TaxTMI 
TaxTMI 
2017 (3) TMI 1827
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....der section 147 of the Act as there was reason to believe that capital gain which arose from sale of property has been escaped assessment and accordingly, notice under section 148 of the Act dated 21.06.2013 was served on the assessee. Notice under section 143(2) of the Act dated 20.09.2013 was served on the assessee. Thereafter, notice under section 142(1) of the Act dated 19.09.2013 was served on the assessee. In response thereto, the assessee furnished all the details including settlement deed, pattas and other documents in support of his claim on adopting the sale consideration at Rs..400/- per sq.ft. 2.1 During the course of assessment proceedings, the Assessing Officer has observed that the assessee has sold property at Zamin Pallavaram to South India Assemblies of God registered at Mumbai resulting in long term capital gains. The assessee had offered sale consideration of Rs..2.80 crores. On examination of the sale document of the property, the Assessing Officer has observed that the property was sold for Rs..3,79,90,860/- @ Rs..555/- per sq.ft., whereas the sale consideration shown in the document was Rs..2.80 crores @ Rs..400/- per sq.ft., thereby attracting the provision....
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....ances, then, he has to consider the sale instances of the relevant date when the assessee sold property or dates proximate to that date. He cannot take comparable instances of sale which happened 7/8 months after the date of sale of property by the assessee. Further, considering the appreciation in value of the property as per the SRO guideline the discount given by the DVO on backward calculation, is not fair. In the aforesaid view of the matter, the value determined by the DVO cannot be treated as the fair market value of the property. * At the same time, the sale consideration shown by the assessee in absence of adequate evidence could not be accepted. Though, the assessee has contended that the actual extent of land as physically available is less than what is mentioned in document, but, the same needs to be substantiated by producing supporting evidence. As it appears neither any physical verification has been done at any stage to ascertain the exact extent of land nor any conclusive evidence has been brought on record to establish such claim. So, simply relying upon the confirmation of the buyer, assessee's claim of shortage of land cannot be accepted when the registere....
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....ess than value on which stamp duty was paid for acquisition- Assessing Officer added back to assessee's income difference between consideration mentioned in sale deeds and consideration declared for purpose of stamp duty - Whether provisions of Stamp Act levy stamp duty at predetermine or notified rates - Held, yes - Whether where higher cost of acquisition is declared for stamp duty, assessing authority should analyze contemporary comparable sales before adopting such higher cost as cost of acquisition and without doing so no addition could be made - Held, yes [Para 15] [In favour of assessee] FACTS-I Facts * During the previous year, the assessee-company had purchased six properties. The market value declared by the assessee for the purpose of stamp duty was more than the consideration mentioned in the sale deeds. * The Assessing Officer added back the difference between the consideration mentioned in the sale deeds and the consideration declared for the purpose of stamp duty, to the income of the assessee. * On appeal, the Commissioner (Appeals) deleted the impugned addition of Rs. 12 lakhs holding that the stamp duty was charged by the local authority/sub-registra....
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....lenged and appealed before another authority i.e. District Revenue Officer (Stamps), Chennai and the DRO in turn inspected the property and fixed the market value for the subject property at Rs. 555/- (against the guideline value of Rs. 400/- as on the date of sale i.e. 01.06.2009) issued vide D140/09 dt. 02.07.2011 as found in Page 29 of the document. The document realised after obtaining excess stamp duty on 16.08.2011. As per the provision of sub-section 2 of Section 50C of the Income-tax Act, inserted by the Finance Act, 2002, "the assessing officer can entertain any appeal by the assessee of such value assessed by the stamp duty valuation authority and adopted by the assessing officer, only if the value so adopted by the stamp valuation authority has not been disputed in any appeal or revision before any Authority, Court or High Court." "Having considered all the copy of details furnished by the Assessing Officer and having taken into account all the relevant material and considering the provision of Section 50C of Income-tax Act, I hereby suggest to consider the fair market value of the property @ Rs. 555/- as by the Appellate Authority (i.e. DRO (STAMPS), Chennai) amount....
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.... 2014 (Date of pronouncement) AY: 2009- 10. CITATION: S. 50C(2): Reference to DVO cannot be made if assessee has challenged the valuation by the stamp authorities and even if the said challenge is dismissed on ground that as purchaser paid the duty, assessee had no locus standi to challenge stamp valuation. The mandate of section 50C is clear and the sale consideration shall be deemed to be the value adopted or assessed by the Stamp Valuation Authority. The Only exception provided is that firstly the assessee should claim before AO that such value adopted or assessed by the Stamp Valuation Authority exceed fair market value and secondly the assessee should not have disputed such valuation adopted in any appeal or revision and no reference is made before any other authority, court or High Court challenging the value adopted by the Stamp Valuation Authority. In the light of aforementioned facts it can be said that the value adopted and assessed by the Stamp Valuation Authority under sub-section (1) was disputed by the assessee in the appeal, revision and even before Hon'ble High Court. If it is so, then according to the provisions of section 50C the assessee cannot obtain the....
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....e of sale i.e. 01.06.2009. Furthermore, the assessee has confronted the value, the Assessing Officer has referred the case to the Valuation Officer, Unit II, Valuation Cell, Chennai to ascertain the correct value of the property, who has also determined the value of the property @ Rs..555/-. Accordingly, by adopting the sales consideration @ Rs..555/-, the Assessing Officer determined the long term capital gains. Thus, the difference between the long term capital gains admitted in the return by adopting the sale consideration at Rs..2,80,00,000/- and the LTCG determined by the Assessing Officer by taking the sale consideration at Rs..3,79,90,860/- was brought to tax. On appeal, by passing a detailed speaking order, the ld. CIT(A) confirmed the addition made by the Assessing Officer. 6.1 The provisions of section 50C of the Act are applicable only to transfer of land or building or both provided it is a capital asset. Thus, in cases when such assets are held as stock-in-trade, the section does not apply. By implication, it does not affect sale of land or building by a builder or a developer because land, building, shops, flats, etc sold by the builders and developers are generally ....
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....nded with Revenue authorities of the State Government. Therefore, the value adopted by the DRO cannot be challenged before the Tribunal. 6.3 The case law relied on by the assessee during the course of appellate proceedings has been properly distinguished by the ld. CIT(A) while confirming the addition made by the Assessing Officer by invoking the provisions of section 50C of the Act. Further, in the case of Seksaria Industries Pvt. Ltd. v. ITO in I.T.A. No. 2835/Mum/2013 for the assessment year 2009-10 vide order dated 31.10.2014, the Mumbai Benches of the Tribunal has observed and held as under: "7. In the light of above discussion, we have carefully considered the submissions made by both the parties and we have also carefully perused the order passed by AO as well as Ld. CIT(A) with reference to documents submitted by the assessee in paper book and referred to during the course of hearing. 7.1 The first and foremost contention of the assessee is regarding the adoption of the sale consideration for the purpose of computation of capital gain. To decide this issue, first contention of the assessee is that the sale consideration cannot be taken more than the actual sale conside....
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.... Officer is less than the value adopted by Stamp Valuation Authority then the valuation done by District Valuation Officer shall be taken as full value of the consideration received or accruing as a result of this transfer. In the light of provisions of section 50C it has to be decided that whether Ld. CIT(A) has committed any error in taking the value determined by Stamp Valuation Authority. The mandate of section 50C is clear. At the first place the sale consideration shall be deemed to be the value adopted or assessed by the Stamp Valuation Authority. The only exception provided is that firstly the assessee should claim before AO that such value adopted or assessed by the Stamp Valuation Authority exceed fair market value and secondly the assessee should not have disputed such valuation adopted in any appeal or revision and no reference is made before any other authority, court or High Court challenging the value adopted by the Stamp Valuation Authority. 7.3 According to the facts of the present case assessee being aggrieved by the valuation done by Stamp Valuation Authority had filed an appeal before the Additional Controller of Stamps, Mumbai which was registered as GSO/32- ....
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....Hotel Horizon Pvt. Ltd. paid the stamp duty of Rs. 2,88,72,550/- on 4.8.2010 without protest and an endorsement was made on the said Indenture under Section 32(1)(b) by the Collector of Stamps. Thereupon Hotel Horizon Pvt. Ltd. as Purchaser and the Petitioner as Vendor executed the document on 5.8.2008 and presented the same in the concerned Sub- Registrar's office and the said document was duly registered on the same day. 5. It was Purchasers' obligation to pay the stamp duty under the said Indenture and accordingly, the stamp duty was paid by the Purchasers without protest on 4.8.2008 as indicated above. It is after about 11 months that the adjudication of stamp duty was called in question by filing an Application on 3.7.2009 not by the Purchaser who paid the stamp duty, but by the Petitioners. 6. It appears that the Petitioners had filed a Return of Income with Income Tax Authorities on 22.9.2009. Thereafter the Petitioners filed a revised Return of income on 26-08-2010 and a revised long term capital gain in respect of the transfer of the subject property declaring a revised income of lesser amount. 7. From the aforesaid facts, it is evident that the Petitioners approache....