TaxTMI 
TaxTMI 
2019 (4) TMI 1022
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....ss. 3. Without prejudice to the above ground, in any case, the addition made by the AO is contrary to the provision of section 50C of the Act particularly in view of the fact that the assessee during the course of assessment proceedings had submitted evidence before the AO in which it was claimed that value adopted or assessed or assessable by the stamp valuation authority under sub section (1) of section 50C exceeds the fair market value of the property as on the date of transfer, therefore, the case of the assessee was covered by the provision of clause (a) of sub-section (2) of section 50C. The addition made by the AO is in complete disregard of Section 50C (2)(a) and CIT(A) also has failed to appreciate such disregard of the provision of Section 50C(2)(a) by the AO and has wrongly upheld the action of the AO on the ground that there was specific requirement laid down in the provisions for demand of valuation by the assessee. 4. That ld. CIT(A) has erred in law as much as in fact in upholding the chargeability of interest under section 234B, 234C and 234D of the Act. 2. Briefly stated facts of the case are that the assessee, an individual, filed return of income on 27/03/20....
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....of Rs. 49,12,040/- the Ld counsel submitted that the activity of sale of properties was in the nature of the business and thus gain if any on sale of those properties must be computed under the head "profit and gains of the business" rather than under the head "capital gain". The learned counsel submitted that though the assessee has declared the income is short-term capital gain, but the assessee is entitled to claim even for first-time before the Tribunal that the nature of activity carried by the assessee in respect of those flat is in the nature of the business. According to him, nomenclature given to a transaction is irrelevant and true nature is to be determined from the affairs of the transaction. In support of the contention he relied on the following judicial pronouncement: ❖ CIT vs Arvind Kumar Jain [2012] 205 Taxman 44 (Delhi)(MAG.); ❖ CIT vs Avery India Ltd. [2002] 255 ITR 485 (Calcutta); ❖ CIT vs Bhatia General Hospital [2018] 405 ITR 24 (Bombay); and ❖ Radials International Vs ACIT [2014] 367 ITR 1 (Delhi) 3.4 The Ld. counsel further submitted that in case of the income under the head profit and gains of the business, the provision....
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....the Assessing Officer was not under obligation to refer the matter to the DVO, she relied on the following decisions: "1. The conditions for making reference to the Valuation Officer under Section 55A are that (1) valuation done by the SVA is more than apparent sale consideration, (2) the assessee makes a claim before the Assessing Officer that fair market value of the property under transfer is less than the valuation done by the SVA. If these two conditions are satisfied the Assessing Officer is bound to make a reference to the Valuation Officer for determining fair market value of the property under transfer but where no such claim is made by the assessee before the Assessing Officer or he has not made any claim even before the SVA that valuation done by them is higher than fair market value of the property then the Assessing Officer is not bound at his own to make reference to the Valuation Officer. (Sharad Dinesh Photographer v. ITO[2011] 43 SOT 452 (Mum.) 2. The claim for reference to the Valuation Officer has to be justified by the assessee with prima facie material. Unless justified, the Assessing Officer may not make such reference. On the other hand, once a claim for ....
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....cer has mentioned in the assessment order, the details of value shown by the assessee and the value as per stamp valuation authority. The Assessing Officer took the sale consideration as per section 50C of the Act at Rs. 4,29,88,400/- and after subtracting the cost of the acquisition of those properties at Rs. 3,28,32,086/-, computed the short-term capital gain at Rs. 1,01,56,314/-. 3.9 Before us, the Ld. counsel has contested that while computing the adition in dispute, the Assessing Officer has made an arithmetical error of Rs. 74,478/- as he started the computation of total income taking the amount of Rs. 74,478/- as profit as against the loss of Rs. 74,478/- shown by the assessee in the return of income. In our opinion, this is the issue of verification and the assessee would have filed application under section 154 of the Act before the Assessing Officer. However, in the interest of Justice, we direct the Assessing Officer to verify this fact and decide accordingly. 4. On the issue of addition under the head short-term capital gain, the assessee is contesting before us that gain on sale should be considered under the head "Profit and gains of the business" rather than under ....
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....ve not been shown as a stock-in-trade or business asset in any of the earlier years since purchase of the properties. When all these factual observation are seen cumulatively, the claim of the assessee that the activity of sale of properties should be treated as business fails. 4.4 In view of the above facts and circumstances, we reject the claim of the assessee that gain on sale of the properties should be assessed under the head profit of the business. 4.5 In view of above finding, the decisions relied upon by the assessee that no section 50C is applicable in case of the business income, are not relevant. 4.6 On the issue of making reference to the DVO, while invoking section 50C of the Act, sub-clause 2 of section 50C, has prescribed as under: "Special provision for full value of consideration in certain cases. 50C. (1) ........................................................................... (2) Without prejudice to the provisions of sub-section (1), where- (a) the assessee claims before any Assessing Officer that the value adopted or assessed or assessable by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on th....