TaxTMI 
TaxTMI 
2014 (3) TMI 506
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....000/-, Hence, by invoking the provisions of Sec. 50C, the AO had brought the difference in the long term capital gains (LTCG) to tax, which worked out to Rs. 29,46,800/-. All the grounds raised by the assessee relate to this issue only. The assessee had sold the property bearing H. No. 28-3-85 and 86 at Botlavari Street, Governorpet, Vijayawada on 28.01.2005 for a sale consideration of Rs. 15,10,200/- as recorded in the registered sale deed. However, the Registration Authorities have adopted the market value as indicated in the sale deed at Rs. 44,57,000/-. In view of the provisions of Sec. 50C, the LTCG had to be worked out, by considering the value adopted by the Registration Authorities as against the rate of Rs. 15,10,200/- taken by the assessee. It was observed by the AO from the computation of statement of income that the assessee admitted LTCG of Rs. 8,14,200/- on sale consideration of Rs. 15,10,200/- based on the sale deed, and claimed exemption u/s. 54F. It was observed that in the computation statement the assessee had mentioned that the Vijayawada property was sold in distress as the assessee is forced to go to court for eviction of tenants who have been staying there fo....
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....e. 6. On the other hand, the learned AR submitted that the actual sale consideration is Rs. 15,10,200 as against SRO value of Rs. 45,45,540 which is the stamp value for the purpose of registration. He submitted that the assessee filed two certificates of market value issued by the Joint Registrar on 31.12.2008 for A.Y. 2005-06 mentioning value of the property in one certificate as Rs. 12,000 per sqy and in another certificate as Rs. 12000 per acre. According to him, the value adopted by the SRO is unfair and excessive. According to the AR, the property was sold for lesser price on account of pending litigations with the tenants. 7. Further, he submitted that the assessee's mother had acquired the property about 70 years back and on her demise on 18.08.1968 the same was devolved on the assessee and that for the purpose of indexation, the assessee had taken value of superstructure as on 01.04.1981 at a very nominal rate whereas the registration authorities adopted the same @ Rs. 370/- per square foot (sft) for ground floor and @ Rs. 400/- per sft for 1st floor. It was averred that this was the value for new structures as on 2004-05. It was pleaded that this value cannot be adop....
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.... ITO in ITA No. 3666/Mum/2009 dt. 19.03.2010 wherein it was held that 'when the assessee objects to the valuation adopted by registration for stamp duty purpose, the department has to refer the issue to the Valuation Officer and adopting market value, when the same is disputed by the assessee, without referring to Valuation Officer is not a justified action of the AO'. The AR pleaded for deletion of the addition of Rs. 29,46,800/- made by the AO. 10. On appeal, the CIT(A) observed that the assessee sold her property located at 28-3-85 and 86, Botlavari Street, Governorpet, Vijayawada, for a consideration of Rs. 15,10,200/- vide sale deed dated 28.02.2005 and computed the capital gains at Rs. 8,14,200/- and claimed exemption u/s, 54, for having invested the amounts of Rs. 25,17,660/-, in a residential property at Hyderabad. However, the AO has adopted the sale value of the property at Rs. 44,56,720/-, being the market value of the land (242 sqy) and the structure thereon, to arrive at the net taxable capital gains of Rs. 29,46,800/-, being the difference between the sale consideration of the property as per sale deed (Rs. 15,10,200) and the market value of the property unde....
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....s Rs. 15,360/- per yard, but not Rs. 18,000/- per sq. yard, as assumed by the assessing officer. In this regard, it is relevant to mention here that the property under reference was in dispute with the tenant and due to the advanced age of the assessee, being the owner of the building, put the property for distress sale and this fact revealed by the relevant clause in the sale deed. Thus, the sale consideration as per sale deed was quantified at Rs. 15,10,200/- on which the capital gains have been calculated. Further, the market value of the property for the FY 2005-06, was put at Rs. 12,000 per sq. yard, as per the certificate dated 31.12.2008, issued by the concerned Registration Authority, which was neither disputed or questioned, though it is a fact that the same Registration Authority issued another certificate of the same date, apparently by faux pass, indicating the rate at Rs. 12,000 per acre. The AO instead of pondering over, how the Registration Authority adopted the different rates on different occasions for the same property, the claim of the assessee could have been examined with reference to the facts of the case / deficiencies associated with the property under refer....
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....d as a result of transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government, 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 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. 13. 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 un- flexible. Where a deeming provision states a particular mode of operation, that mode should be adopted and it cannot be diluted or distinguished or differentiated. In the present case, the guidelines value of the impugned property is at Rs. 44,57,000. The sale deed value is at Rs.....