TaxTMI 
TaxTMI 
2018 (1) TMI 859
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.... claimed capital loss of Rs. 26,28,113/- on sale of property, namely, No. BG-5, Ansal Plaza, HUDCO, New Delhi. In the scrutiny proceedings under section 143(3) of the Income-tax Act, 1961 (in short 'the Act'), the assessee stated that the said property was purchased on 09/07/2005 for a consideration of Rs. 2,44,00,000/- and it was sold for a consideration of Rs. 2,50,00,000/- in the year under consideration. The Ld. Assessing Officer referred the matter to the valuation officer under section 55A of the Act for determination of fair market value of the property as on 01/07/2009 (i.e. the date of sale). The Ld. Valuation Officer vide his order dated 27/12/2011 assessed the market value of the property as on 01/07/2009 at Rs. 3,91,53,000/- as against Rs. 2,50,00,000/- declared by the assessee. The report of the Ld. Valuation Officer was confronted to the assessee. Before the Assessing Officer, the assessee made detailed submission objecting the fair market value adopted for computing the capital gain. In the submission, the assessee also relied on the decision of the Hon'ble Delhi High Court in the case of CIT Vs. Smt. Nilofer I Singh, (2009) 309 ITR 233 ( Delhi). The Assessing Office....
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....ration received or accruing as a result of the transfer. He submitted that in the case of the assessee, the property was transferred on agreement to sale and it was not registered with the stamp valuation authority so no value was assessed or adopted by the stamp valuation authority in the case of the assessee. He further submitted that the amendment to include the "assessable value" for the purpose of section 50C of the Act, was only inserted w.e.f. 01/10/2009 and, therefore, provisions of section 50C of the Act were not applicable in the instant case for year under consideration. 3.3 According to him, for the purpose of computation of capital gain, it was not legally allowed to substitute the fair market value in place of the full value of consideration received/accrued. He submitted that in the case of the assessee, the full value consideration received was of Rs. 2,50,00,000/- only and accordingly, the Assessing Officer was not justified in computing the capital gain adopting fair market value of the property at Rs. 3,91,53,000/-. In support of his contention, he relied on the following case laws: 1. Dev Kumar Jain Vs. Income Tax Officer and Another, (2009) 309 ITR ....
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....nnot be replaced by the fair market value of Rs. 3,91,53,000/- determined by the Ld. DVO. But we also note that as far as transfer of capital assets being land or building or both are concerned, a special provision i.e. section 50C of the Act has been introduced w.e.f. 01/04/2003, which provides for replacement of full value of consideration in certain cases. The said section reads as under: "Special provision for full value of consideration in certain cases. 50C. (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 or assessed or assessable by any authority of a State Government (hereafter in this section referred to as the "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 : 69[Provided that where the date of the agreement fixing the amount of consideration and the date of registration for the transfer....
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....d or building or both, can be replaced by the value 'adopted' or 'assessed' or 'assessable' by the stamp valuation authority for the purpose of payment of stamp duty in relation to such transfer. Further, subsection (2), permits the assessee to dispute such valuation adopted by the state stamp valuation authority and in such a case, it is open for the Assessing Officer to refer the valuation of the capital asset to the Valuation Officer. 3.5.3 In the instant case, the Ld. counsel of assessee has claimed that property in question was transferred through agreement to sale and it was not registered with the stamp valuation authority and, therefore, provisions of section 50C of the Act, were not applicable. 3.5.4 On perusal of the provisions of Section 50C(1) of the Act is evident that prior to 1/10/2009, Section 50C was applicable only in a case where the value was adopted or assessed by the Stamp Valuation Authority. The word "assessable" has been inserted by the Finance (No.2) Act, 2009 w.e.f. 01/10/2009. This means, if any property has been transferred through agreement to sale or otherwise, without registration with the Stamp Valuation Authority prior to 01.10.2009, the deem....