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TaxTMI 
2016 (7) TMI 835
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...."1. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in upholding the action of the learned Assessing Officer in invoking the provisions of section 50C of the Income Tax Act, 1961 and thereby erred in confirming the action of the learned Assessing Officer of making addition to the short term capital gain u/s. 50C, and the reasons assigned by him for doing so are wrong and contrary to the facts and Circumstances of the case, provisions of Income Tax Act, 1961 and the Rules made thereunder. 2. (a) On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) erred in making enhancement of the income by Rs. 17,19,800/- without giving the appellant an opportunity of showing cause against such enhancement in terms of the provisions of section 251 (2) of the Income Tax Act, 1961, and as such doing so is wrong and contrary to the facts and circumstances of the case, provisions of Income Tax Act, 1961 and the Rules made thereunder. (b) On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) ought to hav....
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....l of its various problems. It was observed by the A.O. during the course of assessment proceedings u/s 143(3) read with Section 143(2) of the Act, that the assessee had sold a capital asset and had offered the short term capital gain earned in its return of income u/s 50 of the Act. On being asked to furnish the detail of the property sold, the assessee furnished the sale agreement dated 29th May, 2008 wherein the sale consideration of the capital asset sold was Rs. 1,60,00,000/- whereas the stamp valuation authorities valued the said property at Rs. 1,71,75,000/- for the purposes of payment of stamp duty for registration of the said property. The assessee was asked to explain by the AO as to why the stamp valuation authority value of Rs. 1,71,75,000/- should not be adopted as full value of consideration for the purposes of Section 48 of the Act as stipulated u/s 50C(1) of the Act, for the purposes of computation of short term capital gain u/s 50 of the Act . In reply, the assessee submitted that the title of the said capital asset was in dispute and thus the actual sale consideration received was less than the stamp authority value owing to defect in title of the said property ....
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....on adopted by stamp valuation authorities for registering the property. Reference was made by the A.O. to the Departmental Valuation Officer but valuation report was not available with the A.O. at the time of framing assessment u/s 143(3) of the Act and assessment was to be completed before being getting time barred under the provisions of the Act and hence the AO adopted the stamp duty valuation of Rs. 1,71,75,000/- u/s 50C(1) of the Act as full value of consideration for the purposes of Section 48 of the Act for computing short term capital gains u/s 50 of the Act in order to protect the interest of revenue while DVO report was awaited. But now the valuation report of DVO has arrived and the value estimated by DVO was at Rs. 1,88,94,800/- which is more than the value adopted by the stamp valuation authority of Rs. 1,71,75,000/- , as against sale consideration of Rs. 1,60,00,000/- . The said valuation report of DVO was forwarded by the AO to the learned CIT(A) with the request to adopt the value computed by DVO of Rs. 1,88,94,800/- as full value of consideration u/s 48 of the Act keeping in view provisions of Section 50C of the Act with respect to the property sold instead of stam....
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.... sold units on the same day i.e. 29-05-2008 vide two separate agreement to sale on 1st and 2nd floor in the same building respectively and the agreement value for units in both the floors was in aggregate was Rs. 3.6 crores while stamp duty value of units in both the floors was Rs. 3.36 crores, hence, section 5OC of the Act has no applicability keeping in view both the agreements to sale together as stamp duty value was lower than actual sale consideration but if the agreement to sale are considered separately then with respect to sale of units in first floor vide agreement to sale dated 29-05-2008 , the sale consideration is Rs. 1,60,00,000/- while valuation as per stamp duty valuation authorities was higher at Rs. 1,71,75,000/- . The dispute is regarding the units sold on 1st floor of the property which the assessee has sold for Rs. 1,60,00,000/- whereas the DVO adopted the rate as on 29.5.2008 at Rs. 1,88,94,800/- while the stamp duty valuation is Rs. 1,71,75,000/-. With respect to units sold in second floor, there is no dispute as the sale consideration is Rs. 2,00,00,000/- while stamp duty valuation is Rs. 1,64,52,590/-. There are two separate agreement to sale both dated 29-0....
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....f Rs. 1,88,94,800/-. The ld DR submitted that the assessee has not raised issue of Section 50C(3) of the Act before learned CIT(A) . It was submitted that DVO was fully informed of the litigation with respect to the property situated at first floor and the same is taken into consideration by DVO while valuing the said property. 9. We have considered the rival contentions and also perused the material available on record including case laws relied upon by the parties. We have observed that the assessee has sold nine units in two different floors i.e. 1st Floor (unit no 1,2A,2B , 3 and 4 admeasuring 2500 square feet) and 2nd Floor( unit no. 5,6,7 and 7 admeasuring 2300 square feet) together with two car parking space situated at Natasha Plaza, Chembur,Mumbai vide two separate agreement to sale both dated 29-05-2008 with respect to each floor separately which are placed in paper book filed with the Tribunal. The sale deeds and agreement to sale for these two floors are separate and are placed in paper book page 23-161 filed with the Tribunal. Thus , in view of existence of two different sale agreements with respect to units located in two different floor albeit both agreement to sa....
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....ceived which valued the property at Rs. 1,88,94,800/-. The assessee has submitted detailed documents before the DVO at the time of valuation which find mentioned in the ld. CIT(A) order as well in DVO report which is placed at paper book 163-168 and we have observed that litigation aspect is duly factored by the DVO in his valuation report valuing property at Rs. 1,88,94,800/- , which details of litigation disclosed by the assessee to DVO duly found mentioned in DVO report dated 10-10-2012 para 1.4 item no 6 placed at page 164 of paper book. Thus in view of above, no further benefit/relief in valuing the property can be given to the assessee on account of factoring of ongoing litigation with respect to said property at Hon'ble Small Cause Court,Mumbai as the same was already factored by DVO while valuing the property . The ld. CIT(A) considered the Departmental Valuation Officer's rate and enhanced the value by substituting the value as determined by the Departmental Valuation Officer of Rs. 1,88,94,800/- as full value of consideration for the purposes of Section 48 of the Act under the deeming provisions of Section 50C of the Act . We have observed that the provisions of section 5....
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....ion or no reference has been made before any other authority, court or the High Court, the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section16A, clause (i) of subsection (1) and sub-sections (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 modifications, 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.-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). (3) Subject to the provisions contained in sub-section (2), where the value ascertained under sub-section (2) exceeds the value adopted or assessed by the stamp valuation authority referred to in sub-section (1), the value so adopted or assessed by such authority shall be taken as the full value of the consideration received or accruin....