TaxTMI 
TaxTMI 
2020 (4) TMI 321
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....aw in treating the sale of agricultural land as a sale of urban land and the consequent levy of capital gain is illegal, void and without justification. 3. That without prejudice to the aforesaid grounds no.1 & 2, the Ld. CIT(A) was not justified in upholding the action of the Ld. Assessing Officer in refusing to refer the matter to the valuation officer as prescribed u/s 50C(2). The refusal to refer the matter for valuation u/s 50C(2) is wholly illegal and without jurisdiction." 3. Brief facts relates to this issue are that the assessee is a medical professional. The e-return of income has been filed on 30.11.2014 declaring income of Rs. 1,34,03,420/-. The case selected for scrutiny through CASS followed by serving of notices u/s 143(2) & 142(1) of the Act. During the year under consideration the assessee claimed to have sold agricultural land on 15.03.2014 for a sale consideration of Rs. 2,45,00,000/-. Capital gain arising thereon was claimed as exempt. Ld. AO noticed that in the sale deed market value was not mentioned. Notice u/s 133(6) of the Act issued to Sub-Registrar. Certified copy of sale deed was filed which showed market value of the land at Rs. 4,67,18,000/....
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....nity during the assessment proceedings and ground no.2 also deserves to be dismissed as the assessee has not raised the issue challenging the action of the Ld. AO for treating the agricultural land as a urban land i.e. capital asset of which the gain from sale thereof was liable to tax for the capital gain income. Thus ground no.1 & 2 stands dismissed. 8. Apropos ground no.3 ld. counsel for the assessee, at the outset, submitted that the assessee made specific request during the course of assessment proceedings for referring the valuation of the impugned land to valuation officer as provided in section 50C(2) of the Act but the request was declined. Assessee's case is thus covered by following decisions of the Coordinate Bench: 1. Mohandas Fatehpuriya vs. ITO in ITANo.1072/JP/2016 dated 26.10.2017 2. Aavishkar Film (P.) Ltd. vs. ITO, I.T.A.T., Mumbai (2019) 108 Taxmann.com 270 dated 21st June, 2019 9. Referring to the above decision request was made to restore the issue raised in ground No.3 to the Ld. AO with a direction for referring the matter to the Valuation Officer for valuing the impugned land. 10. Per contra, Ld. Departmental Representative(DR)....
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....r sub-section (1) exceeds the fair market value of the property as on the date of transfer; (b) the value so adopted or assessed [or assessable] by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the 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 sub-section (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 modi-fications, 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. [Explanation 1].-For the purposes of this section, "Valuation Officer" shall have the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957). [Explanation 2.-For the purposes of this section, the expression "assessable" means th....
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.... the stamp valuation authority at Rs. 2,51,45,500, as deemed sale consideration under section 50C(1) of the Act. Against the adoption of the value determined by the stamp valuation authority as deemed sale consideration, assessee's argument is twofold. Firstly, on the face of objection raised by the assessee against adoption of stamp duty value, the Assessing Officer should have made a reference to the DVO for determining the value of the property. Secondly, the stamp duty valuation cannot be adopted as the deemed sale consideration considering the fact that the property was encumbered. Insofar as the first contention of the assessee with regard to making a reference to the DVO is concerned, on a schematic interpretation of section 50C of the Act as a whole, it appears that, though, under section 50C(1) of the Act the value determined by the stamp valuation authority is to be treated as deemed sale consideration and has to be substituted for the declared sale consideration, however, in a case where the assessee objects to adoption of stamp duty valuation, as per sub-section (2) of section 50C of the Act the Assessing Officer is required to make a reference to the DVO for determ....
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....he tax payer, there is no reason why the machinery provided by the legislature should not be used and the benefit thereof should be refused. The Hon'ble Court has observed that even in a case where no request is made by the assessee to make a reference to the DVO, the Assessing Officer while discharging a quasi judicial function is duty bound to act fairly by giving the assessee an option to follow the course provided by law to have the valuation made by the DVO. The assessee's case stands in a much better footing as in the course of assessment proceedings, the assessee had objected to adoption of stamp duty value as the deemed sale consideration. Thus, in such circumstances, in our considered opinion, the Assessing Officer should have followed the mandate of sub-section (2) of section 50C of the Act by making a reference to the DVO to determine the value of the property sold. The Assessing Officer having not done so and the learned Commissioner (Appeals) also failing to rectify the error committed by the Assessing Officer, we have no hesitation in restoring the issue to the Assessing Officer with a direction to make a reference to the DVO to determine the value of the prop....