TaxTMI 
TaxTMI 
TaxTMI 
2019 (3) TMI 648
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....property by her during the relevant Assessment Year. 2. The Appellant/Assessee has raised the following Substantial Questions of Law : (i) Whether on the facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal was justified in adopting the fair market value under Section 50C of the Income Tax Act, without considering the objections of the Assessee with regard to fair market value of the property sold by the Assessee during the relevant Assessment Year 2012- 2013, based on the report of the Departmental Valuation Officer as well as against the presumptive value of the capital asset as per Section 50C of the Act ? (ii) Whether on the facts and in the circumstances of the case, the Appellate Authorities themselves could decide the objections of the Assessee or should have remitted the matter back to the Assessing Authority for the said purpose ?" 3. The Assessee also claimed exemption under Section 54F of the Act on account of reinvestment of the sale consideration in acquisition of the new property. 4. The issue raised before this Court in the present appeal by the learned counsel for the Assessee is that the sale consideration of the property in ....
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....incorrect. 6. There were no housing project and commercial project started up to 2012 on either side of ECR Link Road. It is to state that there were open lands only. Hence the place was completely underdeveloped. However the values adopted were of retail plots after the land was developed which is unfair. 7. The guideline rate published by government from 2007 to 2012 was Rs.1000/- per sq. feet all through these years. The guideline was revised upwards at the end of 2012 and the rate specified is Rs.1500/- per square feet in the said location. Hence the value before 2012 should be adopted. 8. The entire parcel of land to the extent of 3.32 acres was sold by three sale deeds at the same date - 28th April 2011. The land being underdeveloped the guideline rate prescribed by the government for the developed saleable land cannot be a yard-stick for valuing the underdeveloped large parcel of land. II. In this regard we reply on the decision of the Hon'ble Delhi High Court in the case of CIT vs. Khoobsurat Resorts (P.) Ltd. (2012) 28 taxmann.com 93. It was held in para 15 as under : 'This court is of the opinion that the express provision of Section 50-C enabling the ....
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....as submitted that for the purpose of stamp duty, there was a dispute between the buyer and the State Government and only at the time of assessment proceedings, the assessee came to know that the buyer had paid some extra stamp duty to get the registration completed. However, when the sale deed was executed, the consideration money as stated in the sale deed was only received. Hence, substituting the stamp value as the sale consideration will be a gross injustice. During the assessment proceedings, the assessee has requested AO vide letter dated 10.03.2015 to carry out the valuation of the property by valuation officer u/s.142A of the Act. However, the assessment was getting time barred on 31.03.2015 and by that time the valuation report was not received by the AO. Accordingly, the AO considered the sale consideration of the property at 50C value and computed LTCG. Therefore, the difference of sale consideration as shown in the sale deed and the 50C value of the property was added in computing the LTCG. The appellant has filed the appeal against the order by raising the grounds of appeal supra on the issue. During the appeal proceedings, the AO has further forwarded the valu....
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....g Authority for computing the Capital Gains Tax liability of the Assessee. The Tribunal also dismissed the appeal of the Assessee in this regard and upheld the 'Guidance Value' as determined by the State Government for stamp duty purposes as 'Fair Market Value' and thus upheld the addition of Rs. 2,61,05,992/- in the declared sale value of the asset in the Sale Deeds. The Tribunal, thus, adopted the said Fair Market Value under Section 50C of the Act and directed the Assessing Authority to compute the relief under Section 54F of the Act accordingly. The relevant Paragraphs 7.5 and 7.6 of the order of the Tribunal, dated 27.09.2017, are quoted below for ready reference : "7.5 With regard to full value of consideration as a result of transfer of a capital asset, the provisions of section 48 of the Act is very clear that the income chargeable under the head "Capital gains" shall be computed, by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset. In this case, as per section 50C(1) of the Act, where the consideration received by the assessee as a result of transfer of a capital asset, being land, bu....
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....ard the learned counsel for the parties and given our due consideration to the rival submissions and also the material available on record. 10. Section 50C of the Act, as it now stands after its amendment by Finance Act, 2018, with effect from 01.04.2019, adding Third Proviso to Section 50C (1), is quoted below for ready reference: "50C. 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 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. Provided that where the date of the agreement fixing the amount of consideration and the date of registration for the transfer of the capital asset are not the same, the value adopted or assessed or assessable by....
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....e time being in force, adopted or assessed, if it were referred to such authority for the purposes of the payment of stamp duty. (3) Subject to the provisions contained in subsection (2), where the value ascertained under subsection (2) exceeds the value adopted 1 [or assessed or assessable] by the stamp valuation authority referred to in sub-section (1), the value so adopted 1 [or assessed or assessable] by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer." 11. The Delhi High Court, in the case of CIT v. Khoobsurat Resorts (P.) Ltd., referred to above, dealing with a similar question held in our respectful opinion rightly and we fully agree with the same, that the provisions of Section 50C of the Act only enable the Revenue to adopt the Guidance Value declared by the State for payment of stamp duty, as the Fair Market Value under Section 48 of the Act. But, that Guidance Value cannot, ipso facto, be taken as the valuation for the purpose of computing Capital Gains Tax liability in the hands of the assessee/seller. Sub-section (2) of Section 50C of the Act itself provides for reference to Departmental Valuation....
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....he assessee for the first time only before CIT (A). The objections raised by the assessee were never really considered by CIT (A) nor did he choose to remit the matter back to the Assessing Officer for that purpose. Thus, the presumptive value under Section 50C of the Act giving rise to the additions to the extent of Rs. 2,61,05,992/- to the declared sale value, as disclosed by the assessee, was adopted by the Appellate Authorities, without meeting the objections of the assessee at all. As such, the presumption under Section 50C (1) of the Act, even though rebuttable in law, was never allowed to be rebutted by the Assessee at all. The so called 'careful consideration' of objections by CIT (A) or by DVO himself is not borne out at all on record and, therefore, nothing can be said about that. But, in any case, the consideration of objections of the Assessee by the Assessing/Appellate Authorities was a must to be undertaken exercise. But, that was not done. In other words, the Departmental authorities failed to meet the objections of the Assessee, which were raised before CIT (A) for the first time at the appeal stage, but were never overruled by a speaking order and the Guid....
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.... the Assessee in accordance with law. 16. A bare reading of Scheme of Section 50C of the Act would show that Assessee can object to presumptive value as per Section 50C (1) and, therefore, it is only after hearing the objections of the Assessee, the Fair Market Value of the Capital Asset as per 'Guidance Value' can be determined by the authorities. The Assessee cannot be denied an opportunity to raise his objections even against the presumptive Fair Market Value under Section 50C (1) of the Act or Report of DVO under Section 50C (2) of the Act and the Assessing Authority or the Appellate Authorities, whose powers are co-extensive with those of the Assessing Authority, cannot refuse to meet those objections point by point. 17. The Fair Assessment Procedure under the scheme of assessment in the Income Tax Act has it at the root the principles of natural justice and the same has not been denied by presumptive provisions, such as Section 50C of the Act and several other provisions in the scheme of the Act. 18. In the present facts noted above, we are of the opinion that CIT (A), where, for the first time, the Report of DVO came up, could either deal with the objections of As....