TaxTMI 
TaxTMI 
2015 (2) TMI 663
X X X X Extracts X X X X
X X X X Extracts X X X X
....earned Commissioner of Income-tax (Appeals) erred in law and on facts in ignoring the valuation report of the Joint Director, Town Planning (Valuation), Maharashtra State, Pune, valuating the land at Rs. 41,51,00,000 for the purpose of stamp duty. 1.2 The learned Commissioner of Income-tax (Appeals) erred in law and on facts upholding that the assessee did not dispute valuation by stamp duty authorities ignoring the fact that appellant's appeal under section 53A of the Bombay Stamp Act, 1958, was pending before the appropriate authorities for finalisation of value of stamp duty purpose based on valuation report of the Joint Director, Town Planning (Valuation), Maharashtra State, Pune and valuation as per the Joint Director, Town Planning (Valuation), Maharashtra State, Pune, is equal to sale consider ation mentioned in the document and received by the appellant. 1.3 The learned Commissioner of Income-tax (Appeals) ought to have appreciated that the valuation done by stamp office is excessive and unrea sonable. &nb....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dustries P. Ltd. the assessee (lessor) and M/s. Hind Raj Syndicate (lessee) the property admeasuring approximately 9350 sq. yd. was demised unto the lessees. The lease was for a period of 98 (ninety-eight years) with effect from March 4, 1968, for a rent of Rs. 19,971 per month. It was a term of the lease deed that the lessee shall within 3 years construct a build ing (hotel etc.) of value not less than Rs. 5 lakhs and an interest-free deposit of Rs. 59,913 was to be deposited on this account to the lessor by the lessee till completion of construction. All the taxes, fees, duties, outgoings etc. were to be paid by the lessees as per the covenant. In the event of breach of any clauses of the covenants, the lessor may re-enter upon the premises. On expiration of the lease period, the lessee will have to give vacant possession of the premises. Page No : 0413 Supplementary to this indenture of lease deed, an agreement was further entered into between the lessor and lessees dated May 23, 1968. By a letter dated, April 21, 1969, the lessor has granted its licence and consent to assign the rights of the lessee to M/s. Hotel Horizon P. Ltd. Accordingly, vide a deed of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... as on April 1, 1981, at a sum of Rs. 3,10,14,000. Accordingly, the long-term capital gain was computed by the Assessing Officer at Rs. 39,63,69,734 as under : Rs. Rs. Sale consideration-as per market value as assessed by the Collector of Stamps, Mumbai subject to outcome to the appeal filed by the assessee under section 53A of the Bombay Stamp Act, 1958 (actual consideration Rs. 41,51,00,000) 57,74,51,000 Fair market value as on 1-4-1981-As per valuation report of District Valuation Officer-II, Income-tax Department, Mumbai. 3,10,14,000 Indexed cost 582 18,05,01,480 Selling expenses 5,79,786 Long-term capital gain 39,63,69,734 5. All the above facts are mentioned in the statement of facts filed by the assessee before the learned Commissioner of Income-tax (Appeals). 6. Before the learned Commissioner of Income-tax (Appeals) the assessee firstly contested the action of the Assessing Officer in adopting the sale consideration of Rs. 57,74,51,000 as against actual sale consideration of Rs. 41.51 crores. The assessee also contested the action of the Assessing Officer in adopting fa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....asan 1986 ALJ 1244 62 38 Indraprastha Ice and Cold Storage Ltd. v. Union, AIR 1987 Delhi 171 87.5 12.5 9. Further, the assessee objected to the adoption of valuation done by the DVO as on April 1, 1981, relying upon several decisions of the Income-tax Appellate Tribunal in which it was held that section 55A authorises the Assessing Officer to refer for valuation if in the opinion of the Assessing Officer the value of the asset as claimed by the assessee is less than its fair market value or say, value in his opinion could be higher than that disclosed by the assessee and all these decisions of the Tribunal are mentioned in paragraph 1.2 of the order of the learned Commissioner of Income-tax (Appeals). It was also pleaded that the amendment which enable the Assessing Officer to refer the issue regarding valuation even in a case where the value is less than its fair market value is brought on the statute only with effect from July 1, 2012, which could not be applied to the case of the assessee as the amendment is not retrospective. 10. The assessee further objected to the adoption of sale value at Rs. 57,74,51,000 based on value adopted by the Collector....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the outcome thereof and reference can be made to the following submissions : "4. The assessee filed appeals and petitions before the higher authorities under the Bombay Stamp Act to correct discrepancies in valuation and determine fair value. The same were rejected by all the authorities and forums on technical ground that stamp duty value cannot be revised after registration of document under Bombay Stamp Act and not on merit. However, the Bombay High Court observed that their order shall not be an impediment to the income- tax authorities to adopt fair value. Thus, the Income-tax authorities should adopt fair value and not bound by apparent mistakes committed by stamp duty authorities." 13. In view of the aforementioned submissions it was claimed by the assessee that it will be judicious view if sale consideration is adopted as per value determined by the Joint Director, Town Planning (Valuation), Maharashtra Pune at Rs. 41.51 crores. 14. The learned Commissioner of Income-tax (Appeals) has rejected the contention of the assessee that stamp value should be adopted at Rs. 48,35,45,000, as according to the learned Commissioner of Income-tax (Appeals) the provisions of sec....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... considered at 5175.60 (after deducting already utilised area from the total area). Even if the area of land is taken to be 60 per cent. and the value of land is taken at full, i.e., 75,600 per sq. meter, we arrived at the same figure of value of TDR which is obvious from the calculation given below : 5175.60 x 0.60 x 75,600 = 23,47,65,220 1.3.4.2 Thus, it is clear that the appellant basically wants double deduction value, i.e., reduction in the area as well as reduction in rate by 60 per cent. as per its calculation quoted page 6-6 of this order in table-2 where it has computed the assessee's share of TDR at Rs. 14,08,59,132. Considering 60 per cent. of land area and 60 per cent. of value the amount comes to 5175.60 x 0.60 x 75,600 x 0.60. 13.4.3. The Collector of Stamps, Andheri has thus-not made any mistake and has already given 60 per cent. deduction for valuation of TDR and the appellant's submission that there is a mistake found to be not valid and even mischievous. It is pertinent to note that, i.e., Hotel Horizon Pvt. Ltd. the purchaser who paid stamp duty has not objected to the value of the property and even the value of TDR and it is the appellant who wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nable. The learned authorised representative further submitted that the learned Commissioner of Income-tax (Appeals) has committed an error in excluding the value of TDR from the total valuation made by stamp duty officer and computation of capital gain being capital asset without any cost and for doing so the learned Commissioner of Income-tax (Appeals) has also failed to appreciate the peculiar nature and status of the property and transaction. Lastly, the learned authorised representative submitted that the learned Commissioner of Income-tax (Appeals) has also committed an error in not accepting the valuation submitted by the assessee as on April 1, 1981, at a sum of Rs. 5,62,50,775 and has committed an error in relying upon the valuation done by the District Valuation Officer as on April 1, 1981, at Rs. 3,10,14,000. It was submitted that the learned Commissioner of Income-tax (Appeals) has failed to appreciate that the provisions of section 50C could not be applied in a case where there is no proof, even a suggestion that something more is paid over and above agreement price. For the purpose of valuation as on April 1, 1981 the learned authorised representative placed reliance ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r of Income- tax (Appeals) in paragraph 1.3.3.12 of the impugned order. 20. So far as it relates to the contention of the learned authorised representative regarding the so called mistake in calculating the value of TDR for the purpose of stamp valuation it was submitted by the learned Departmental representative that in paragraph 1.3.4 the learned Commissioner of Income-tax (Appeals) has held that there is actually no mistake in the order of Collector of Stamps as the value of TDR has also been taken at 60 per cent. of the value. It was further submitted by the learned Departmental representative that the learned Commissioner of Income-tax (Appeals) is also right in rejecting the claim of the assessee regarding adoption of fair market value as on April 1, 1981, as per valuation submitted by the assessee in preference to report of the District Valuation Officer. Thus, it was submitted by the learned Departmental representative that the appeal filed by the assessee should be dismissed. 21. Before proceeding to decide the present appeal, we may mention here that during the course of hearing of the appeal, certain figures were submitted by the assessee in the shape of chart and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by an assessee of capital asset, which, inter alia, include land or building or both is less than the value adopted or assessed or assessable by any authority of a State Government (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 purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer. Exception is provided in sub-section (2), which prescribes that in a case where the assessee claimed before the Assessing Officer that the value adopted or assessed or assessable by the stamp valuation authority exceeds the fair market value of the property as on the date of the transfer and the value so adopted or assessed by the stamp valuation authority under sub-section (1) of section 50C has not been disputed in any appeal or revision or no reference has been made before any other authority, court or High Court, then the Assessing Officer may refer the valuation of the capital asset to the Valuation Officer of the Department. Thus, according to sub-section (2) in a case where the assessee claimed before the Assessing....
X X X X Extracts X X X X
X X X X Extracts X X X X
....valuation before the Chief Controlling Revenue Authority, Maharashtra State, Pune against the aforementioned order dated August 4, 2009 and this was registered and miscellaneous application of the assessee was disposed of vide order dated February 6, 2012 and the copy of this order was filed at pages 110 to 114 of the paper book. The sum and substance of the order passed by the Chief Controlling Revenue Authority, Maharashtra State, Pune is that stamp duty has been paid by other party without protest and the duty payer has not appealed to this authority at any point of time. Moreover, the assessee did not file application within time limit stipulated under the law, i.e., 60 days from the receipt of impugned order. Therefore, the assessee does not have locus standi to approach the authority. The authority is not legally empowered to take any decision or give opinion when no cause of action exists under the Stamp Act for the implementation of which this authority has been created. As per the provision of section 50C(2) of the Income-tax Act, 1961 a mechanism for redressal of grievances has been provided in a case where the assessee disagrees with the valuation done by the stamp autho....
X X X X Extracts X X X X
X X X X Extracts X X X X
....able by the petitioners. The obligation to pay the stamp duty was on the purchaser-Hotel Horizon Pvt. Ltd. who had paid the stamp duty without any protest. The petitioners, if at all aggrieved ought to have approached the authorities in the first instance. Prima facie, it does appear that it is only at the time of filing of the revised return of income that the petitioners have sought to challenge the order of adjudication and valuation by the Collector of Stamps so as to claim some tax relief in the incidence of long-term capital gain tax. 8. In light of the above, I am not inclined to exercise writ jurisdiction of this court to interfere with the impugned order. The petition is, therefore, dismissed. 9. The court is informed that the assessment order has been passed by the Assessing Officer of the Income-tax Department and the matter is now pending before the Commissioner of Income-tax. It is clarified that it will be open for the Commissioner of Income-tax to pass such orders as he deems appropriate with regard to the valuation of the subject property in accordance with law an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Assessing Officer to adopt fair market value of the impugned property as on April 1, 1981, at Rs. 5,62,50,775 as per valuation submitted by the assessee of the Registered Valuer, copy of which is filed at pages 1 to 25 of the paper book and at page 15 the value has been arrived at Rs. 5,62,50,775. 30. Before parting with this ground we may mention here that in the second return of income filed by the assessee, the capital gain has been computed on the basis of valuation done by Shri S. S. Rahalkar as on April 1, 1981, who has assessed the value at Rs. 7,08,94,016. During the course of hearing of the appeal neither the learned authorised representative referred to this valuation report nor any reliance was placed on the same. The said report was also not relied upon before the learned Commissioner of Income-tax (Appeals). Copy of the said valuation report is also not filed in the paper book. In ground No. 2 of the appeal no reference is made to the said valuation and reference is made only to the valuation done by M/s. Shah and Shah who valued the impugned property as on April 1, 1981, at Rs. 5,62,50,775. In view of these facts no cognizance is taken of the valuation report of....