TaxTMI 
TaxTMI 
TaxTMI 
2016 (9) TMI 645
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....aluation Officer which is obtained against the provisions of law?" 2. The assessment year is 2006-07 and the relevant accounting period is the previous year that ended on 31st March, 2006. 3. The respondent - assessee sold his lands bearing Survey Nos.602, 686, 688 and 689 at Adajan, Surat city for a consideration of Rs. 16,00,000/-. The Stamp Valuation Authority had assessed the stamp value of such property at Rs. 2,33,70,600/-. The Assessing Officer, therefore, reopened the assessment by recording the following reasons:- "Information was received by this office that the land sold by the assessee at Adajan survey no.602, 686, 688 & 689 at Adajan, Surat City, for Rs. 16,00,000/- was valued for the purpose of levy of stamp duty by the Stamp Valuation Authority, at Rs. 2,33,70,600/-. Thus the assessee was found to have earned capital gain at Rs. 2,17,70,600/- as per the provisions of section 50C of the I.T. Act, the same amount was found to be the undisclosed income of the assessee for the assessment year 2006-07. Thus the issue involves escapement of income as per the provisions of section 50C of the I.T. Act." The Assessing Officer was of the view that the valuation of the S....
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.... out that under sub-section (2) thereof, the Assessing Officer can refer the valuation of the capital asset to a Valuation Officer provided the assessee claims before the Assessing Officer that the value adopted or assessed or assessable by the Stamp Valuation Authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer and the value so adopted or assessable by the Stamp Valuation Authority under sub-section (1) has not been disputed in any appeal or revision or no reference had been made before any other authority, court or the High Court. It was pointed out that it is an admitted position that the respondent assessee had disputed the value adopted by the Stamp Valuation Authority in appeal before the higher authority. In these circumstances, it was not permissible to make a reference under sub-section (2) of section 50C to the Valuation Officer. It was submitted that in view of the fact that reference made to the DVO was not in consonance with the provisions of section 50C(2) of the Act, the Commissioner (Appeals) as well as the Tribunal were not justified in directing that the value of the land be computed in terms of the valuation mad....
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....e a reference is made to the Departmental Valuation Officer, the value for the purpose of the section shall be the value as adopted by the Stamp Valuation Authority or the DVO, whichever is lower. Having regard to the fact that the valuation in the present case as made by the Departmental Valuation Officer was Rs. 24,15,000/- which was much less than the valuation made by the Stamp Valuation Authority, the Commissioner (Appeals) directed the Assessing Officer to compute the capital gains taking the value given by the Departmental Valuation Officer 6. The Tribunal, in the impugned order, has concurred with the findings recorded by the Commissioner (Appeals) by placing reliance upon a decision of the Allahabad High Court in the case of C.I.T. v. Dr. Indra Swaroop Bhatnagar, for the proposition that a DVO's valuation under section 50C(2) binds an Assessing Officer. 7. Section 50C of the Act, as it stood at the relevant time reads thus: 50-C. Special provision for full value of consideration in certain cases.-(1) Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted ....
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.... such transfer. In such a situation, the value so adopted or assessed 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. Sub-section (2) of section 50C of the Act, however, without prejudice to the provisions of sub-section (1) provides for a situation where the assessee claims before the Assessing Officer that the value adopted or assessed by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of the transfer; and where the value so adopted or assessed has not been disputed in any appeal or revision or no reference has been made before any other authority, court or High Court, then in such a situation the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer. Sub-section (2) of section 50C of the Act further provides that where any such reference is made, the provisions of sub-section (2), (3), (4), (5) and (6) of section 16A, clause (i) of sub-section (1) and subsection (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, sha....