TaxTMI 
TaxTMI 
2017 (12) TMI 736
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....ed in effecting an arbitrary and illegal impugned addition of Rs. 5,18,000.00 to the returned capital gain of his 1/3 share. Since the impugned additions were effected on mere change of opinion and misapplication of law and facts, by rejecting the evidence adduced by the appellant, the impugned additions of Rs. 5,18,000.00 effected to the income returned deserves to be deleted on all force. 3. That the Ld. Appellate Authority, CIT(A) was also wrong in not following the strict interpretation of Sec. 50C of the Act, and in applying the technical interpretation of the provisions of Sec. 50C of the Act, which is purely based on fiction and deeming provisions even without asserting the fair market value of the transferred Plot by merely rejecting the objections, just and bonafide explanations and related evidence adduced before the Assessing Officer at the time of assessment, accordingly the impugned additions of Rs. 5,18,000.00 referred ibid requires to be annulled. 4. That the CIT(A) was wrong in law and on facts of the case in sustaining the Assessing Officer's adopted sale considerations of plot no. 1657P, Sector 13, Hisar at Rs. 60,54,000.00 being value taken ....
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....may please also be granted as may please your goodself." 2. Though, the assessee has raised in all seven grounds of appeal but the main issue is with respect applicability of section 50C of the Income Tax Act that the assessee sold property for Rs. 45 lakhs and stamp duty value of the property is Rs. 60.54 lakhs thereby, as the assessee is having 1/3 share only addition in the hand of the assessee of Rs. 5.18 lakhs is confirmed. 3. The brief facts of the case is that the assessee is an individual who was owning a property along with two others at Hisar, Haryana which has been sold during the year for Rs. 45 lakhs. The assessee who filed his return of income on 31.01.2009 declaring income of Rs. 1131270/- included the capital gain of Rs. 1024412/-. The ld Assessing Officer noted that stamp duty value of the property is Rs. 60.54 lakhs and therefore the provisions of section 50C is applicable. Therefore, on 27.11.2010 the assessee was asked to show cause which was replied on 14.12.2010 stating that actual sale consideration is the correct amount of consideration. It was further submitted as under:- "With reference to the capital gain accrued/ arosed on transfer of plot....
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....h. The assessee being aggrieved with the order of the ld Assessing Officer has preferred an appeal before the ld CIT(A), who confirmed the addition holding as under:- "2. Brief facts of the case are as under- 2.1 The appellant, partner in two firms namely M/s Telmos Electronics and M/s Telmos Associates, deriving interest on capital and remuneration, filed return of income declaring total income of 11,31,270/-. The appellant having l/3rd share in plot no. 1657P, Sector-13, Hisar sold the same for a consideration of C 45.00 lacs in which his share comes to C 15.00 lacs. After claiming deduction of indexed cost of acquisition at Rs. 4,75,588/- from the sale consideration of C 15.00 lacs, Long Term Capital Gains(LTCG) of EUR 10,24,412/- was declared. 2.2 The AO noted from the registered sale deed no. 6807 dated 10.09.2007, though the actual consideration was C 45.00 lacs, the Fair the Stamp Valuation Authority assessed the value at C 60,54,000/- and Stamp Duty of Rs. 3,63,240/- was paid on the aforesaid value of Rs. 60,54,000/-. In view of the provisions of section 50C of the Act, the AO issued show cause as to why the sale consideration should not be taken at Rs. 60....
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....ing the actually agreed and received consideration. An affidavit dated 14.12.2010 was furnished alongwith a copy of memo no. 2833-STR-I-98/5075 dated 12.05.1998 of Financial Commissioner & Secretary, Revenue Department, Haryana regarding the rates fixed by Collector for registration. 3.2 As per provisions of section 50C, if the assessee objects or claims that the value adopted or assessed by the Stamp Valuation Authority under sub-section (1) exceeds the Fair Market Value (FMV) of the property as on the date of transfer, the AO may refer the valuation of the capital asset to Valuation Officer. The word 'may' in the section has to be read as 'should' so that the provision is not rendered redundant. In the instance case, as the assessee objected to the value adopted by Stamp Valuation Authority, the AO was bound to ascertain the value of the asset by referring the valuation to the Valuation Officer as held by Hon'ble ITAT Jodhpur Bench in the case of Meghraj Baid Vs ITO [2008] 114 TTJ 841 (Jd.), which has not been done in the instant case. The AR further relied upon the case law of jurisdictional High Court in CIT Vs Chandni Bhuchar [2010] 229 CTR 190 (P&....
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....hown by the AR that the assessment made by Sub-Registrar was challenged / before the higher authorities meaning thereby that the assessee accepted the value assessed by the Registrar. 4.2 As regards the contention of the appellant that the AO should have referred the asset for valuation to a Valuation Officer in case of objection by the assessee, I would like to disagree with the ratio of Hon'ble ITAT Jodhpur Bench (supra) since in the present case, the appellant could not make out any case that the value assessed by the Stamp Valuation Authority exceeds the FMV of the property, as evident from the objection filed before the AO dated 14.12.20JJL The reliance of AR on the case law of CIT Vs Chandni Bhuchar is misplaced as in that case the issue was that of assessment of difference between the value of the property assessed for the purpose of stamp duty and the actual sale consideration in the hands of the purchaser as unaccounted investment. 4.3 Section 50C has been inserted w.e.f. 1.4.2003 as deeming provision for the purpose of computation of capital gains as it is common knowledge that significant part of the real estate transactions are transacted in cash a....
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....ue so adopted by the stem valuation authority is exceeding the actual transaction value of the property is on the date of the transfer. It is not so that he has merely stated that the stem duty rates are fixed on the whims and fancies of the rate fixing authority but has also stated that in the same vicinity in sector the plots of the same area have been transferred even for lesser consideration. In view of this we are of the opinion that the assessing officer should have referred the matter to the valuation cell and determined the capital gain in accordance with the provisions of section 50 C (2) of the act. The decision of the coordinate bench relied by the Ld. departmental representative in case of Ravi Kant versus ITO (supra) was on the facts that that the departmental representative have given the valuation report in that case and which was also based on some extraneous observation. Furthermore Hon'ble Calcutta High Court in Sunil Kumar Aggarwal versus CIT 272 CTR 332 has held that that no inference can be made that the assessee has accepted the price fixed by the District Sub Registrar for stamp duty purposes as the fair market value of the property because the assessee has n....