commissioner explained that section 50C is binding on the assessing authority, wherein the law has stated that the Assessing Officer shall, for the purpose of section 48, adopt the valuation determined by the stamp valuation authority and in completing the assessment the Assessing Officer has accepted only that value adopted by the stamp valuation authority. The learned Commissioner of Income-tax has further explained that the report of the District Valuation Officer was not available before the Assessing Officer at the time of completing the assessment. The learned Commissioner of Income-tax further contended that the Commissioner of Income-tax (Appeals) has grossly erred in interfering in the quan....

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.... sale made by the assessee-company. At that point of time the property was valued at Rs. 1.21 crores. He explained that the actual consideration received by the assessee was also close to that amount. The assessee-company received a consideration of Rs. 2,22,64,409. The learned chartered accountant explained that the value realized by the assessee against the sale of the property was a better price in the prevailing circumstances. It was a distress sale, as the property was sold by the assessee to pay off the bank liabilities. He explained that the accounts of the assessee-company showed that the sale proceeds were immediately remitted to the loan account of the UCO Bank. The learned chartered accountant further contended that the Commis....

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....or the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purpose of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer. It is stated in that section that the guideline value shall be deemed to be the full value of the consideration where the consideration stated by the assessee is less than the guideline value. No much argument is necessary to say that section 50C(1) is a deeming provision. A deeming provision is to be strictly applied without widening its scope. But it is also equally important to note that a deeming provision is unflexible. Where a deeming provision states a particular mode of operati....

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....cer is not binding on the Commissioner of Incometax (Appeals). All these procedures are followed in the present case and they are all really sustainable in law. But, the only concern is that the Commissioner of Income- tax (Appeals) has been carried away by certain situations explained by the assessee before him. The assessee has explained that the sale made by the assessee was a distress sale and the entire consideration was paid to the UCO Bank and the sale consideration was comparable to the earlier valuation of the property taken by the UCO Bank and in such circumstances there was no chance to expect more price for the property. It means that there were certain compelling circumstances, which made the assessee to sell the property fo....

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....w stated in section 50C of the Act. Therefore, we find that on the abovestated point we have to differ from the view taken by the Commissioner of Income-tax (Appeals). This is without questioning the authority of the Commissioner of Income-tax (Appeals) to interfere in the valuation of the property, for the purpose of determining the consideration under section 50C of the Act. Except the above, on all other aspects we agree with the Commissioner of Income-tax (Appeals) and the approach adopted by him. Earlier there was a valuation. The value was Rs. 1.21 crores. The valuation was made by the assessee's bankers. The guideline value is Rs. 3,95,91,000. But the valuation made by the District Valuation Officer is less than the guideline v....