TaxTMI 
TaxTMI 
2017 (5) TMI 831
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....ties, for computing the capital gains payable by the assessee on sale of a property. As per the Revenue, ld. Commissioner of Income Tax (Appeals) did not considered the Board Circular No.8/2002, dated 27.08.2002, while holding so. 2. Facts apropos are that assessee had filed his return of income for the impugned assessment year disclosing business income of @2,50,000/- and long term capital gains of @23,46,151/-. The assessment was completed u/s. 143(3) of the Income Tax Act, 1961 (in short "the Act'') assessing long term capital gains at @44,48,980/- and accepting business income of @2,50,000/-. Thereafter ld. Commissioner of Income Tax (Appeals) found the order of the ld. Assessing Officer to be erroneous and prejudicial to the interes....
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....air market value of the property was fixed at @31,48,000/-. Ld. Commissioner of Income Tax (Appeals) based on the valuation made by the District Valuation Officer directed ld. Assessing Officer to consider the sale consideration as @31,48,000/- and recompute long term capital gains. 4. Now before us, ld. Departmental Representative relying on Sub Section (2) to Sec. 50C of the Act submitted that when a value lower than the value fixed by the stamp authorities was fixed by the DVO, the latter value alone had to be adopted and not the former. 5. Per contra, ld. Authorised Representative strongly supporting the order of the ld. Commissioner of Income Tax (Appeals) submitted that once the reference was made to a Valuation Officer u/s. 50C....
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....fixed by the DVO then the purpose of reference to the DVO itself is lost. In such circumstances, no circular of the CBDT can come to the aid of the Revenue. Once a valuation is given by the Valuation Officer in accordance with Sec. 50C of the Act, then such value alone can be adopted where it is lower than the value assessed by the stamp valuation authorities as held by Hon'ble Gujarat High Court in the case of Principal Commissioner of Income Tax vs. Ravjibhai Nagjibhai Thesia, 388 ITR 358. Para 8 of the above judgment which is on this issue is reproduced hereunder:- "8. Thus, sub-section (1) of section 50C of the Act envisages a situation where the consideration received or accruing as a result of transfer by an assessee of a capital a....
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....o 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. At this juncture it may be apposite to refer to the provisions of section 16A of the Wealth-tax Act, 1957 to the extent they are relevant for the present purpose. Sub-section (1) of section 16A of the Wealth-tax Act provides for making reference to the Valuation Officer. Sub-sections (2) to (5) of section 16A provide for the mode and manner in which the value of an asset is to be estimated. Sub-section (6) of section 16A of the Wealth-tax Act provides that on receipt of an order under sub-section (3) or sub-section (5) from the Valuation Officer, the Assessing Officer shall, so far as valuation of the ass....