TaxTMI 
TaxTMI 
2018 (12) TMI 759
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....Officer (DVO) for ascertaining fair market value of the property. The DVO determined the fair market value of the property at Rs. 46,96,400/- after considering the assessee's objections. The AO computed capital gain by adopting full value of consideration at Rs. 46,96,400/- on the basis of DVO's report instead of the actual sale consideration of Rs. 42,00,000/- shown by the assessee. This resulted into an addition of Rs. 4,96,400/-, which was confirmed by the ld. CIT(A). The assessee is aggrieved by the said addition. 4. I have heard both the parties and perused the material available on record. It is not disputed that the stamp value of the plot sold by assessee was Rs. 56,19,000/- as against declared sale consideration of Rs. 42,00,000/- and the DVO determined fair market value at Rs. 46,96,400/-, which constitutes the basis for the instant addition. The ld. AR stated that the ld. CIT(A) went wrong by relying on the decision of the Mumbai Bench of the Tribunal in Smt. Bharti Jayesh Sangnai (2011) 128 ITD 0345 (Mum) in holding that the report of the DVO is binding on the AO. He submitted that this report should not have been taken into consideration and the declared sale value o....
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....t he arrived at the fair market value as on the date of valuation as per valuation guidelines issued by DIT and considering other relevant factors. In my considered opinion, sale instances noted by a DVO can only be a starting point for determining the fair market value of any property, which need necessary modifications depending on the peculiar facts and circumstances of the property which has to be valued. All the relevant factors, such as, time lag, location, shape and size of the property and future potential etc. need to be considered before determining the fair market value of the property as on the date of sale. Considering the totality of facts and circumstances of the instant case, I am satisfied that the DVO was correct in determining fair market value of the property in his calculation after taking into account the cumulative effect of all the germane factors. 8. The next objection taken by the ld. AR is that plot of the assessee was small in size and not in proper shape and hence reduction should have been carried out. In the considered opinion of this Tribunal, if the size of a plot is small, it is natural that its fair market value will be higher because of the pote....
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.... 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 : .... 12. Sub-section (1) of section 50C of the Act clearly articulates that where the consideration received or accruing as a result of the transfer by an assessee of a plot etc. is less than the value adopted etc. by stamp duty authority, the value so adopted etc. shall be deemed to be the full value of the consideration. It is thus discernible that section 50C is a deeming provision and it is a settled legal position that a deeming provision must be extended to its logical conclusion. The Hon'ble jurisdictional High Court in the case of CIT Vs. Lokmat Newspapers P. Ltd. reported in (2010) 322 ITR 43 (Bombay) has held that: "Once a deeming fiction is created by law, it....
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....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 section 16A, 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. 15. Sub-section (2) is without prejudice to the provision of subsection (1), which implies that an assessee can claim 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. When such an objection is taken, it becomes mandatory on the part of the Assessing Officer to make a reference to DVO, who, in turn, has to determine the fair market value of the property after entertaining objections from the side of the assessee. Then sub-section (3) of section 50C comes into play, which states that....